In an announcement marking a major strategic shift, Jumia Technologies, often dubbed the “African Amazon,” has revealed its intention to withdraw from two important markets: South Africa and Tunisia. This decision is part of a broader restructuring aimed at achieving profitability, a goal that has long eluded the company despite its rapid growth.
A Strategic Decision in a Challenging Economic Context
According to Reuters, Jumia’s CEO, Francis Dufay, explained the reasons for this withdrawal: “The trajectory of the countries was not aligned with the group’s strategy.” He specifically cited “the complexity of the macroeconomy, the competitive environment, and the low potential for growth and profitability in the medium term” as determining factors in this decision.
This announcement means the closure of Zando, Jumia’s South African online fashion retailer, as well as its Tunisian operations by the end of the year. Zando, founded in 2012, had established itself as a leading online fashion platform in South Africa. In Tunisia, Jumia had been operating under its own brand for a decade, offering a wide range of merchandise.
Despite the symbolic importance of these markets, their weight in Jumia’s overall operations remains limited. Mr. Dufay specified to Reuters that “these two activities represented only 2.7% of total orders and 3% of gross merchandise value during the six months ending June 30.”
The CEO remains optimistic about the company’s ability to offset these losses: “Success in any of these markets would easily allow us to recover the volumes lost in South Africa and Tunisia,” he said, referring to Jumia’s remaining markets, which include Egypt, Kenya, Morocco, and Nigeria.
A Broader Restructuring
This withdrawal is part of a broader cost-cutting strategy. Reuters reports that Jumia “is aggressively cutting costs in an attempt to become profitable, including reducing headcount, abandoning everyday grocery products and food delivery, and eliminating delivery services unrelated to its e-commerce business.”
The closures in South Africa and Tunisia will result in the elimination of about 110 jobs, although some employees could be transferred to other sectors of the group.
Jumia’s decision comes in the context of a rapidly changing e-commerce market in Africa. In South Africa, for example, Takealot, the country’s largest online retail group, recently announced the sale of its online fashion business Superbalist, facing increasing competition from Chinese fast fashion retailers like Shein and Temu.
Jumia’s withdrawal from South Africa and Tunisia marks an important turning point in the company’s strategy. As the African e-commerce giant focuses on its most promising markets, it remains to be seen whether this decision will finally allow Jumia to achieve its coveted profitability. In an ever-evolving e-commerce landscape, Jumia’s ability to adapt and thrive in its remaining markets will be crucial for its future.
