Jumia Technologies, an African e-commerce platform has announced its plans to cease food delivery business in all seven countries in Africa.
Jumia currently operates its food delivery services in Uganda, Nigeria, Kenya, Morocco, Tunisia, Algeria, and Ivory Coast.
In its statement, the company has announced that it will close food delivery business this December, to focus on expansion of its core physical goods business and JumiaPay business in all of its countries of operation.
“Following a strategic review of Jumia Food, the Company determined that its food delivery business is not suitable to the current operating environment and macroeconomic conditions in its market, and will close its food delivery operations in all markets by the end of December 2023.” Jumia announced.
The company further says that the decision is in line with its strategy to optimize its capital and resource allocation and to continue its path to profitability.
The food delivery business represents approximately 11% of Jumia’s GMV for the nine months ended September 30, 2023 and has not been profitable since inception of the business,” the company said in a statement.
According to Francis Dufay, the Jumia Technologies Chief Executive Officer of Jumia, the company realised that the more they focus on physical goods business, the more they 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, which we believe does not offer the same upside potential – food delivery, Dufay said.
Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia noted, “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 prioritization of opportunities, and expected return on investment,”
Founded in 2012, Jumia is a Pan-African technology company that is built around a marketplace, logistics service and payment service.
The logistics service enables the delivery of packages through a network of local partners while the payment services facilitate the payments of online transactions within Jumia’s ecosystem.