Jumia Technologies AG, Africa’s leading e-commerce platform, has decided to cease operations in South Africa and Tunisia by the end of 2024. The company, which operates under the brand name Zando in South Africa, aims to optimize resources and focus on markets with stronger growth potential, particularly Nigeria and several other countries.
In a statement released on Wednesday, Jumia explained that the move follows an evaluation of its operations in both countries, contributing only a small fraction to the company’s overall business. For the year ending December 31, 2023, and the first half of 2024, South Africa accounted for just 3.5% of total orders, while Tunisia contributed 2.7%. Regarding gross merchandise value (GMV), South Africa and Tunisia represented 4.5% and 3.0%, respectively.
Strategic Realignment
Jumia believes reallocating resources to higher-performing markets will enhance operational efficiency and foster growth. CEO Francis Dufay characterized the exits from South Africa and Tunisia as challenging, emphasizing that the businesses in these countries make up a negligible portion of Jumia’s overall operations.
Dufay stated, “Since assuming the role of CEO, I have focused on initiatives aimed at strengthening our business and placing us on a path to profitability. After a thorough analysis, we closed our operations in South Africa and Tunisia. Competitive and macroeconomic conditions in both markets have limited growth potential, and their contributions have not aligned with expectations.”
He thanked the employees, suppliers, vendors, and logistics partners of both countries for their dedication and hard work.
Future Focus
With the exit from South Africa and Tunisia, Jumia will concentrate on its remaining markets, which include Nigeria, Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, and Uganda. After posting a 64% decline in operating loss for 2023, reducing it to $73 million, Dufay has implemented several strategies to cut losses and move towards profitability. He remains confident that the company will return to growth in 2024 while further reducing its losses.
In recent quarters, Jumia’s results have indicated progress towards its strategic focus, positioning the company for top-line growth and improved cash utilization. As part of its efforts to curb losses, Jumia previously reduced its workforce by 20% in Q4 2022, exiting 900 employees, and discontinued its unprofitable food delivery service, Jumia Food.
