Africa’s leading e-commerce platform, Jumia Technologies, has announced that it will discontinue its food delivery services by end of December 2023.
The move aims at streamlining its operations and focusing on its core physical goods and Jumia Pay business will impact seven countries where Jumia Foods has been operating, namely: Kenya, Nigeria, Uganda, Morocco, Tunisia, Algeria, and Côte d’Ivoire.
After conducting a strategic evaluation of Jumia food, the company determined that the current market and macroeconomic environment is not suitable to its food delivery business. As a result, it said it will terminate all food delivery operations in all markets by the end of December 2023.
JUmia said the decision aligns with the company’s strategy of maximizing its resources and capital allocation while pursuing profitability. The food delivery business, which has been unprofitable since inception, accounts for approximately 11% of Jumia’s Gross Merchandise Value (GMV) for the nine months ended September 30, 2023.
“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, which we believe does not offer the same upside potential – food delivery,” said Francis Dufay, Chief Executive Officer of Jumia.
“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,” said Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia.
Jumia’s recent strategic shift is a testament to its commitment to profitable growth and dedication to its core physical goods business in its eleven countries of operation. In line with this decision, several employees currently dedicated to the food delivery business will transition to the continuing physical goods business in these countries.