Pan-African e-commerce giant Jumia Technologies is pulling the plug on its Jumia Food delivery service, opting to double down on its core physical goods business and JumiaPay payment platform. The decision, effective December 31st, 2023, impacts all seven markets where Jumia currently operates: Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast.
Jumia’s statement cites a “strategic review” revealing the food delivery sector’s unsuitability for the current “operating environment and macroeconomic conditions” in these markets. The company emphasizes its commitment to optimizing resources and pursuing profitability, a path it believes incompatible with the “unprofitable since inception” food delivery business, representing 11% of its Gross Merchandise Value (GMV) as of September 2023.
“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,” stated Francis Dufay, CEO of Jumia. “We must leave a business line, which we believe does not offer the same upside potential – food delivery.”
Antoine Maillet-Mezeray, EVP of Finance & Operations, echoed this sentiment, highlighting the “very challenging economics” of food delivery globally and Jumia’s prioritization of “expected return on investment” in its core e-commerce business.
While some Jumia Food employees will be transitioned to the physical goods business, the company’s future lies squarely in strengthening its hold on the African online retail landscape. JumiaPay, its digital payments platform, is also expected to see increased focus as the company aims to solidify its role as a comprehensive e-commerce ecosystem.
Jumia’s exit from the food delivery scene marks a significant shift in the African e-commerce landscape, potentially prompting rival platforms to re-evaluate their own strategies in this competitive market. The success of Jumia’s renewed focus on physical goods and JumiaPay will be closely watched as the continent’s e-commerce scene continues to evolve.