Home Pan Africa Jumia’s Steady Ascent: Navigating Competition in African E-Commerce

Pan Africa

Jumia’s Steady Ascent: Navigating Competition in African E-Commerce

February 24, 2025

(3 Minutes Read)

Jumia Technologies, Africa’s leading e-commerce platform, continues to grow despite the entry of Chinese retail giant Temu into the African market. The company has strategically optimised its operations and cut costs while expanding into underserved areas, reinforcing its commitment to sustainable growth.

Francis Dufay, Jumia’s CEO, highlighted the company’s resilience in a competitive environment, noting that the African e-commerce market has enough room for multiple players. This statement comes as Temu, part of China’s PDD Holdings, launched its services in Nigeria in December 2023, marking its first move into the continent. While acknowledging Temu’s aggressive approach, Dufay expressed confidence in Jumia’s expansion strategy, stating that the company is well-positioned to take advantage of Africa’s growing digital economy.

To enhance financial stability, Jumia has implemented a comprehensive cost-cutting plan, which includes workforce reductions, discontinuing daily grocery items and food delivery services, and streamlining logistics. These initiatives aim to improve operational efficiency while strengthening Jumia’s core e-commerce business.

With six million customers across nine African countries—including Nigeria, the continent’s most populous nation—Jumia continues to broaden its reach. These markets collectively represent a consumer base of over 600 million people, showcasing significant growth potential. The company is focused on expanding its presence in new urban areas and underserved rural communities, where e-commerce adoption is still low.

Despite the influx of foreign competitors, Jumia’s leadership remains confident. Dufay asserted that while new entrants may capture some market share, the overall sector’s growth creates ongoing opportunities. This optimism is bolstered by Africa’s rapidly digitizing economy and the increasing acceptance of online retail.

Jumia’s strategy also involves reducing financial losses. The company aims to lower its pre-tax loss by about a third, with expectations of bringing it down to between USD 65 million and USD 70 million within the year. This financial adjustment is anticipated to set Jumia on a more sustainable path toward long-term profitability.

As the African e-commerce landscape evolves, Jumia’s ability to balance growth with cost management will be essential. Its focus on seizing market opportunities while maintaining financial discipline positions it as a strong competitor in an increasingly crowded industry. With Temu’s expansion signalling greater interest in Africa’s digital economy, Jumia’s strategic changes will be crucial for securing its market position in the coming years.