Jumia to end food delivery operations in all markets after December

Jumia, a pan-African e-commerce company, has stated that it will discontinue its food delivery service by the end of the year.

The service has proven to be unprofitable so far and it has decided to bring it to an end

The decision will have a ripple effect on all seven nations where the service is provided: Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast.

According to Jumia, food delivery is “a business with very challenging economics,” therefore the company decided to focus on the physical goods side of the business, with mobile phones being the most ordered item on the company’s website.

“The company determined that its food delivery business is not suitable to the current operating environment and macroeconomic conditions in its market, and will close its food delivery operations in all markets by the end of December 2023,” Jumia said in a statement.

“It’s a segment that’s very difficult across the world, with very challenging economics and big losses. It’s also a segment that is extremely competitive across the world and Africa,” CEO Francis Dufay said during an interview with Reuters.

“The economics are tough in this market because the costs are very high and there is plenty of competition so there is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers,” he added.

Jumia was the first African-focused internet startup to list on the New York Stock Exchange in 2019, some seven years after it was founded in Nigeria by two French entrepreneurs.