E-commerce giant Jumia has announced plans to exit its operations in South Africa and Tunisia by the end of 2024 as part of its strategy to concentrate resources on its most promising markets.
The decision follows a comprehensive evaluation of the company’s performance in both countries, which accounted for only a small portion of its total orders and gross merchandise volume (GMV).
According to Jumia, South Africa contributed 3.5% of total orders and 4.5% of GMV for the year ending December 31, 2023, while Tunisia accounted for 2.7% of total orders and 3.0% of GMV.
The company believes that ceasing operations in these markets will improve its overall efficiency and allow it to focus on markets with higher growth potential.
Jumia’s CEO, Francis Dufay, explained the rationale behind the move:
“Since assuming the role of CEO, I have focused on initiatives aimed at strengthening our business and placing us on a path to profitability. After a thorough analysis, we made the difficult decision to close down our operations in South Africa and Tunisia.”
Dufay noted that competitive and macroeconomic challenges in both countries limited their growth potential and failed to meet Jumia’s expectations for contributing to the company’s broader business objectives.
The decision will reduce Jumia’s presence from 11 countries to 9, with the company now focusing its efforts on its key markets in West and East Africa.
Jumia believes this strategic shift will help accelerate growth and improve operational efficiency across its remaining markets.
“Jumia believes that exiting these markets and refocusing resources on its other nine markets will leave the company better positioned to accelerate overall growth and further improve efficiency,” the company said in a statement.
Jumia has faced difficulties in recent quarters, particularly with currency depreciation in key markets like Nigeria and Egypt.
Despite an increase in the number of orders, the company reported a decline in the total value of orders to $170 million in Q2 2024.
Jumia’s exit from South Africa and Tunisia is expected to be completed by the end of 2024.
