Jumia Technologies, an e-commerce company with an emphasis on Africa, has said that it will shut down its Tunisian operations and its online fashion store, Zando, in South Africa by the end of the year, to concentrate on markets with greater development potential around the continent, such as Nigeria and others, this strategic decision seeks to maximize resources.
According to a statement issued by the company on Wednesday, the decision was made as Jumia assessed its operations in the two nations, which made up a minor portion of its total business. Jumia reports that South Africa and Tunisia provided only 3.5% and 2.7% of total orders and 4.5% and 3.0% of gross merchandise value (GMV) for the year ending December 31, 2023, and the first half of 2024, respectively.
Jumia thinks that shifting resources to markets with better performance will greatly improve the business’s operational effectiveness and spur expansion.
Francis Dufay, the CEO of Jumia, said in a statement available to BrandSpur business and economy news desk, that the decision to withdraw from the two countries was challenging.
“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,” he added.
The main markets that Jumia still serves are Nigeria, Kenya, Egypt, and Morocco. Dufay was hopeful that the volumes lost as a result of the closures could be somewhat compensated for by success in these areas. Just 2.7% of Jumia’s total orders and 3% of its Gross Merchandise Value (GMV) came from Zando and the Tunisian operations during the first half of the year. While Jumia’s Tunisian operations have been selling general products under the Jumia brand for ten years, Zando, which was formed in 2012, has emerged as one of South Africa’s top online fashion platforms.
Dufay stated that there are no intentions to sell either business despite the closures. Before they close, clearance sales will be held, which would result in the loss of about 110 jobs. However, some staff members might be moved to other Jumia departments.
This comes after Takealot, the biggest online retailer in South Africa, recently announced that it is selling its fashion division Superbalist due to growing competition from international fast-fashion e-commerce giants like Shein and Temu.
Dufay admitted that the fiercely competitive climate in South Africa presents serious obstacles to the industry’s expansion in these countries. We sincerely appreciate their dedication and commitment to Jumia.
The e-commerce behemoth thinks it can better position itself for growth by concentrating its resources on the nine African regions it still has.
