Infostride News Reports: Jumia Food, the food delivery arm of e-commerce giant Jumia Technologies, has unveiled plans to cease operations in Nigeria and six other countries by the end of December, as part of a strategic shift to concentrate on bolstering its core online retail business.
This decision was revealed in the wake of Jumia Technologies’ third-quarter results, where the company reported a noteworthy 67 percent reduction in losses compared to the previous year. The reduction was attributed to aggressive cost-saving initiatives aimed at steering the company toward profitability.
In an official statement, Jumia emphasized that the move aligns with its overarching strategy to optimize capital and resource allocation, ultimately fostering a trajectory towards sustained profitability. Jumia Food, which currently constitutes approximately 11 percent of Jumia’s general merchandise value for the nine months ending September 30, has been grappling with profitability challenges since its inception.

The decision to shutter Jumia Food is part of a broader cost-cutting strategy, which has already involved measures such as workforce reductions, exiting everyday grocery items, and scaling back delivery services unrelated to the core e-commerce operations. Francis Dufay, the Chief Executive Officer of Jumia Technologies, acknowledged the inherent difficulties in the food delivery segment, citing intense global competition and challenging economics as contributing factors.
Dufay commented, “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. 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.”
Jumia Food is presently operational in seven countries, including Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast. The closure of Jumia Food is expected to lead to a reallocation of some employees to Jumia’s core e-commerce business in these nations. This strategic move follows closely on the heels of Bolt Food, the food delivery service of the popular ride-hailing company Bolt, announcing its exit after just two years in operation.
Bolt attributed its decision to exit the food delivery market to a comprehensive evaluation of performance, aligning with its broader strategy to concentrate on more profitable segments. Initially announcing an exit from Nigeria, Bolt later confirmed the closure of its operations in South Africa as well, underscoring the broader challenges faced by companies in the competitive and economically demanding food delivery sector.
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