Jumia Food Withdraws from Nigeria and Other African Markets Due to Profitability Concerns

Jumia
Jumia Food Withdraws from Nigeria and Other African Markets Due to Profitability Concerns

Jumia, the prominent e-commerce platform in Africa, has sent shockwaves through the region’s online retail sector by announcing the closure of its food delivery service, Jumia Food, by the end of December 2023. This unexpected move raises questions about the future of the African food delivery market and the challenges faced by major industry players.

Jumia CEO Francis Dufay attributes the decision to a strategic focus on the company’s core physical goods business and Jumia Pay platform. Despite Jumia Food contributing 11% to the company’s Gross Merchandise Value, its ongoing struggle for profitability became a decisive factor.

Read Also: Jumia Unveils New Service Features

Dufay explained, “As we concentrate more on our physical goods business, we see significant opportunities for Jumia to thrive and achieve profitability. Therefore, we must make the right decision by directing our management, teams, and capital resources towards seizing this opportunity.”

The announcement does not come as a surprise to industry observers who witnessed Jumia Food’s fluctuating trajectory. After experiencing remarkable growth with an 82% year-over-year increase in 2021, the company faced a significant decline in 2023 due to a strategic shift towards profitability and reduced consumer incentives.

Read Also: Managing Your own Food cravings By way of Food cravings Suppressants

Jumia Food’s withdrawal is part of a broader trend, with another major player, Bolt Food, also announcing its exit from Nigeria and South Africa. This move underscores the harsh realities of the African food delivery landscape, marked by economic downturns, high inflation, and intense competition from established rivals such as Uber Eats and Gokada.

CEO Francis Dufay acknowledged that it is 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.

Read Also: Endeavor and FMO Join Forces for African Agritech Accelerator in January 2024

 

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