One of Africa's top e-commerce companies, Jumia, has announced it is shutting down its food delivery service across the continent. Jumia Foods will halt operations in Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria by the end of this month.
Jumia is now looking towards focusing on its core physical goods business and the Jumia Pay platform across its 11 countries of operations.
Reacting to the recent decision, Chief Executive Officer of Jumia, Francis Dufay, said, "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 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,"
Like Jumia Foods, Bolt Foods had also announced its withdrawal from the Nigerian and South African Markets, highlighting the harsh realities of the African food delivery ecosystem.
"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," Chief Executive Officer Francis Dufay told Reuters.
As such, for industry experts, the news comes as no surprise as Jumia Food has recently witnessed a rollercoaster ride. After the company's growth increase in 2021, which saw 82% year-over-year growth, Jumia Foods faced a sharp decline in 2023, the decline which was attributed to a shift towards profitability and reduced consumer incentives.
Moving forward, Jumia has said several Jumia Foods employees will transition to its core e-commerce business while others could be laid off.