Africa-focused e-commerce retailer Jumia Technologies has announced plans to close its South African online fashion retailer, Zando, and its operations in Tunisia by the end of the year.
This strategic move is aimed at optimizing resources and focusing on markets with stronger growth potential across the continent, which include Nigeria and others.
The company in a statement released on Wednesday, said the decision came as Jumia evaluates its operations in the two countries, which accounted for a small share of the company’s overall business.
According to Jumia, for the year ended December 31, 2023, and the first half of 2024, South Africa and Tunisia contributed just 3.5% and 2.7% of total orders, and 4.5% and 3.0% of gross merchandise value (GMV), respectively.
Jumia believes that reallocating resources to higher-performing markets will significantly enhance the company’s operational efficiency and accelerate growth.
Commenting on the decision Jumia CEO Francis Dufay, described the exits from the two markets as a difficult decision.
“Since assuming the role of CEO, I have focused on initiatives aimed at strengthening our business and placing us on a path to profitability.
“After a thorough analysis, we made the difficult decision to close down our operations in South Africa and Tunisia. Both businesses account for a negligible portion of our overall operations.
“Furthermore, competitive and macroeconomic conditions in both markets have limited each country’s growth potential and their contribution to our overall business has not aligned with expectations.
“Decisions like these are never easy and we are extremely grateful to team members in both countries, who worked tirelessly to serve our customers every day. We are also grateful to our suppliers, vendors, and logistics partners in
Jumia’s key remaining markets include Egypt, Kenya, Morocco, and Nigeria. Dufay expressed optimism that success in these regions could help offset the volumes lost from the closures. Zando and the Tunisian operations contributed only 2.7% of Jumia’s total orders and 3% of its Gross Merchandise Value (GMV) in the first half of the year.
Zando, founded in 2012, became a leading online fashion platform in South Africa, while Jumia’s Tunisian operations have operated under the Jumia brand for a decade, offering general merchandise.
Despite the closures, Dufay confirmed there are no plans to sell either operation. Clearance sales will be held before they shut down, resulting in around 110 job losses, though some employees may be relocated to other divisions within Jumia.
This development follows the recent announcement by South Africa’s largest online retail group, Takealot, which is selling its fashion subsidiary Superbalist in response to mounting competition from global fast-fashion e-commerce players like Shein and Temu.
Dufay acknowledged that the highly competitive environment in South Africa poses significant challenges to growth in the sector.these markets. We deeply thank them for their hard work and service to Jumia,” he said.
The e-commerce giant believes that refocusing resources on its remaining nine markets across Africa will enable the company to better position itself for growth.