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Jumia shutters food delivery business to focus on e-commerce

Brian Murimi by Brian Murimi
December 14, 2023
in News
Reading Time: 2 mins read

Jumia Technologies, the leading pan-African e-commerce company, announced Wednesday it will shut down its food delivery business by the end of December in all African markets where it currently operates.

The move comes as part of a strategic refocusing on Jumia’s core physical goods business and its financial services arm JumiaPay. The company said its food delivery operations account for about 11% of its total business but have failed to turn a profit since launching.

“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,” Jumia CEO Francis Dufay said.

Jumia said the decision will allow it to optimize its resources and continue working toward achieving profitability. The company’s stock price has tumbled over 60% this year as it struggles to stem losses.

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The shutdown includes food delivery services in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria and Ivory Coast. Jumia said employees currently working on food delivery will transition to roles in its core e-commerce business.

Antoine Maillet-Mezeray, Jumia’s executive vice president of finance and operations, said the “economics” of the food delivery business remain “very challenging” in Africa and globally. He said Jumia wants to focus its effort on business areas with higher growth and return potential.

“This is a matter of prioritization of opportunities, and expected return on investment,” Maillet-Mezeray said.

While startups like Jumia have raced to bring e-commerce services to underserved markets across Africa, many have struggled to overcome logistical hurdles and achieve profitability. Jumia warned last month it may need to raise more capital to fund its operations.

The company has now staked its future on the thriving African consumer market and demand for online shopping and financial services. Jumia operates e-commerce platforms in 11 African countries and reported $83 million in physical goods gross merchandise volume last quarter.

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Brian Murimi

Brian Murimi

Brian Murimi is a journalist with major interests in covering tech, corporates, startups and business news. When he's not writing, you can find him gaming, watching football or sipping a nice cup of tea. Send tips via bireri@thesharpdaily.com

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