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Rabat – African e-commerce company Jumia Technologies has announced the discontinuation of its food delivery business in all seven countries of operation by the end of this year.
The affected countries include Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Cote d’Ivoire.
The decision aligns with Jumia’s broader strategy to streamline operations and prioritize profitability, Reuters reported.
The company has been actively implementing cost-cutting measures, such as reducing headcount, exiting everyday grocery items, and trimming non-e-commerce-related delivery services.
Jumia Food, the food delivery segment of the company, accounts for approximately 11% of Jumia’s general merchandise value for the nine months ending September 30.
Despite its presence, the division has struggled to achieve profitability since its inception. CEO Francis Dufay acknowledged the challenges of the food delivery market, citing high costs, intense competition, and the difficulty in maintaining sustainable commissions amidst market pressures.
“The economics are tough in this market because the costs are very high and there is plenty of competition,” he told Reuters.
In addition, the decision comes as part of the company’s response to the current operating environment and macroeconomic conditions.
The move thus reflects Jumia’s dedication to optimizing their capital and resource allocation towards a path to profitability.
Employees previously dedicated to the food delivery business will transition to supporting Jumia’s core e-commerce operations in the affected countries.
Jumia, which was the first Africa-focused tech start-up to list on the New York Stock Exchange, said it is looking to consolidate its position in the rapidly evolving e-commerce landscape.
Founded in 2012, Jumia serves various African countries, providing a marketplace for online shopping and connecting buyers with sellersa cross the continent.
