Jumia Technologies AG, Africa’s leading e-commerce platform, has announced plans to shut down its operations in South Africa, where it operated under the brand name Zando, and in Tunisia by the end of 2024. This strategic decision aims to optimize resources and focus on markets with stronger growth potential across the continent, such as Nigeria and others. In a statement released on Wednesday, the company explained that the decision followed an evaluation of its operations in these two countries, which accounted for only a small share of Jumia’s overall business.
For the year ending December 31, 2023, and in the first half of 2024, South Africa contributed just 3.5% of total orders and Tunisia 2.7%. In terms of gross merchandise value (GMV), South Africa accounted for 4.5%, while Tunisia was at 3.0%. Jumia believes that reallocating resources to higher-performing markets will significantly enhance its operational efficiency and accelerate growth.
Commenting on the decision, Jumia CEO Francis Dufay described the exits from the two markets as a difficult choice. “Since assuming the role of CEO, I have focused on initiatives aimed at strengthening our business and putting us on a path to profitability. After a thorough analysis, we made the difficult decision to close our operations in South Africa and Tunisia, as both businesses represent a negligible portion of our overall operations.
Furthermore, competitive and macroeconomic conditions in both markets have limited their growth potential, and their contributions to our overall business have not met expectations. Decisions like these are never easy, and we are extremely grateful to the team members in both countries who worked tirelessly to serve our customers every day. We also thank our suppliers, vendors, and logistics partners in these markets for their hard work and dedication to Jumia,” he said.
With the impending exit from South Africa and Tunisia, Jumia will focus on its remaining markets, which include Nigeria, Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, and Uganda. After reporting a 64% decline in operating loss for 2023, reducing it to $73 million, CEO Dufay, who has implemented several strategies to cut losses and move toward profitability, expressed confidence that the business would return to growth this year while further reducing losses. According to him, recent quarterly results have shown clear steps toward Jumia’s strategic focus, positioning it for topline growth and improved cash utilization for 2024.
Earlier, as part of its strategy to cut chronic losses and achieve profitability, Jumia had reduced its workforce by 20% in Q4 2022, resulting in the exit of 900 employees. The company also discontinued its food business, Jumia Food, which was deemed unprofitable.