Jumia Technologies, an African e-commerce platform, is closing its operations in South Africa and Tunisia.
This decision will fuel the company’s strategy to focus on high-growth markets with strong potential for profitability that has long proved elusive.
“After a thorough analysis, we decided to close down our operations in South Africa and Tunisia. Both businesses account for a negligible portion of our overall operations,” Francis Dufay, Jumia’s CEO, said in a press release.
“Furthermore, competitive and macroeconomic conditions in both markets have limited each country’s growth potential, and their contribution to our overall business has not aligned with expectations. Decisions like these are never easy and we are extremely grateful to team members in both countries, who worked tirelessly to serve our customers every day.”
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Jumia’s business in South Africa and Tunisia accounted for only 3.5% and 2.7% of total orders and 4.5% and 3.0% of GMV, respectively, for the year ended December 31, 2023, and the six months ended June 30, 2024. The strategic decision to close operations in these markets is expected to improve overall operational efficiency across other markets.
The e-commerce platform’s decision to exit these markets will reduce its total number of operating countries from 11 to 9. The majority of its focus is now concentrated in West and East Africa. The Company expects to cease South Africa and Tunisia operations by year-end 2024.
Jumia’s recent challenges have been attributed to currency depreciation in crucial markets like Nigeria and Egypt. In Q2 2024, the company’s total order value declined to $170 million despite an increase in orders.
As Jumia prepares for its upcoming earnings report, the company hopes to restore investor confidence through positive financial results and a rebound in its stock price. Jumia has recently raised nearly $100 million through secondary share sales to support its growth strategy and expand its supplier base and logistics network.
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Meet Jumia
Jumia is a leading pan-African e-commerce platform with operations across 11 African countries. Its mission is to improve the quality of everyday life in Africa by leveraging technology to deliver innovative, convenient, and affordable online services while helping businesses grow as they use Jumia’s platform to reach and serve customers better.
The Jumia platform consists of a marketplace that connects more than 64,000 sellers with customers, a vast logistics network that enables package shipment and delivery, and a proprietary payment service, JumiaPay, that facilitates transactions among participants active on the Jumia platform in select markets.
