Jumia exits South Africa and Tunisia as part of a strategic decision to optimize resources and focus on markets with greater growth potential. Africa’s leading e-commerce platform plans to shut down its operations in these countries by the end of 2024.
In a statement released on Wednesday, Jumia emphasized that this decision follows a thorough evaluation of its performance in South Africa and Tunisia. These two markets represented only a small fraction of the company’s overall business, contributing just 3.5% and 2.7% of total orders, along with 4.5% and 3.0% of gross merchandise value (GMV) in 2023 and the first half of 2024.
Difficult Decision for Jumia
Jumia CEO Francis Dufay described the Jumia exits South Africa and Tunisia as a tough decision.He stated, “Since assuming the role of CEO, I have focused on initiatives to strengthen our business and guide us toward profitability. After a thorough analysis, we decided to exit these markets as they contribute negligibly to our overall operations.”
Jumia believes that reallocating resources to higher-performing markets will enhance operational efficiency and drive growth. The CEO highlighted that competitive and macroeconomic conditions in both countries limited their growth potential, making this decision even more challenging.
Dufay expressed gratitude to team members in both nations for their dedication, as well as to suppliers and logistics partners for their support.
Focus on High-Growth Markets
With plans to exit South Africa and Tunisia, Jumia will redirect its efforts toward its remaining markets: Nigeria, Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, and Uganda. This strategy aims to position Jumia for improved growth and cash utilization.
The company has been working to cut losses and is confident about returning to growth in 2024. After a 64% decline in operating losses for 2023, totaling $73 million, Dufay believes recent results show a clear path toward strategic focus and improved performance.
To reduce its perpetual losses, Jumia previously cut its workforce by 20% in Q4 2022, resulting in the exit of 900 employees. The company also discontinued its unprofitable food business, Jumia Food, to further streamline operations.
