By Adedapo Adesanya
Jumia is shuttering its food delivery service, Jumia Food, in Nigeria by the end of December 2023.
Nigeria is not the only operating country it will be exiting as it would be doing so in Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria.
The company will now focus on its core physical goods business and the Jumia Pay platform across Nigeria and 10 countries of its operations.
Speaking on the exit, Mr Francis Dufay, Chief Executive Officer of Jumia, said the focus will now go to its physical goods business as it targets boosting profitability.
“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 make 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,” he said.
The move will also see Jumia Food reduce its headcount as the company signed that some employees will transition to the core physical goods segment.
It has been a challenging environment for businesses in Nigeria amid surging inflation. For food businesses, Jumia Food has to compete with the likes of Glovo and Chowdeck.
In its Q3, the total value of food sold on Jumia Food stood at $64 million (11 per cent of $581 million) between January and September 2023, indicating that Jumia Food has struggled to achieve profitability since its inception.
Since its inception, Jumia Food experienced fluctuating fortunes, with a significant 82 per cent year-over-year growth in 2021, reflecting the company’s strong foothold in the food delivery segment.
However, in 2023, the company saw a marked decline in Quarterly Active Consumers and Orders. A consequence of its shift to drive profitability by focusing on viable categories and reducing consumer incentives.
This is coming months after Bolt Food, another significant player in the African food delivery market, announced its exit from Nigeria and South Africa in December 2023. Prior to that, Bolt Food had made several expansions this year.
The African food delivery market, expected to grow at a CAGR of 12.2 per cent from 2023 to 2028, reaching $1.7 billion, presents a landscape of both opportunities and challenges. While partnerships and technological integration offer growth avenues, the path to profitability remains complex.
