Why Did Jumia Exit Tunisia? A Reflection on Internal and Market-Specific Challenges

After seven years of operations, Jumia E-Services recently announced its decision to exit Tunisia by the end of the year. This move is part of a broader strategy to focus on markets with strong growth potential and to improve profitability. As someone who follows the dynamics of e-commerce in Africa, I couldn’t help but wonder: why did Jumia, a major player in African e-commerce, decide to leave Tunisia?

The reasons behind Jumia’s exit are rooted in a combination of internal challenges, management missteps, and specific conditions of the Tunisian market. In an interview with Reuters, Jumia's CEO, Francis Dufay, said the Tunisian market no longer aligned with the company's broader strategic goals. Tunisia accounted for only 2.7% of Jumia’s global orders—a figure that just wasn’t substantial enough for a company operating at such a large scale across Africa. The decision to refocus on higher-growth markets like Egypt, Nigeria, and Kenya is part of a strategy to curb the successive losses Jumia has reported over the past fiscal years.

In my view, however, this does not fully explain Jumia's exit from Tunisia. A series of management missteps was one of the major internal issues. I see Jumia's consistent losses as a reflection of poor financial management, perhaps driven by an overexpansion strategy. Multiple markets were entered without a full understanding of local consumer behavior. In Tunisia, Jumia did not adapt to the fact that many customers prefer cash payments or cash on delivery. Due to the clash between Jumia's online payment model and local payment preferences, the adoption was quite difficult.

In spite of having a motivated local team (I believe), Jumia's internal management struggled to address the unique challenges of the Tunisian market. Their reliance on third-party vendors was also a cause for concern regarding product quality. Jumia's reputation for selling low-quality goods was established early on, and despite efforts to improve it, the perception persisted. Tunisia is a country where original products often coexist with counterfeits, which makes maintaining consistent quality standards challenging.

On the external front, the company faced fierce competition from local e-commerce platforms and supermarkets like Mytek, Ben Yaghlane, and Aziza. In addition to offering lower prices, these players had physical stores, making them attractive to Tunisian consumers who prefer to inspect and test products before buying. It was clear from these competitors that they understood the local market better and tailored their product offerings to meet the needs of price-sensitive consumers.

In conclusion, Jumia’s decision to exit Tunisia was driven by a mix of internal mismanagement, market misalignment, and the rise of strong local competition. It’s a reminder that success in e-commerce isn’t just about having a large-scale operation but understanding the local market's needs and preferences.