Africa-focused e-commerce platform Jumia Technologies has announced plans to exit the South African and Tunisian markets at the end of this year to concentrate on markets with stronger growth potential.
It will close its South African online fashion retailer Zando and its Tunisian operations to sharpen its focus on its other markets, notably Egypt, Kenya, Morocco and Nigeria.
CEO Francis Dufay told Reuters that complex macroeconomics, the competitive environment and low medium-term potential for growth and profitability were among the reasons for the planned departures.
According to the Techpoint Africa news service, Jumia’s South African arm, operating under the brand Zando, and its Tunisian operations, contributed only 3.5% and 2.7% of total orders and 4.5% and 3% of the gross merchandise value (GMV) respectively in 2023, numbers that fell further in the first half of 2024.
Neither of these Zumia divisions are recent arrivals. The Zando and Tunisian businesses have been operating for ten years or more. Zando.co.za, founded in 2012, has grown to become a well-known South African online fashion platform. The Tunisian business has been operating under the Jumia brand for a decade, selling general merchandise.
Plans are to close rather than sell both operations following clearance sales. About 110 jobs will go, but some may be relocated to other parts of the group's business.
Reuters says Jumia is aggressively cutting costs to try to turn profitable, including reducing head count, exiting everyday grocery items and food delivery and cutting delivery services not related to its e-commerce business.
Techpoint Africa says Jumia recently raised nearly US$100 million through secondary share sales and expanded its supplier base and logistics network.
