Jumia to close shops in Tunisia, South Africa
Jumia Technologies, an African e-commerce platform, announced yesterday that it will close its operations in South Africa (under the brand name Zando) and Tunisia as it seeks to turn around its fortunes.
According to the company, closing these markets will allow Jumia to focus resources on its most promising markets, which have stronger growth potential.
Jumia said for the year ended December 31, 2023, and the six months ended June 30, 2024, South Africa and Tunisia combined accounted for only 3.5% and 2.7% of total orders, and 4.5% and 3.0% of gross merchandise value, respectively.
The company went on to say the tactical decision to close operations in these markets will improve overall operational efficiency across the company's business.
Jumia CEO, Francis Dufay, explained the rationale behind the move, saying: "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.
“Both businesses account for a negligible portion of our overall operations. 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. We are also grateful to our suppliers, vendors and logistics partners in these markets. We deeply thank them for their hard work and service to Jumia."
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 expects to cease operations in both South Africa and Tunisia by year end 2024.