Jumia Technologies AG, Africa’s leading e-commerce platform, has announced its decision to shut down operations in South Africa (where it operated under the brand name Zando) and Tunisia by the end of 2024.
The move is part of the company’s strategy to optimize resources and concentrate efforts on markets with higher growth potential, including Nigeria and other key African countries.
In a statement released on Wednesday, Jumia disclosed that the decision follows an evaluation of its performance in the two markets, which contribute only a small fraction to its overall business. For the year ending December 31, 2023, and the first half of 2024, South Africa and Tunisia accounted for 3.5% and 2.7% of total orders, and 4.5% and 3.0% of gross merchandise value (GMV), respectively.
Jumia emphasized that reallocating resources to higher-performing markets will enhance its operational efficiency and accelerate growth across the continent.
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Commenting on the decision, Jumia CEO Francis Dufay described the exits from South Africa and Tunisia as difficult but necessary.
“Since taking on the role of CEO, my focus has been on initiatives that strengthen our business and guide us toward profitability. After a thorough analysis, we made the tough decision to exit these markets, as their contribution to our overall business has not met expectations. Competitive and macroeconomic conditions in these countries have limited their growth potential,” Dufay explained.
He expressed gratitude to the team members, suppliers, vendors, and logistics partners in both countries for their dedication and hard work, acknowledging their efforts in serving customers.
Jumia believes that by focusing on its remaining nine markets—Nigeria, Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, and Uganda—the company will be better positioned for growth.
The company has been implementing several cost-saving measures to reduce losses and drive profitability. In 2023, Jumia reported a 64% decline in operating loss, reducing it to $73 million. CEO Dufay expressed optimism that Jumia’s focus on top-line growth and improved cash utilization would yield positive results in 2024.
Previously, in Q4 2022, Jumia had reduced its workforce by 20%, leading to the exit of 900 employees, as part of its broader strategy to minimize losses and move toward profitability.
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Publish date : 2024-10-15 16:23:40
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