Jumia Technologies AG, Africa’s leading e-commerce platform, has announced plans to cease operations in South Africa, where it operated as Zando, and Tunisia by the end of 2024.
The move is part of Jumia’s strategy to concentrate resources on more profitable markets, including Nigeria, as the company continues its efforts to optimize its operations and enhance growth.
In a statement released on Wednesday, Jumia explained that the decision follows an evaluation of the company’s performance in South Africa and Tunisia, which contributed only 3.5% and 2.7% of total orders, and 4.5% and 3.0% of gross merchandise value (GMV) for the year ending in 2023 and the first half of 2024, respectively.
These numbers reflect a minimal impact on Jumia’s overall business, prompting the decision to withdraw from these markets.
Jumia’s CEO, Francis Dufay, acknowledged that while the decision to exit the two markets was difficult, it was a necessary step to strengthen the company’s position in higher-growth regions.
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“We have undertaken a thorough analysis of our operations and made the tough choice to leave South Africa and Tunisia due to limited growth potential and challenging economic conditions,” Dufay said. He expressed gratitude to the employees, vendors, and logistics partners in both countries for their efforts.
Analysts view the move as a calculated effort by Jumia to streamline its operations and focus on core markets with stronger potential for profitability. “Jumia’s exit from South Africa and Tunisia aligns with its ongoing focus on market optimization.
These markets did not significantly contribute to the company’s growth, and reallocating resources could accelerate progress toward profitability,” said tech analyst Joseph Onuoha. “By concentrating on countries like Nigeria, Kenya, and Egypt—where e-commerce adoption is higher—Jumia can sharpen its focus on markets that offer better return on investment.”
Jumia has been on a path to reduce its long-standing financial losses. In 2023, the company posted a 64% decline in operating losses, down to $73 million, signaling progress toward its profitability goals.
Since assuming the role of CEO, Dufay has implemented several measures aimed at reducing costs, including a 20% reduction in workforce in late 2022 and the discontinuation of unprofitable services like Jumia Food.
Analyst Clara Adegboye added, “This latest development shows Jumia’s commitment to repositioning itself for long-term success. The decision to exit unprofitable markets is in line with its broader strategy of refocusing on regions with high potential for sustainable growth.”
Jumia’s shift in focus will see the company concentrate its efforts on nine key markets in Africa: Nigeria, Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, and Uganda. These countries are expected to drive Jumia’s future growth as the company seeks to maximize profitability in a competitive e-commerce landscape.