Jumia Technologies, an African-focused e-commerce giant, will close its South African online fashion retailer, Zando, and its Tunisian operations by the end of the year.
This decision comes as part of the company’s broader strategy to streamline operations and sharpen its focus on more profitable markets, CEO Francis Dufay revealed in an interview with Reuters.
Aggressive Cost-Cutting to Lead to Profitability and Job Cuts
Jumia is taking significant measures to reduce costs in its quest for profitability. The company is cutting its workforce, exiting everyday grocery and food delivery services, and focusing solely on its core e-commerce business. Dufay emphasized that the countries being exited did not align with Jumia’s long-term strategic goals.
“The trajectory of the countries did not align with the strategy of the group,” Dufay said, attributing the decision to complex macroeconomic conditions, stiff competition, and limited medium-term growth potential. He also said the closures will result in approximately 110 job losses, though some employees may be relocated to other parts of Jumia’s business
Focus on Nine Key Markets
Dufay stated that Jumia will now concentrate its resources on nine other markets where the company expects stronger growth and profitability. These key markets include Egypt, Kenya, Morocco, and Nigeria. The CEO expressed confidence that these regions would more than compensate for the loss of volumes from South Africa and Tunisia.
“We believe it’s the right decision,” Dufay added. “It enables us to refocus our resources on the other nine markets, where we see more promising trends in terms of scale and profitability.”
Limited Impact on Business
Jumia’s operations in South Africa and Tunisia accounted for only 2.7% of the company’s total orders and 3% of Gross Merchandise Value (GMV) during the first half of 2024, Dufay noted. Zando, founded in 2012, grew into a well-established South African online fashion retailer, while Jumia has operated in Tunisia for over a decade, selling general merchandise.
However, the company has no plans to sell these operations, which will hold clearance sales before closing.
Competitive Environment in South Africa
Jumia’s exit from South Africa follows a similar move by the country’s largest online retailer, Takealot, which sold its fashion business, Superbalist, in September. Both companies face growing competition from Chinese fast-fashion e-commerce giants Shein and Temu.
Dufay acknowledged the challenging environment in South Africa, stating that “growth potential was definitely more difficult” due to the highly competitive market.
