🎬Giving up?

BUSINESS
“We’re testing things out to see if we can become profitable” says Jumia

If there is one thing that never gets old, it’s how African businesses continue to prove the ‘do not put all your eggs in one basket’ adage wrong time after time.

Jumia, Africa’s top e-retailer 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. This is the latest in Jumia’s bevy of exits since closing its businesses in Cameroon and Tanzania in 2019.

Couldn’t stand the heat? Despite Zando’s massive popularity, Amazon’s entry into the South African e-commerce scene made it a cat-and-mouse contest. According to analysts, Amazon’s financial backing coupled with its variety of products and extensive delivery options made it a pretty straightforward decision for Jumia. Chinese e-retailers, Shein & Temu had also been fierce competitors for the past couple of years.

Chasing profitability.
Since launching in 2021, Jumia has never posted a profit. In previous years, it has;

• Slashed its workforce by 20%, an exercise that saw 900 staff exit the company

• It posted a loss of $178 million in 2018, after raking in a cool $138 million as revenue during the same year.

• Last year, its account statements read a loss of $73 million, a 64% reduction in operating losses from the previous year.

CEO, Francis Dufay believes the exit is the right decision, adding “It enables us to refocus our resources on the other nine markets, where we see more promising trends in terms of scale and profitability."

What else gave? Last year, the company discontinued its food delivery service, Jumia Food in seven African countries citing unfavorable macro-economic conditions in the same countries it is now focusing its e-commerce business on. -EA.

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SHOWER THOUGHTS

NEWS
Round the continent

• An overturned gasoline tanker sparked into an inferno in Jigawa State, Nigeria killing over 140 people who tried to scoop up fuel from the accidented vehicle.

• Meta expressed concern over its inability to take down a graphic video showing two men bleeding after they were beaten for allegedly being gay.

• Moove, the Nigerian company that leases cars to prospective Uber drivers has commenced operations in Mexico.

• Kenya’s estranged VP, Rigathi Gachagua pleaded not guilty in a senate hearing yesterday in a last-ditch attempt to save his job.

• Read: Where does the Trump vs. Kamala brawl leave Africa?