Jumia, the biggest online shopping mall in Africa has announced its plan to put an end to Jumia Food, it’s food delivery service in Nigeria.
The e-commerce giant also planned to exit from Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria, by the end of December 2023.
According to Techpoint, the company will now focus on its core physical goods business and the Jumia Pay platform across its 11 countries of operations.
Francis Dufay, the Chief Executive Officer of Jumia said; “The more we focus on our physical goods business, the more we realise 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”.
Despite constituting 11% of Jumia’s Gross Merchandise Value (GMV) in the first nine months of 2023, Jumia Food has struggled to achieve profitability since its inception.
This means the total value of food sold on Jumia Food stood at $64 million (11% of $581 million) between January and September 2023. An indicator of the massive scale Jumia Food was operating at, but it doesn’t necessarily amount to revenue or profitability.
Since its inception, Jumia Food experienced fluctuating fortunes, with a significant 82% year-over-year growth in 2021, reflecting the company’s strong foothold in the food delivery segment.
|Techpoint
