Jumia, an e-commerce giant in Africa, has disclosed plans to cease operations in South Africa, where it runs under the Zando brand, and Tunisia by the end of 2024.
The company will now concentrate its resources on markets with richer growth prospects including Nigeria, Egypt, Kenya and Morocco among others.
This comes after an internal review of the company’s performance in these regions. Jumia reported that South Africa and Tunisia together contributed only 3.5% of total orders and 4.5% of Gross Merchandise Value (GMV) for the year ending December 2023.
The situation remained similar in the first half of 2024, with the two countries accounting for just 2.7% of orders and 3% of GMV. These figures reveal their minimal impact on Jumia’s overall business and underline the rationale for the exits.
Jumia’s Chief Executive Officer, Francis Dufay, stated that the company intends to focus on markets that offer greater opportunities for growth and profitability. “Both South Africa and Tunisia have faced challenging competitive and economic environments that have constrained our ability to scale in these regions,” Dufay explained.
The decision to pull out of these countries, according to him, will enable Jumia to reallocate resources to markets with better potential for sustainable growth.
While the closures will affect approximately 110 jobs, some employees may be reassigned within the company.
The company’s decision aligns with its goals to make operations more efficient and effective.
In recent years, Jumia has implemented several cost-cutting measures, including workforce reductions and the discontinuation of unprofitable ventures like Jumia Food.
The e-commerce platform’s leadership believes that by concentrating on its remaining nine markets, it can enhance its overall efficiency and accelerate growth.
Jumia’s exit also shows the high competition in South Africa, where fast-fashion retailers like Shein and Temu have gained ground. Again, recent trends suggest that online fashion retail, particularly in South Africa, has become more difficult to sustain due to intense competition.
The company’s leadership believes this development will place Jumia on a stronger path toward profitability. With the shutdown expected to be finalised by year-end, Jumia plans to kickstart its refocus on regions with higher growth potential by then.
The company continues to observe promising trends in its core markets and aims to capitalise on improved economies of scale and operational efficiencies.
