Wasoko Shuts Down in Zanzibar, Pauses Operations in Uganda and Zambia

Wasoko, a prominent eCommerce startup company in Kenya, has recently undergone radical regional downsizing in a well-calculated move to put the profitability of the business at the forefront.

The company made public its decision to close its Zanzibar office and temporarily halt operations in Uganda and Zambia.

Concentration on Core Markets

This resolution was reached during the merger process between Wasoko and the South African retail giant MaxAB.

In a press release, it was made clear that these changes are part of a broader restructuring aimed at narrowing down the “most robust markets.”

The eCommerce startup company will continue its operations in Kenya, Rwanda, Mainland Tanzania, and the Democratic Republic of the Congo, where they have established a strong presence and loyal customer base.

East and Southern Africa Could Face an Unpredictable Future

Unlike in Kenya, Rwanda, Mainland Tanzania, and the DRC, the fate of Wasoko in Uganda, and Zambia is yet to be decided.

While the company has used the word “pause” to describe the situation in Uganda and Zambia, it has not given a timeline on when activities will resume.

This ambiguity has made workers, suppliers, and clients from the affected regions worried.

Impact on Employees and Local Economies

The reorganization process has led to the loss of jobs across these regions.

The exact number of affected employees remains undisclosed but the reports suggest that the retrenchment was quite massive.

This downsizing may have implications for the local economies of those areas.

Read More: Wasoko Employees Claim the e-commerce Startup Hid Deal for Six Months

Wasoko Keeping Up with the Trend in Mainland Tanzania

Surprisingly, Wasoko’s services and operations in Mainland Tanzania remains firmly intact.

Rather, as part of its strategic realignment efforts, they are preparing for a significant expansion within the regions of Dar es Salaam, Arusha, and Mwanza, building upon their existing base of over 30,000 retailers within Tanzania.

This decision implies that Wasoko may not have totally dropped its aspirations in East and Southern Africa, but rather it is strategically stepping back for reassessment purposes.

Industry Experts Have Their Say

Opinions from industry experts are divided on the move by Wasoko.

Some analysts see it as a wise choice given the tough economic climate and the challenges of doing business across many markets while others are worried that the company might be withdrawing from high-growth potential regions.

The impact of Wasoko’s long-term decision on the general e-commerce environment in East and Southern Africa will only be clear later.

Wasoko’s Merging Landscape

The context of Wasoko’s merger with MaxAB should be taken into account.

In mergers and acquisitions, companies typically reorganize their operations to eliminate redundancies and improve profitability.

The downsizing in Zanzibar, Uganda, and Zambia might be part of this ongoing process.

The Road Ahead for Wasoko

Wasoko’s decision to retrench signals a major milestone for the Kenyan e-commerce leader.

The future success of the company will largely depend on its ability to effectively manage the merger challenges, focus on profitability, and potentially revive its business in the paused markets.

Only time will tell whether or not this strategic shift will result in Wasoko’s long-term sustainability and regional leadership in African e-commerce.