Jumia exits South Africa and Tunisia to focus on Nigeria

Jumia Technologies AG, Africa’s leading e-commerce platform, has revealed its intention to cease operations in South Africa, where it operates under the Zando brand, as well as in Tunisia by the end of 2024.

This strategic decision is aimed at optimizing resources and concentrating on markets with greater growth prospects across the continent, such as Nigeria and other key regions.

In a statement issued on Wednesday, the company explained that the decision followed a review of its activities in the two countries, which represent a minor portion of its overall business.

For the year ending December 31, 2023, and the first half of 2024, Jumia reported that South Africa and Tunisia accounted for just 3.5% and 2.7% of total orders, and 4.5% and 3.0% of gross merchandise value (GMV), respectively.

A Tough Decision

Jumia has decided to shift its focus to higher-performing markets to boost operational efficiency and drive growth. CEO Francis Dufay described the decision to exit the South African and Tunisian markets as difficult.

“Since I became CEO, my focus has been on initiatives to strengthen the business and guide it toward profitability,” said Dufay. “After careful analysis, we concluded that closing our operations in South Africa and Tunisia was necessary, as these markets represent only a small portion of our overall operations.”

He also noted that challenging competitive and economic conditions in both countries had constrained growth and fallen short of expectations. Dufay expressed gratitude to the teams, suppliers, vendors, and logistics partners in South Africa and Tunisia for their efforts and dedication.

Strategic Refocus

Jumia believes that reallocating resources to its remaining nine markets will better position the company for growth. Following the planned exits, Jumia will focus on Nigeria, Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, and Uganda.

After reducing its operating loss by 64% in 2023, bringing it down to $73 million, Dufay expressed optimism that the company would return to growth this year while continuing to cut losses. He pointed to recent quarterly results as evidence of progress towards the company’s strategic goals, including top-line growth and better cash utilization for 2024.

Previous Cost-Cutting Measures

In Q4 2022, Jumia undertook a workforce reduction of 20%, leading to the departure of 900 employees, as part of its strategy to reduce losses and achieve profitability. The company also discontinued Jumia Food, citing its unprofitability.

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