Africa-focused e-commerce company Jumia Technologies plans to shut down its South African online fashion retailer, Zando, and its operations in Tunisia by the end of the year, as part of its strategy to concentrate on other markets.
Jumia is taking aggressive steps to cut costs and achieve profitability, including reducing its workforce, exiting everyday grocery and food delivery services, and scaling back delivery operations not directly related to its core e-commerce business.
“The trajectory of the countries did not align with the strategy of the group,” CEO Francis Dufay said, citing complex macroeconomics, the competitive environment and low medium term potential for growth and profitability.
“We believe it’s the right decision. It enables us to refocus our resources on the other nine markets, where we see more promising trends in terms of scale and profitability.”
Jumia’s remaining markets include Egypt, Kenya, Morocco and Nigeria. Dufay said success in any would “easily enable us to recover” lost volumes from South Africa and Tunisia.
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The two businesses accounted for only 2.7% of total orders and 3% of gross merchandise value in the six months ended June 30, Dufay said.
Zando.co.za was founded in 2012 and has grown to become a well-known South African online fashion platform. In Tunisia, the business has been operating under the Jumia brand for a decade and selling general merchandise.
Dufay said he was not planning to sell either operation, which will hold clearance sales before shutting.
The closures mean axing about 110 jobs, Dufay said, but some may be relocated to other parts of the group’s business.
The exit in South Africa comes shortly after the country’s biggest online retail group Takealot announced the sale of its online fashion business Superbalist in September, amid increasing competition from fast-fashion Chinese e-commerce retailers Shein and Temu.
Dufay said in South Africa “growth potential was definitely more difficult” because of the highly competitive environment.
