Kenyan B2B e-commerce firm, MarketForce, recently made significant strategic changes, discontinuing operations in three out of its five African markets while embarking on the early stages of launching a social commerce spinoff. The company's versatile super-app, RejaReja, originally designed to empower informal retailers (small, local stores) to procure fast-moving consumer goods (FMCGs) directly from distributors and manufacturers, has been scaled down and will now exclusively serve Uganda. This move follows the suspension of its services in Kenya, Nigeria, Rwanda, and Tanzania.

MarketForce remains headquartered in Kenya and will utilize the country as a launchpad for its new social commerce venture called Chpter. This endeavour aims to help merchants transform their social media interactions into increased sales. Tesh Mbaabu, the co-founder and CEO of both MarketForce and Chpter, confirmed these developments.

MarketForce's deceleration commenced last year due to some venture capitalists reneging on their Series A funding commitments, prompting the company to streamline operations and implement several rounds of layoffs. The challenging financial landscape mirrored a broader trend in the global venture capital market, making fundraising increasingly difficult.

Tesh Mbaabu

In response to these challenges and financial constraints, MarketForce, like other companies, pivoted away from a growth-at-all-costs strategy and focused on profitability. They explored avenues such as bridge funding rounds and fundraising at lower valuations. Notably, MarketForce recently secured $1 million through crowdfunding.

Mbaabu emphasized the company's renewed focus on building a profitable business by concentrating resources in areas with strong demand density while discontinuing unprofitable routes. MarketForce's asset-heavy model, coupled with capital-intensive operations and mounting liabilities, left them with no alternative but to exit the three markets.

Mbaabu explained,

"After we decided to move towards a path to profitability, Uganda has been our best performing market. We have exclusive distributor contracts with four major manufacturers, and margins are better, enabling us to run a gross profitable operation there; that is why we will keep it active."

Following these changes, Dennis Nyunyuzi, the Uganda country manager, has been promoted to the position of managing director. He will be responsible for overseeing the operations of RejaReja, according to an update shared with investors.

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The RejaReja retail marketplace was introduced in 2020 as a brainchild of MarketForce, serving as a SaaS product for formal markets. Its primary purpose was to allow informal traders, including mom-and-pop stores, to place orders directly with manufacturers and distributors for swift delivery. It also provided access to financing based on transaction history, addressing challenges such retailers face, such as stockouts, income volatility, and limited access to capital for business expansion.

However, despite MarketForce's initial plans to target the informal retail sector, accounting for approximately 80% of household trade in sub-Saharan Africa, low-profit margins in markets like Kenya and Nigeria, along with intense competition, necessitated the strategic shift. Mbaabu stated,

"We are figuring out more profitable and high-margin segments, and that is why we decided to make a move into social commerce."