Online fashion retailer Zando to cease operations in SA

International online retailers entering the local market resulted in Zando facing tough competition.

African e-commerce firm Jumia Technologies plans to close its local subsidiary, Zando, and its Tunisia operations by the end of the year.

According to a statement, the closure of its business in these markets will allow Jumia to optimise resources and focus on its most promising markets that have stronger growth potential.

For the year ended 31 December 2023, and the six months ended 30 June 2024, SA and Tunisia combined accounted for only 3.5% and 2.7% of total orders, and 4.5% and 3% of gross merchandise volume, respectively.

The strategic decision to close operations in these markets is expected to improve overall operational efficiency across Jumia's business, it says.

Jumia CEO Francis Dufay explains: "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 macro-economic 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. We are also grateful to our suppliers, vendors and logistics partners in these markets,” comments Dufay.

“Jumia believes that exiting these markets and refocusing resources on its other nine markets will leave the company better positioned to accelerate overall growth and further improve efficiency,” says Jumia.

Zando.co.za was founded in 2012, growing to become among SA’s biggest online fashion e-tailers.

In April, the e-tailer introduced a new division, Zando Global, to offer international products and apparel to local shoppers.

The unit was expected to shake-up the local online shopping landscape, which is increasingly dominated by foreign shopping sites, including Temu, Shein and AliExpress, among others.

The new international online retailers entering the local market prompted stiff competition, in the face of low-cost products manufactured mostly in China and free shipping offered by newcomers.

In September, online retailer Takealot Group sold its Zando rival, Superbalist, to a South African consortium of retail and private equity investors.

Takealot admitted Superbalist had seen a difficult financial year, having been at the height of the storm when Chinese online fast-fashion retailer, Shein, came into the country.