Jumia, a leader in e-commerce across Africa, has announced that it will exit two major markets, South Africa and Tunisia, by the close of 2024.
This decision comes as part of a broader shift in the company’s strategic focus toward high-growth markets in other African regions. By leaving these two countries, Jumia aims to streamline its operations and concentrate resources on countries where e-commerce is seeing the most promising expansion, such as Nigeria, Egypt, Kenya, and Morocco.
This move signals a significant shift in the company’s growth strategy, particularly in a highly competitive African e-commerce landscape.
Factors Behind the Exit from South Africa and Tunisia
Jumia’s decision to exit South Africa and Tunisia is based on its performance in these markets. For the first half of 2024, both countries accounted for only 2.7% of Jumia’s total orders and about 3% of its Gross Merchandise Value (GMV).
Despite having operated in Tunisia for over a decade and acquiring the South African fashion platform Zando in 2018, the company has struggled to achieve substantial growth in these regions. Both markets have experienced fierce competition and slower expansion in e-commerce compared to other African countries.
In South Africa, Zando’s acquisition seemed promising at first. However, the market did not align with Jumia’s long-term vision of growth. Similarly, in Tunisia, the e-commerce space has been challenging, with a competitive environment and sluggish market growth, prompting the company to pivot its focus elsewhere.
These factors ultimately led to the decision to pull out of both markets, allowing Jumia to focus on regions where growth potential is much stronger.
New Focus on High-Growth Markets
As Jumia exits South Africa and Tunisia, its attention is turning to markets that have shown significant potential. These include Nigeria, Egypt, Kenya, and Morocco, which are expected to be the company’s primary growth engines.
In these countries, a growing middle class, rising internet penetration, and the adoption of online shopping are fueling the expansion of e-commerce. Nigeria, Jumia’s largest market, stands out as the central focus of this strategy. With a robust consumer base and increasing demand for online services, Nigeria offers Jumia ample opportunities for profitability and growth.
By concentrating on these high-growth markets, Jumia aims to optimize its operations and improve efficiency. This strategic shift is intended to streamline resources, reduce operational costs, and enhance the company’s ability to scale its services in regions where e-commerce is gaining traction.
Jumia has been leveraging local partnerships, digital payment solutions, and logistics infrastructure to strengthen its presence in these key markets. This pivot is expected to better position Jumia in a competitive landscape while driving long-term growth.
The Changing E-Commerce Landscape in Africa
Africa’s e-commerce sector presents unique challenges and opportunities across different regions. Internet penetration rates, consumer spending power, and logistical infrastructures vary from country to country, creating both barriers and growth potential.
Countries like Nigeria, Kenya, and Egypt have witnessed a surge in e-commerce, thanks to rising internet usage and an emerging middle class that increasingly shops online. On the other hand, South Africa and Tunisia have not experienced the same level of growth, which made it difficult for Jumia to maintain its operations in these regions.
The decision to exit South Africa and Tunisia is a strategic step that aligns with Jumia’s broader goal of focusing on markets that promise higher returns. With competition in the African e-commerce space intensifying, Jumia is working to sharpen its competitive edge by zeroing in on core regions where it sees the most potential for sustained growth. This refocused strategy could help the company achieve profitability more rapidly and maintain its status as a leading e-commerce player on the continent.
As Jumia narrows its focus, the company remains committed to improving the digital shopping experience across Africa. By strengthening its presence in key markets, Jumia aims to better serve its customers, streamline its operations, and pave the way for sustainable growth in the years ahead.
