E-commerce platform Jumia has announced its plans to discontinue its food delivery service, Jumia Food across seven African markets including Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast effective by the end of December 2023.
As outlined in a recent statement, the company stated that the food delivery business is not aligned with the current operational landscape and prevailing macroeconomic conditions in these markets.
The company now seeks to redirect its focus toward the core physical goods business and maintain its JumiaPay operations across all 11 markets.
Antoine Maillet-Mezeray said, the company’s EVP Finance & Operations said, the decision to exit the food delivery, a business with challenging economics in Africa and globally, was rooted in prioritizing opportunities and expected return on investment.
In Q4 2022, Jumia stopped its food delivery operations in Egypt, Ghana, and Senegal and suspended logistics-as-a-service in all markets except Nigeria, Morocco and Ivory Coast.
The company also stopped Jumia Prime across all its markets and scaled back first-party groceries in Algeria, Ghana, Senegal and Tunisia to cut operational costs.
Jumia Food which was considered the fastest-growing category on the e-commerce platform and second-largest category has not achieved profitability since its inception.
The decision to shut it down aligns with jumias mission to optimize its capital and resource allocation and to continue its path to profitability.
CEO Francis Dufay said “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.” Dufay added.
According to Jumia, some employees previously working in the food delivery business will transition to roles within the ongoing physical goods business in these countries.
As part of the restructuring, some employee will have to leave the company.