Jumia Technologies AG, an African eCommerce platform, has announced its decision to shut down operations in South Africa and Tunisia by the end of 2024 as part of a strategic effort to optimize its resources. The move comes after a comprehensive review of the company’s performance by CEO Francis Dufay, who aims to focus on markets with stronger growth potential.
Jumia’s South African business, which operates under the Zando brand, and its Tunisian division, contributed only 3.5% and 2.7% of total orders, along with 4.5% and 3% of gross merchandise value (GMV) in 2023, respectively. These figures declined further in the first half of 2024. The limited contribution from these markets prompted the decision to withdraw, with the expectation that closing these operations will enhance overall efficiency across the company.
“Since assuming the role of CEO, my primary goal has been to strengthen our business and drive profitability. Unfortunately, the macroeconomic environment in South Africa and Tunisia, combined with tough competition, has stunted growth in both markets,” Dufay explained.
While acknowledging the difficulty of the decision, Dufay emphasized the need to focus on markets where Jumia could achieve sustainable growth. He also expressed appreciation for the support of the teams, partners, and customers in South Africa and Tunisia.
Jumia’s exit from these two markets represents a strategic shift toward focusing on its core markets, including Nigeria, Kenya, Egypt, and Morocco—countries that are expected to show stronger eCommerce growth. These regions are poised to benefit from the company’s reallocation of resources.
This move aligns with Jumia’s broader goal to streamline operations and return to profitability, following a period of economic challenges and increasing competition from both local and global players. Jumia reported $36.5 million in revenue for Q2 2024, a decline of 25% compared to the previous quarter and 17% lower than the same period last year. Gross merchandise value also decreased in Q2.
In recent months, Jumia has made several efforts to stabilize its finances, including shutting down its Jumia Foods service in 2023 to reduce losses. The company remains committed to driving growth in its remaining markets by leveraging its marketplace, logistics network, and JumiaPay platform.
Jumia has also raised nearly $100 million through secondary share sales and expanded its supplier base and logistics network. As the company refocuses its efforts, it is optimistic about accelerating growth and solidifying its position in Africa’s most promising eCommerce markets, aiming to return to profitability.
Source: Techpoint Africa
