By Nqobile Dludla
JOHANNESBURG, Oct 16 (Reuters) - Africa-focused
e-commerce retailer Jumia Technologies will close its
South African online fashion retailer Zando and its Tunisian
operations by the end of the year to sharpen its focus on its
other markets, the CEO told Reuters.
Jumia is aggressively cutting costs to try to turn
profitable, including by reducing head count, 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 low medium term
potential for growth and profitability.
"We believe it's the right decision," he added. "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 in any 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, Dufay said.
Zando.co.za was founded in 2012 and since then has 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.
Dufay said he was not planning to sell either operation,
which will hold clearance sales before shutting.
The closures mean axing about 110 jobs, Dufay said, but some
may be relocated to other parts of the group's business.
The exit in South Africa follows 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 South Africa "growth potential was definitely
more difficult" because of the highly competitive environment.