Jumia Discontinues Food Delivery Across Seven Markets
The company shifts focus to expanding physical goods business.
Pan-African e-commerce platform Jumia has disclosed its intention to discontinue its food delivery service, Jumia Food. The company said its food delivery business is not aligned with the current operational landscape and prevailing macroeconomic conditions in the seven markets, including Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast.
As a result, Jumia will cease its food delivery operations across these markets by the end of December the decade-old company undertook several cost-cutting efforts. It discontinued the food delivery operations in Egypt, Ghana, and Senegal; suspended logistics-as-a-service in all markets except Nigeria, Morocco, and Ivory Coast; halted Jumia Prime across all its markets; and scaled back first-party groceries in Algeria, Ghana, Senegal and Tunisia. At the time, Jumia said these accounted for less than 1% of the group’s gross merchandise volume (GMV) in the first nine months of 2022 and 2% of group adjusted EBITDA loss.
Jumia Food across the recently closed seven markets constituted approximately 11% of Jumia’s gross merchandise volume (GMV) for the nine months ending September 30, 2023. For years, Jumia Food was the fastest-growing category on the e-commerce platform and second-largest category in volume terms behind fashion; in Q3 2022, for instance, food delivery orders grew 38% year-over-year and accounted for 20% of items sold on the platform.
Jumia has been cutting losses all year (losses fell 67% year-over-year in Q3 2023). The decision to shut it down is in line with its strategy to optimize its capital and resource allocation and to continue its path to profitability, the company’s main objectives since CEO Francis Dufay joined.
Some employees previously working in the food delivery business will transition to roles within the ongoing physical goods business in these countries, as communicated by Jumia in the statement. However, the restructuring also entails a reduction in the workforce, leading to the departure of a few employees.