Jumia Technologies, a pan-African e-commerce platform, has announced plans to close its food delivery business, Jumia Food.
In a statement, the company said that it “will continue to operate its core physical goods business and its JumiaPay business in all of its countries of operation”.
Jumia currently operates its food delivery business in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria and Ivory Coast.
The company said that a number of affected employees “will transition to the continuing physical goods business in these countries”.
“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. This decision is in line with the Company’s 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.
“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,” added 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,” Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia reiterated.