Jumia Technologies, a leading e-commerce platform in Africa, has announced its decision to discontinue its food delivery service, Jumia Food.
Scheduled for the end of December 2023, the shutdown cuts across all its operating countries.
These include Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria.
This step is taken as part of a broader initiative to refocus on its core e-commerce markets.
The company believes that it’s physical goods business has a better thriving potential than the food delivery.
Chief Executive Officer of Jumia, Francis Dufay, confirmed this 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.”
With Jumia Food off the table, the company intends to focus on its core physical goods business and the Jumia Pay platform across its 11 countries of operations.
Jumia Foods constituted 11% of Jumia’s Gross Merchandise Value (GMV) in the first nine months of 2023,
This puts the total value of food delivery orders made on Jumia Food between January and September 2023 at $64 million.
Jumia Food has struggled to achieve profitability since its inception.
In 2021, Jumia Food had a significant 82% year-over-year growth. However, in 2023, the company experienced a decline in Quarterly Active Consumers and Orders..
According to the company, a number of employees of Jumia Food will transition to the core physical goods segment.
This may imply that some of them could be laid off.
Like Jumia, Bolt Food also recently announced its exit from Nigeria and South Africa by December 2023. Bolt Food was a strong player in the African Food delivery market scene.
On the other side of the divide, some food delivery service platforms have a different experience.
Glovo has been deepening its presence in Sub-Saharan Africa and Chowdeck is ticking off milestone achievements. The latter recently celebrated a milestone of delivering food worth over ₦1 billion ($1.2 million) in a single month.
Both Glovo and Chowdeck have struck major partnerships with restaurants and grocery stores including Chicken Republic and ShopRite.
