African e-commerce platform Jumia Technologies has revealed its plan to cease operations in South Africa and Tunisia.
This strategic move is aimed at concentrating the company’s resources on more promising markets with higher growth potential.
In the financial year ending 31 December 2023, and the six-month period ending 30 June 2024, these two countries together contributed merely 3.5% and 2.7% of total orders, respectively.
The South African business, operating under the brand name Zando, and the Tunisia business contributed gross merchandise value (GMV) of 4.5% in the year ending 31 December 2023 and 3.0% GMV in the six-month period ending 30 June 2024.
The decision to exit South Africa and Tunisia is expected to enhance Jumia’s operational efficiency and growth across its remaining nine markets.
The company anticipates completing the operational shutdown in these two markets by the end of 2024.
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By GlobalData
Jumia CEO Francis Dufay said: “Since assuming the role of CEO, I have focused on initiatives aimed at strengthening our business and placing us on a path to profitability. 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.
“Furthermore, competitive and macroeconomic conditions in both markets have limited each country’s growth potential and their contribution to our overall business has not aligned with expectations.
“Decisions like these are never easy and we are extremely grateful to team members in both countries, who worked tirelessly to serve our customers every day. We are also grateful to our suppliers, vendors and logistics partners in these markets. We deeply thank them for their hard work and service to Jumia.”
Jumia is a pan-African e-commerce platform, which consists of a marketplace that links more than 64,000 sellers with customers. It has a logistics network that allows the shipment and delivery of packages, and a payment service called JumiaPay.
Last month, Jumia completed the divestment of 20 million American depositary shares for an average price of $4.92, TechCrunch reported.
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