Jumia Reshapes Business Strategy to Defend Its Market Share, Amid Growing Competition From Chinese E-commerce Giants

Jumia, Africa’s leading e-commerce platform, is revamping its business strategy to strengthen market share, enhance profitability, and regain investor confidence.

This strategic move by the e-commerce giant comes amid growing competition from Chinese e-commerce giants Temu and Shein.

As Temu and Shein gain ground in Africa with ultra-low prices and efficient logistics, Jumia is forging partnerships with Chinese merchants to broaden its product range and localize offerings. Jumia’s CEO Francis Dufay emphasized the company’s competitive edge, stating, “We have more diverse product offerings in categories they can’t offer, we’re more tailored to the market, and we have competitive products from international sellers.”

Temu and Shein have rapidly expanded in Africa, particularly in South Africa, by leveraging ultra-low prices and efficient logistics, significantly disrupting local retail markets. Their success stems from offering a vast variety of products at prices that local competitors struggle to match, driven by sophisticated pricing strategies, economies of scale, and streamlined supply chains.

Temu launched in Nigeria in November 2024, gaining traction through aggressive advertising, deep discounts, and promises of delivery within two weeks. Shein, while more targeted, is using influencer-driven marketing to expand in major urban centers across South Africa, Kenya, and Ghana. Neither retailer has established full physical operations on the continent.

Both e-commerce giants’ entry into Africa is disrupting established local e-commerce businesses like Jumia. This has also seen local retailers face challenges in competing with the low prices and aggressive marketing strategies of these platforms. 

However, while Temu and Shein can win the price war, their cross-border model comes with trade-offs, longer shipping times, complicated returns, and limited after-sales support. Some analysts argue that trust remains Jumia’s critical advantage and the company could still dominate the market by being consistent, if not the cheapest.

Recall that earlier this year, Jumia announced its financial results for the first quarter ended March 31, 2025. The company reported a revenue of $36.3 million, down 26% year-over-year or 18% year-over-year on a constant currency basis.

Despite these losses, Jumia posted a significant improvement in its loss before income tax, narrowing it to $16.5 million, compared to $39.6 million in Q1 2024. This was mainly due to a $33.5 million improvement in net finance costs, as foreign exchange losses experienced in 2024 did not recur in the same magnitude.

CEO Dufay acknowledged Jumia’s challenges since its 2019 NYSE IPO, with its market capitalization dropping from over $1 billion to about $400 million and its stock declining nearly 90%.

“My focus is simple, deliver the numbers. The target is break-even by 2027,” he said, distancing his tenure from past overpromising.”

Since taking the helm in late 2022, Dufay has reduced losses from $206 million to a projected $50–$55 million in 2025 by cutting jobs, exiting unprofitable markets, and focusing on nine core countries. Following the recent exit of major investor Baillie Gifford, Dufay is engaging new investors through roadshows, prioritizing results over rhetoric.

With improving order growth, customer retention, and fulfillment efficiencies, Jumia appears to be on a clearer path toward long-term profitability and sustainable growth. Nigeria remains central to Jumia’s growth, with the CEO highlighting its vast potential.

The company aims to expand beyond urban centers to reach low-income customers, while also eyeing growth in Kenya, Uganda, and Egypt. Notably, Jumia is focused on achieving profitable growth in 2025 by increasing usage, improving operational efficiency, and significantly reducing cash burn.