Jumia Exits South Africa and Tunisia for High-Growth Markets. Could This be a new chapter for growth?

Jumia, Africa’s eCommerce giant, is making a major shift in its operations by exiting South Africa and Tunisia by the end of 2024. This decision, though significant, is a calculated move to optimize resources and drive growth in more promising markets. With its sights set on Nigeria, Kenya, Egypt, and Morocco, Jumia is positioning itself to strengthen its presence where it sees the greatest potential for success.

But why is Jumia pulling out of South Africa and Tunisia, and what does this mean for the broader eCommerce landscape in Africa?

Why the Exit?

Jumia’s decision comes after a thorough evaluation of its operations under CEO Francis Dufay’s leadership. The numbers tell the story: in 2023, Jumia’s South African and Tunisian arms accounted for just 3.5% and 2.7% of total orders, contributing only 4.5% and 3% of gross merchandise value (GMV), respectively. In the first half of 2024, these figures fell even further.

With these markets contributing so little to the company’s overall performance, and facing tough competition in both regions, Jumia made the difficult but necessary choice to exit. Dufay noted the economic challenges and competitive pressures that hindered growth in these countries, making it clear that Jumia needed to refocus its efforts on more promising areas.

Shifting Focus to Core Markets

By exiting less profitable markets, Jumia aims to reallocate resources to its core markets—Nigeria, Kenya, Egypt, and Morocco. These countries are key players in Africa’s eCommerce growth story, with expanding digital infrastructure and increasing consumer demand. Jumia’s plan is to leverage its marketplace, logistics network, and JumiaPay platform to boost its performance in these regions.

This strategic shift is part of a broader effort by Jumia to streamline operations and return to profitability. Over the past few years, the company has faced challenging market conditions, including declining revenues and increased competition. In Q2 2024, Jumia’s revenue fell by 25% compared to the previous quarter, further emphasizing the need for change.

What This Means for Africa’s eCommerce Future

Jumia’s exit from South Africa and Tunisia raises important questions about the future of eCommerce in Africa. While these markets may not have delivered the growth Jumia hoped for, they are still significant players in the continent’s digital economy. The decision to pull out underscores the challenges of operating in regions with tough competition, economic instability, and lower-than-expected consumer engagement.

However, Jumia’s focus on high-growth markets shows that Africa’s eCommerce potential is far from exhausted. By doubling down on markets like Nigeria and Kenya, where digital adoption is on the rise, Jumia is betting on long-term growth. This move could lead to stronger performance in the years ahead, especially as the company continues to invest in technology and infrastructure.

Jumia’s strategic exit from South Africa and Tunisia marks a pivotal moment in its journey. While the decision highlights the difficulties of scaling across diverse African markets, it also reflects Jumia’s commitment to focusing on areas with the most promise. As the company pivots toward its core markets, it remains hopeful that this reallocation of resources will accelerate growth and solidify its position as a leader in African eCommerce.