Jumia Technologies will wind down its operations in Algeria by the first quarter of 2026, marking another strategic retreat as competition from Chinese e-commerce platforms intensifies across African markets.
The move follows earlier exits from South Africa and Tunisia and leaves Jumia operating in eight core markets. The decision underscores a broader shift away from its former expansion-driven model toward a profitability-focused strategy.
Leaner Footprint, Sharper Focus
Algeria represented approximately 2% of Jumia’s gross merchandise value (GMV) in 2025, limiting its strategic weight despite relatively high internet penetration. Analysts point to restrictive trade policies, import controls and a predominantly cash-based economy as structural barriers to scalable growth.
Chief Executive Francis Dufay said the company closed 2025 with “clear momentum,” citing revenue growth, stronger customer engagement and continued progress toward profitability. Nigeria, Jumia’s largest market, delivered 50% GMV growth in the fourth quarter, with orders increasing 33% year-on-year. Notably, 61% of orders originated from secondary cities, reflecting the reach of Jumia’s logistics infrastructure beyond major urban centers.
For the full year 2025, Jumia narrowed its net loss to $60.1 million from $97.6 million in 2024. The company expects to reach adjusted EBITDA break-even in the fourth quarter of 2026 and aims for its first full-year profit in 2027.
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Chinese Platforms Reshape the Landscape
Jumia’s restructuring comes as Temu and Shein expand aggressively across Africa, altering pricing structures and consumer expectations.
To strengthen its cost competitiveness, Jumia has expanded its sourcing operations in China, opening an office in Yiwu—one of the world’s largest wholesale trade hubs—to procure goods directly from manufacturers. Sales from international sellers, predominantly China-based, surged 82% year-on-year, with approximately 24,000 Chinese sellers now active on the platform.
Dufay emphasized that Jumia’s logistics capabilities, cash-on-delivery model and network of pickup stations in secondary cities provide resilience against mounting competition. “People thought they would eat our lunch, but it’s not a home run that everyone expected. We can actually fight against those platforms in our markets,” he said.
South Africa as a Test Case
South Africa, the continent’s most developed e-commerce market, illustrates the scale of disruption driven by Chinese entrants—even as Amazon expands its footprint in the country.
Temu’s parent company reportedly generated $34.9 billion in global revenue and invested around $2 billion in advertising, underlining the financial firepower behind its international growth strategy.
According to the Localisation Support Fund, Shein and Temu together captured 3.6% of South Africa’s clothing, textile, footwear and leather market, generating roughly 7.3 billion rand ($405 million) in sales. Combined, they account for around 37% of the sector’s e-commerce sales, with Shein alone holding approximately 28% of online women’s fashion.
Survey data suggests nearly one in three South Africans has purchased from Temu, signaling rapid consumer adoption. Projections indicate that their combined market share could climb significantly—potentially approaching 63% of e-commerce retail if current growth trends continue.
Profitability Over Expansion
Since assuming leadership in late 2022, Dufay has prioritized cost discipline following a dramatic decline in Jumia’s share price, which fell more than 95% from its 2021 peak. The company has exited underperforming markets, discontinued grocery and food delivery services, and reduced headcount to improve operational efficiency.
Fourth-quarter revenue rose 34% year-on-year to $61.4 million, while adjusted EBITDA losses narrowed substantially.
As Temu and Shein intensify their African expansion, Jumia is betting that a streamlined operational footprint, closer integration with global supply chains and infrastructure tailored to local market realities will allow it to defend market share—and ultimately achieve sustained profitability in an increasingly competitive digital economy.
