Africa-focused e-commerce retailer Jumia Technologies has announced its decision to shut down its South African online fashion retailer Zando and its Tunisian operations by the end of the year.
The development, Investors King gathered, followed diminishing returns in the countries which has been having significant impacts on the firm.
Francis Dufay, the Chief Executive Officer of the retailer giant, expressed strong confidence in Nigeria’s market, saying the firm will refocus on more profitable markets such as Nigeria.
Dufay said Jumia is aiming at more profits, hence, its decision to implement 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.
He said the trajectory of the South Africa and Tunisia did not align with the strategy of the group, citing complex macroeconomic conditions, a competitive landscape, and limited medium-term growth potential in these regions.
Stressing that the group’s exit plan is the right decision, Dufay emphasised that the move will allow the company to concentrate its resources on the other nine markets including Nigeria, where growth prospects are more promising.
Jumia’s remaining markets include Egypt, Kenya, Morocco, and Nigeria.
Dufay maintained that success in these regions could help recover volumes lost from the closures in South Africa and Tunisia.
Giving more facts on the level of shortage Jumia incurred 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.
Findings by Investors King revealed that no fewer than 110 persons will lose their jobs in the affected countries once the closures take effect.
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.
