African eCommerce Leader Jumia to Exit "Non-Strategic Markets"

African eCommerce Leader Jumia to Exit "Non-Strategic Markets": Key Insights

• Focus on Key Markets: Jumia will close its South African fashion site, Zando, and end Tunisian operations to prioritize high-growth markets like Nigeria, Egypt, Morocco, and Kenya.

• Profitability: CEO Francis Dufay emphasized that this restructuring will help Jumia cut costs and focus resources on profitable regions.

• Strengthening eCommerce Presence: Despite challenges, Jumia is dedicated to expanding in Africa's top eCommerce countries, led by Egypt, South Africa, and Algeria.

Francis Dufay, CEO of Africa-focused eCommerce retailer Jumia Technologies, told Reuters that the company will shut down its South African online fashion platform Zando and cease operations in Tunisia by year-end to concentrate on other key markets. This decision is a part of its ongoing restructuring strategy to focus on core regions with higher growth potential like Nigeria, Marocco, Egypt and Kenya. This decision aligns with Jumia’s recent actions to optimize its business in key markets, particularly where it holds stronger market positions.

Jumia Undergoing Restructuring

Jumia is making aggressive cost-cutting moves to reach profitability, including reducing its workforce and limiting delivery options unrelated to its core eCommerce business.

In an interview with Reuters, CEO Francis Dufay said, "The trajectory of the countries did not align with the strategy of the group." He added, "We believe it's the right decision. It enables us to refocus our resources on the other nine markets, where we see more promising trends in terms of scale and profitability."

Top eCommerce Countries on the
African Continent

Among the leading eCommerce markets by country, a number of different countries are in a tight race. These include major economies on the African continent such as South Africa, Egypt and Algeria – but which are the largest eCommerce markets in Africa?

• Egypt leads Africa’s eCommerce market with $3.5 billion in revenue in 2023.

• South Africa follows closely, with only a $150 million difference.

• Algeria and Nigeria rank third and fourth, generating $2 billion and $1.9 billion, respectively, with a narrow gap between them.

• Ghana rounds out the top five with $680 million in eCommerce revenue.

• Further down, Morocco, Kenya, and Ivory Coast reported sales of $603 million, $564 million, and $505 million, respectively, in 2023.

Jumia Business Overview

Jumia Technologies saw its market cap peak at US$1.25 billion in July 2024, but it had fallen to around $620 million by mid-October. This drop highlights challenges like economic instability, currency fluctuations, and tough competition across African markets, all of which have impacted Jumia’s growth and profitability.

To address these pressures, Jumia has been restructuring by cutting costs, reducing its workforce, and exiting less profitable areas such as groceries and food delivery. This strategy aims to streamline operations and focus on its core e-commerce business in stronger markets, though it underscores the financial strain that has affected Jumia's market valuation recently.