‘Low potential for profitability’ — Jumia to exit South Africa, Tunisia by year end

Jumia, a pan-African e-commerce platform, has announced plans to close its South African online fashion retailer, ‘Zando’, by the end of the year.

Speaking to Reuters on Tuesday, Francis Dufay, chief executive officer (CEO) of Jumia, said the company’s Tunisian operations will also be shut down to focus on its other markets.

The e-commerce firm operates in 14 countries including Egypt, Kenya, Morocco, Nigeria, Uganda, Tunisia, Algeria, Ivory Coast, and South Africa.

Dufay said Jumia’s decision to exit the South African and Tunisian markets is owed to complex macroeconomics, the competitive environment, and low medium-term potential for growth and profitability.

“The trajectory of the countries did not align with the strategy of the group,” he said.

“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.”

Dufay said the organisation’s success in other regions, would “easily enable us to recover” lost volumes from South Africa and Tunisia.

“These two businesses accounted for only 2.7% of total orders and 3% of gross merchandise value in the six months ended June 30,” the CEO said.

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

He added that the closures would axe about 110 jobs, but some workers may be relocated to other parts of the group’s business.

Dufay said in South Africa “growth potential is definitely more difficult” because of the highly competitive environment.

Zando.co.za was founded in 2012 and has since grown to become a well-known South African online fashion platform.

In Tunisia, the business has been operating under the Jumia brand for a decade, selling general merchandise.

On December 14, Jumia said it would shut down its food delivery business, Jumia Food, by the end of December 2023.