Jumia’s Retreat: The E-Commerce Giant Stumbles in Key African Markets

Written By Phillip Mutebi

It wasn’t too long ago that Jumia was hailed as the Amazon of Africa—a beacon of hope for e-commerce on the continent. But as headlines now tell us, Jumia is pulling out of South Africa, Tunisia and Uganda, leaving many to wonder: What went wrong?

Behind the shiny branding and rapid expansion lies a story of challenges that the company—and perhaps the e-commerce industry in Africa—just couldn’t shake. Let’s dive into what happened and what Jumia’s retreat tells us about doing business in Africa.

Growing Too Fast, Too Soon

Jumia burst onto the scene in 2012 with bold ambitions: to bring e-commerce to the entire African continent. And for a while, it seemed unstoppable. Investors lined up, operations spread across 14 countries, and the company even went public on the New York Stock Exchange in 2019.

But here’s the thing about growth: if it’s not sustainable, it’s just a house of cards. Jumia’s model relied on heavy spending to expand into new markets, but these markets didn’t always deliver the returns they needed. Take South Africa, for example. Competing against a local giant like Takealot was always going to be tough. When you’re up against a company that knows the local market like the back of its hand, you can’t afford to make mistakes—and Jumia made plenty.

One-Size-Fits-All Doesn’t Work in Africa

Africa isn’t one big market—it’s a network of diverse economies, cultures, and consumer behaviors. But as many often do, Jumia approached it like a single entity, applying eerily similar strategies across the board.

  • In South Africa, where customers have more disposable income and local alternatives, Jumia’s value proposition fell flat.

  • In Tunisia, regulatory red tape and limited digital infrastructure made it hard to gain traction.

  • In Uganda, Jumia faced a unique set of challenges: a heavy reliance on cash-on-delivery, limited internet penetration in rural areas, and a consumer base that prioritizes affordability over convenience. While mobile money has helped bridge some gaps, logistical costs and low average order values make profitability difficult.

What works in Nigeria, Jumia’s strongest market, isn’t necessarily going to work in other countries. Unfortunately, this failure to adapt led to more misses than hits.

 The Logistics Nightmare

Let’s be honest: logistics in Africa is no walk in the park. Poor infrastructure, long distances, varying tax/regulatory regimes and fragmented supply chains make delivering goods reliably a Herculean task. Jumia faced these challenges head-on, but its solutions didn’t always measure up.

Customers complained about delays, high shipping costs, and inconsistent service. And in an industry where trust is everything, these issues quickly turned people away. Add to this the reliance on cash-on-delivery—a workaround for low trust in online payments—and you’ve got a recipe for inefficiency and pilferage.

 Profitability? Still a Dream

Even in its strongholds, Jumia hasn’t been able to make consistent profits. Sure, revenue grew by 19% in Q1 2024, but the company is still burning money. Promotions and discounts may bring in orders, but they don’t pay the bills.

Without a solid path to profitability, Jumia’s pullback in less profitable markets like Uganda seems inevitable. It’s all about cutting losses and focusing on where the money is—markets like Nigeria, Kenya, and Egypt.

 Is Africa Ready for E-Commerce?

Jumia’s struggles also raise a bigger question: Is Africa ready for e-commerce on this scale?

  • Internet penetration is improving, but rural areas are still left behind.

  • Purchasing power is uneven, with only a small percentage of consumers able to shop online regularly.

  • And let’s not forget the trust issue—many people simply prefer cash transactions, which adds complexity and cost.

These hurdles aren’t unique to Jumia, but they highlight the tough road ahead for any e-commerce player in Africa. In my opinion, one of the key factors that will slow the company’s growth is CREDIT.  

The Credit Gap

One of the biggest advantages platforms like Amazon have is access to credit systems—credit cards and Buy Now, Pay Later (BNPL) options—that allow customers to make purchases beyond their immediate cash flow. In Africa, where credit card penetration is low and BNPL solutions are rare, most consumers rely on cash or mobile money.

This limits spending power, reduces the average order size, and excludes customers who might otherwise purchase high-value items. For Jumia, the lack of accessible credit systems in its markets has been a major hurdle to scaling e-commerce in the way global giants have.

 What Can We Learn?

Jumia’s retreat isn’t just about one company’s struggles; it’s a wake-up call for anyone looking to do business in Africa. Companies like Uber and Airbnb have also struggled to achieve the same success they enjoy in other regions. Scaling across the continent requires more than deep pockets—it demands a keen understanding of local markets, adaptable strategies, and the patience to navigate infrastructure and cultural challenges.

 For Jumia, the road to profitability might mean fewer markets but a sharper focus. For everyone else, it’s a lesson in how ambition needs to be grounded in strategy.

 

Need Help Navigating African Markets?

At NiaBridge, we specialize in helping businesses succeed in Africa’s dynamic landscape. Whether you’re expanding operations or starting fresh, we’ve got the insights and expertise to guide you. Let’s talk.

Phillip Mutebi