Jumia Technologies, a leading African e-commerce platform, is shutting down its South African online fashion retailer Zando and its Tunisian operations by year-end. This strategic move aims to streamline operations and prioritize markets with higher growth and profitability potential.
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The company is undergoing a cost-cutting effort to achieve financial sustainability. This includes reducing staff size, exiting non-core businesses like groceries and food delivery, and streamlining delivery services.
“The economic conditions and competitive landscape in South Africa and Tunisia don’t align with our long-term strategy,” explained Jumia CEO Francis Dufay. “These factors limit their potential for growth and profitability in the near future.”
Dufay emphasized the company’s belief in this decision, stating it allows them to dedicate resources to their remaining nine markets, which exhibit promising trends for both scale and profitability. These markets include Egypt, Kenya, Morocco, and Nigeria. The CEO expressed confidence that success in any of these markets would readily offset the lost volume from South Africa and Tunisia.
Data provided by Dufay reveals that South Africa and Tunisia accounted for a minimal portion of Jumia’s overall business. In the first half of 2024, these two regions contributed only 2.7% of total orders and 3% of the total merchandise value.
Jumia has no plans to sell either Zando or the Tunisian operations. Instead, both will conduct clearance sales before final closure. This decision will unfortunately result in the loss of approximately 110 jobs. Dufay, however, mentioned the possibility of relocating some staff within Jumia.
Jumia’s exit from South Africa follows a similar move by Takealot Group, the country’s largest online retailer. Takealot recently sold its online fashion business Superbalist amidst growing competition from Chinese fast-fashion giants like Shein and Temu.
Dufay specifically highlighted the intense competition in South Africa as a significant factor hindering growth potential.
