Jumia Technologies, the leading African e-commerce platform, is making a strategic shift by shutting down its food delivery operations across all seven of its markets by the end of 2023.
Jumia currently operates its food delivery business in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria and Ivory Coast
“It’s a segment that’s very difficult across the world, with very challenging economics and big losses. It’s also a segment that is extremely competitive across the world and Africa,” Chief Executive Officer Francis Dufay said in a statement.
“The economics are tough in this market because the costs are very high and there is plenty of competition, so there is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers.”
This move aims to streamline operations and prioritize Jumia’s core online retail business, paving the way for sustainable growth and profitability.
According to Jumia, the food delivery business represents approximately 11% of the group’s GMV for the nine months ended September 30, 2023, and has not been profitable since the inception of the business.
“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 expected return on investment,” said Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia.
