Zando to close as online retailer Jumia exits SA and Tunisia

Africa-focused e-commerce retailer Jumia Technologies will close its SA online fashion retailer Zando and its Tunisian operations by the end of the year to sharpen its focus on its other markets.

Jumia is aggressively cutting costs to try to turn profitable, including by reducing headcount, exiting everyday grocery items and food delivery, and cutting delivery services not related to its e-commerce business.

“The trajectory of the countries did not align with the strategy of the group,” CEO Francis Dufay said, citing complex macroeconomics, the competitive environment and limited medium-term potential for growth and profitability.

“We believe it’s the right decision. It enables us to refocus our resources on the other nine markets, where we see more promising trends in terms of scale and profitability.”

Jumia’s remaining markets include Egypt, Kenya, Morocco and Nigeria. Dufay said success would “easily enable us to recover” lost volumes from SA and Tunisia.

The two businesses accounted for only 2.7% of total orders and 3% of gross merchandise value in the six months to end-June, Dufay said.

Zando.co.za was founded in 2012 and has grown to become a well-known SA online fashion platform. In Tunisia, the business has been operating under the Jumia brand for a decade and selling general merchandise.

Dufay said he was not planning to sell either operation, which would hold clearance sales before shutting.

The closures meant the lost of about 110 jobs, Dufay said, but some could be relocated to other parts of the group’s business.

The exit from SA comes shortly after the country’s biggest online retail group Takealot announced the sale of its online fashion business Superbalist in September, amid increasing competition from fast-fashion Chinese e-commerce retailers Shein and Temu.

Dufay said in SA “growth potential was definitely more difficult” because of the highly competitive environment.

Reuters