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Posted By Udokabestluv On October 16th, 2024

Africa-focused e-commerce retailer Jumia Technologies will shut down its South African online fashion retailer Zando and its Tunisian operations by the end of the year.

CEO Francis Dufay revealed that the move is part of a strategic refocus on more profitable markets such as Nigeria.

To achieve profitability, Jumia is implementing aggressive cost-cutting measures, which include reducing its workforce, exiting the everyday grocery and food delivery sectors, and scaling back delivery services unrelated to its core e-commerce business.

“The trajectory of the countries did not align with the strategy of the group,” Dufay explained, citing complex macroeconomic conditions, a competitive landscape, and limited medium-term growth potential in these regions. He added, “We believe it’s the right decision,” emphasizing that the move will allow the company to concentrate its resources on the other nine markets where growth prospects are more promising.

Jumia’s remaining markets include Egypt, Kenya, Morocco, and Nigeria. Dufay expressed confidence that success in these regions could help recover volumes lost from the closures in South Africa and Tunisia. He noted that Zando and the Tunisian operations contributed only 2.7% of total orders and 3% of Gross Merchandise Value during the first half of the year.

Zando.co.za, founded in 2012, has established itself as a prominent online fashion platform in South Africa. Meanwhile, Jumia’s Tunisian operations have been running under the Jumia brand for a decade, offering general merchandise.

Dufay confirmed that there are no plans to sell either operation, which will hold clearance sales before their shutdown. The closures will result in approximately 110 job losses, although some employees may be relocated within the company’s other divisions.

This decision comes shortly after South Africa’s largest online retail group, Takealot, announced the sale of its fashion subsidiary, Superbalist, amid rising competition from fast-fashion e-commerce giants like Shein and Temu. Dufay acknowledged that the growth potential in South Africa is increasingly challenging due to the highly competitive environment.

Source: https://punchng.com/jumia-exits-south-africa-tunisia-faces-nigeria-others/