Jumia Technologies to Exit South Africa and Tunisia Markets
Jumia Technologies has decided to cease operations in South Africa and Tunisia to focus on more lucrative markets. This exit, anticipated to occur by the end of 2024, follows disappointing performance in these countries, which together constituted a small fraction of Jumia’s total order and GMV. Jumia aims to improve operational efficiency and enhance growth potential across its other nine markets.
Jumia Technologies, a prominent African e-commerce platform, has announced its intention to discontinue operations in South Africa and Tunisia. This strategic shift is focused on reallocating resources towards markets that exhibit greater potential for growth. In the financial year concluding on December 31, 2023, and the subsequent six-month period ending June 30, 2024, South Africa and Tunisia collectively accounted for only 3.5% and 2.7% of Jumia’s total order volume, respectively. As for the contributions from the South African entity, known as Zando, and the operations in Tunisia, they represented a gross merchandise value (GMV) of 4.5% and 3.0% in the stated financial periods, respectively. The decision to retreat from these two markets aims to improve operational efficiency and accelerate growth in the remaining nine markets where Jumia operates. The company projects the completion of its exit strategy by the close of 2024. During this announcement, Jumia’s CEO, Francis Dufay, articulated the rationale behind this decision, emphasizing a focus on strengthening operations and fostering paths to profitability. He stated, “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.” He noted the adverse competitive landscape and macroeconomic conditions that have affected growth prospects and overall business contributions from these countries. Jumia serves as a comprehensive e-commerce platform that connects over 64,000 sellers with customers across Africa, augmented by a logistics network enabling product deliveries, and a payment solution referred to as JumiaPay. In a related financial development, the company recently completed the divestiture of 20 million American depositary shares at an average price of $4.92.
Jumia Technologies operates as a leading e-commerce platform in Africa, providing a marketplace that links sellers to consumers while also offering logistics and payment services. Its operations span multiple African countries, and the company has historically focused on expanding its market presence despite facing competitive and economic difficulties. By evaluating its operational footprint, Jumia aims to enhance profitability and streamline its business. The company’s recent financial performance indicates challenges in specific markets, leading to the decision to exit South Africa and Tunisia, which together had diminished contributions relative to its overall revenues.
In summary, Jumia Technologies is strategically exiting the South African and Tunisian markets to concentrate its efforts on more promising regions, influenced by low contribution rates from these countries. The company believes that this decision will yield improved operational effectiveness and support future growth across its remaining markets. The CEO has expressed gratitude towards employees and partners in these regions for their contributions, despite the challenges faced. Jumia continues to evolve as a significant player in the African e-commerce sector, aiming for sustainable profitability.
Original Source: www.retail-insight-network.com
