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Jumia to Exit South Africa and Tunisia to Focus on High-growth Markets

October 16, 2024

Jumia to exit South Africa and Tunisia to focus on high-growth markets, its decision to cease operations in these countries as part of a strategic shift to optimize resources.

The closures, set for the end of 2024, will allow Jumia to concentrate on markets with stronger growth potential.

The decision follows a thorough evaluation of the company’s operations by CEO Francis Dufay.

Jumia’s South African arm, operated under the brand Zando, and its Tunisian operations, contributed only 3.5% and 2.7% of total orders and 4.5% and 3% of the gross merchandise value (GMV) respectively, in 2023, numbers that fell further in the first half of 2024.

This negligible contribution led to the decision to exit these markets. The strategic decision to shut down operations in both markets is expected to improve overall operational efficiency across the company.

“Since taking over as CEO, my priority has been to strengthen our business and drive profitability. The macroeconomic conditions in South Africa and Tunisia, coupled with stiff competition, have limited growth in both markets,” Dufay explained.

While noting how difficult it was to reach this decision, Dufay stated that the eCommerce business needed to focus on markets where it could achieve sustainable growth. He expressed gratitude to the teams, partners, and customers in the two countries.

Jumia to focus on Nigeria, Kenya, Egypt, and Morocco

Jumia’s exit from South Africa and Tunisia marks a strategic pivot towards its core markets, which include Nigeria, Kenya, Egypt, and Morocco.

These countries, known for their robust eCommerce potential, are expected to benefit from the reallocation of resources.

The move to exit less promising markets aligns with Jumia’s broader efforts to streamline operations and return to profitability.

The company has been navigating challenging market conditions over the past few years, including macroeconomic pressures and stiff competition from local and global players.

Jumia reported revenues of $36.5 million in Q2 2024, 25% less than it recorded in the previous quarter and 17% less than it did during the same period last year. Gross merchandise value also fell in Q2.

In recent months, Jumia has been taking significant steps to shore up its finances. Notably, the company shut down Jumia Foods in 2023 to reduce losses.

The eCommerce giant remains committed to driving growth in its remaining markets, leveraging its marketplace, logistics network, and JumiaPay platform.

Jumia recently raised nearly $100 million through secondary share sales and expanded its supplier base and logistics network.

As Jumia refocuses its efforts, the company is optimistic about its ability to accelerate growth and strengthen its position in Africa’s most promising markets, with the hope of returning to profitability soon.

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