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Jumia plans to exit food Business in Nigeria and other Countries by December 2023.
Jumia plans to exit food business in Nigeria and other countries by December 2023.
Jumia Technologies AG (JMIA), a top e-commerce platform in Africa, has decided to shut down its unprofitable Jumia Food, a food delivery service.
This move is part of a broader initiative to refocus on its core e-commerce and JumiaPay operations across its markets.
The closure, scheduled for the end of December 2023, comes after a comprehensive strategic review revealed that Jumia Food was not aligning with the current operating environment and macroeconomic conditions.
Jumia Food accounts for approximately 11% of Jumia’s gross merchandise value (GMV) for the nine months ending September 30, 2023. The food delivery segment has struggled to achieve profitability since its inception.
What they are sayingFrancis Dufay, CEO of Jumia, emphasized the potential of their physical goods business, stating,
“The more we focus on our physical goods business, the more we realize that there is huge potential for Jumia to grow, with a path to profitability. We must take the right decision and fully focus our management, our teams, and our capital resources to go after this opportunity. In the current context, it means leaving a business line that we believe does not offer the same upside potential—food delivery.”
Echoing this sentiment, Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia, pointed out the challenging economics of the food delivery industry both in Africa and globally.
“Food delivery remains a business with very challenging economics in Africa and across the world, and we want to focus our efforts on our physical goods e-commerce business in the eleven markets where we operate. This is a matter of prioritizing opportunities and the expected return on investment,” he said.
Jumia Food is currently operational in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and the Ivory Coast. The company plans to transition several employees from the food delivery segment to its ongoing physical goods business in these countries.
This strategic move is indicative of Jumia’s commitment to profitable growth and its focus on the core physical goods business across its 11 markets of operation.
The company’s food delivery business has not been profitable since the inception of the business.
Jumia’s decision to close its food delivery business reflects a strategic prioritization in an increasingly competitive e-commerce landscape, with a clear focus on areas with the highest growth potential and profitability.
