Summary:
- Jumia, the African e-commerce platform, is shutting down its food delivery service in seven countries by December 2023, citing unsuitability and prioritizing growth in its core physical goods business and payment services.
Jumia Technologies, the African e-commerce platform, has announced the discontinuation of its food delivery business in all seven African countries where it currently operates, including Uganda, Nigeria, Kenya, Morocco, Tunisia, Algeria, and Ivory Coast.
In a statement, the company revealed its decision to close the food delivery service by the end of December 2023. This move is part of Jumia’s strategic focus on expanding its core physical goods business and JumiaPay across all its operating countries.
The decision comes after a strategic review, with Jumia citing the unsuitability of the food delivery business in the current operating environment and macroeconomic conditions. The company aims to optimize capital and resource allocation, aligning with its path to profitability.
Jumia’s CEO, Francis Dufay, emphasized the potential for growth and profitability in the physical goods business, stating, “In the current context, it means leaving a business line, which we believe does not offer the same upside potential – food delivery.”
The food delivery segment represents approximately 11% of Jumia’s Gross Merchandise Volume (GMV) for the nine months ending September 30, 2023, and has consistently operated at a loss since its inception.
According to Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia, food delivery poses challenging economics, and the company’s decision reflects a prioritization of opportunities and expected return on investment. Jumia, founded in 2012, operates as a Pan-African technology company with a focus on a marketplace, logistics service, and payment service. The logistics service facilitates package delivery through local partners, while the payment services support online transactions within Jumia’s ecosystem.
