The e-commerce giant Jumia said it will cease operations for its food delivery service, Jumia Food, in Nigeria and other six African countries by the end of December 2023.
The other six Jumia operational countries to face this are Kenya, Morocco, Côte d’Ivoire, Tunisia, Uganda, and Algeria.
“The more we focus on our physical goods business, the more we realise 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,” said Francis Dufay, Chief Executive Officer of Jumia.
Even though Jumia Food accounted for 11% of Jumia’s gross merchandise value in the first nine months of 2023, the company has had difficulty turning a profit since its founding.
This indicates that between January and September of 2023, the total value of food sold on Jumia Food was $64 million, or 11% of $581 million. a measure of the enormous size at which Jumia Food was functioning, but it is not a measure of profits.
Jumia Food has had mixed results since its beginning, but in 2021 it showed a noteworthy 82% year-over-year growth, indicating the company’s solid position in the meal delivery market.
Though, the business witnessed a significant drop in quarterly active customers and orders in 2023. a result of its change to concentrate on profitable areas and lower customer incentives to increase profitability.
Jumia disclosed that several food staff will be moved to the main physical goods division, implying that some may face layoffs.
