Africa’s online retailer Jumia claimed that its exit from Tunisia and South Africa in late 2024 was motivated by political and economic developments in these countries and their direct impact on consumer spending.
In October 2024, Jumia ceased operations in South Africa and Tunisia to focus resources on its most promising markets with stronger growth potential. The decision, which proved difficult, shrank the retailer’s total number of operating countries from 11 to nine, with a majority of its focus now concentrated in West and East Africa. All affected employees were rendered redundant and offered a generous severance package of $10 million.
“We look at the macroeconomic environment based on several factors, which include inflation indicators, consumer confidence index, business confidence index, GDP growth, currency exchange rates, and access to capital and foreign exchange,” notes from Jumia’s filings to the US Securities Exchange Commission (SEC) read.
The decision to exit Tunisia and South Africa impacted two entities – Jade E-Services South Africa Proprietary Ltd. and Senegalese Jumia E-services SARL, the financials read. Despite the closures, Jumia has opted not to classify these operations as discontinued, deeming them non-material to the group’s overall financial performance.
With leaner operations, Jumia will attempt to chase profitability after successfully lowering its losses from $213 million in 2022 to $99.1 million in 2024. The e-retailer will leverage the nine countries left, representing more than 625 million people, 54% of Africa’s internet users, and 49% of Africa’s GDP, the financials said.
