Jumia Technologies has declared its exit from the South African and Tunisian markets to concentrate on more promising opportunities, following poor contributions from these regions. Their operations in South Africa (Zando) and Tunisia represented only 3.5% and 2.7% of total orders and 4.5% and 3.0% of gross merchandise value, respectively. The company expects to complete the shutdown by the end of 2024, enhancing operational efficiency across its remaining nine markets.
Jumia Technologies, the prominent African e-commerce platform, has announced its intention to terminate operations in South Africa and Tunisia. This strategic decision is directed at reallocating the company’s resources towards markets that demonstrate greater growth prospects. In the fiscal year concluding on December 31, 2023, and in the corresponding six-month period ending on June 30, 2024, these two nations collectively represented a mere 3.5% and 2.7% of total orders, respectively. The South African operation, branded as Zando, along with the Tunisian venture, contributed only 4.5% and 3.0% of gross merchandise value (GMV) for the same periods. The exit from these countries is anticipated to improve Jumia’s operational effectiveness and facilitate growth across the other nine markets where the company remains active. The company projects that the operational shutdown in South Africa and Tunisia will reach completion by the culmination of 2024. Jumia CEO, Francis Dufay, articulated his strategic focus since assuming leadership, stating that initiatives to enhance business strength and drive profitability have been prioritized. He noted, “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. Competitive and macroeconomic conditions in both markets have limited each country’s growth potential and their contributions to our overall business have not aligned with expectations.” Dufay expressed gratitude towards the dedicated team members in both countries, along with the suppliers, vendors, and logistics partners who contributed to Jumia’s endeavors. Furthermore, Jumia has recently completed a divestment of 20 million American depositary shares at an average price of $4.92, further indicating a shift in focus towards strengthening its core operations.
Jumia Technologies has emerged as a significant e-commerce platform across Africa, connecting over 64,000 sellers with consumers through its marketplace. Its logistics network facilitates the timely shipment and delivery of products, while JumiaPay serves as a digital payment solution. The company’s decision to exit South Africa and Tunisia highlights its strategic pivot towards markets with more substantial growth potential. This approach underscores Jumia’s ongoing efforts to refine operations amid competitive pressures and economic challenges that have limited performance in certain regions. By exiting these markets, Jumia aims to bolster its overall efficiency and focus on remaining territories that can drive profitable growth.
In summary, Jumia Technologies is set to conclude its operations in South Africa and Tunisia as part of a strategic shift toward more lucrative markets. This decision, stemming from a careful assessment of market contributions, aims to enhance operational efficiency and profitability. The anticipated shutdown by the end of 2024 reflects Jumia’s commitment to optimizing resource allocation in a competitive environment. The commentary from CEO Francis Dufay further emphasizes the careful consideration given to this move, highlighting the company’s focus on leveraging its strengths in other territories.
Original Source: www.retail-insight-network.com
