Jumia is shuttering its food delivery service in some African countries
At the end of December 2023, Jumia will cease operations for its food delivery service, Jumia Food, in Nigeria. In addition to Nigeria, several other African nations including Kenya, Morocco, the Ivory Coast, Tunisia, Uganda, and Algeria are also impacted by this decision.
Jumia is a technology company based in Africa that primarily offers three services: payment processing, logistics, and marketplace. While the payment services make it easier to pay for online transactions made within Jumia's ecosystem, the logistics service makes it possible for packages to be delivered through a network of regional partners.
It's important to note that Jumia's main e-commerce platform, focusing on general merchandise, will still operate in Nigeria and other markets. The decision to close Jumia Food was made independently and was influenced by profitability considerations.
Jumia Food has struggled to turn a profit since its founding, even though it accounted for 11% of Jumia's Gross Merchandise Value (GMV) in the first nine months of 2023.
Jumia CEO, Mr. Francis Dufay, underscored the importance of shifting focus to Jumia's physical goods business. The decision to end Jumia Food operations will play a key role in driving this strategic approach.
It's worth noting that Jumia is committed to continued growth and progress. The global economic downturn is impacting numerous businesses, prompting companies to strategize diverse methods to sustain operations.
Nevertheless, according to market research, the Nigerian food delivery market is anticipated to experience a Compound Annual Growth Rate (CAGR) of 12.2% from 2023 to 2028, reaching $1.7 billion.
