Africa-based online retailer Jumia Technologies will close South African online fashion retailer Zando and its operations in Tunisia by the end of the year.
The decision to close operations was announced by the CEO Francis Dufay citing complex macroeconomics issues and profitability potential as reasons. Dufay noted that the trajectory of the countries did not align with the strategy of the group.
He added that this will allow Jumia to refocus its resources on nine other businesses that we see as riskier in terms of valuation and benefit.
In addition, Dufay said that the two businesses accounted for just 2.7% of all orders and 3% of total product value in the six months ending June 30.
He noted that the closure would mean the loss of about 110 jobs, but some of those jobs would be transferred to other parts of the workforce.
Jumia’s main markets are Egypt, Kenya, Morocco and Nigeria. Duffy said one of those successes would “enable us to recover” lost production in South Africa and Tunisia easily.
Jumia has been aggressively cutting costs as it tries to turn a profit, including reducing headcount, exiting daily grocery and food deliveries and cutting non-e-commerce delivery services.
Zando.co.za was founded in 2012 and has become a popular online fashion platform in South Africa. The company has been selling general merchandise under the Jumia brand in Tunisia for ten years.
Exit from South Africa comes shortly after the country’s largest online retailer, Takealot, announced in September that it would sell its online fashion business Superbalist amid a tie-up with China’s fast-growing e-commerce brands Shein and Temu.
