African e-commerce platform Jumia has opted to discontinue its food delivery service, Jumia Food, in Algeria, Ivory Coast, Kenya, Morocco, Nigeria, Tunisia, and Uganda, as reported by Tech Crunch.
After conducting a strategic review, Jumia determined that the business is not in harmony with its existing operational landscape and the prevailing macroeconomic conditions in its markets.
The company will discontinue its food delivery services across these markets by the end of this month.
The decision is part of the company’s plan to optimize capital and resource allocation to achieve profitability.
Since early 2022, the company has been actively working to reduce its costs. It halted food delivery services in Egypt, Ghana, and Senegal, and discontinued logistics-as-a-service in all markets except Nigeria, Morocco, and Ivory Coast.
The company implemented a cost-cutting measure by discontinuing Jumia Prime across all markets.
Although the company managed to decrease its losses, the food delivery segment has never attained profitability.
Tech Crunch quoted Jumia CEO Francis Dufay as stating, “The more we focus on our physical goods business, the more we realise 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.”
The company will shift its focus to its physical goods delivery business and sustain its JumiaPay operations across all markets.
Antoine Maillet-Mezeray, Jumia’s Executive Vice President of Finance and Operations, stated that the choice to exit the food delivery sector was based on prioritizing opportunities and anticipating a return on investment.
Employees currently working in the food delivery services will be transitioned to roles within the ongoing physical goods business.
Last month, Bolt Food announced its strategic exit from the Nigerian market for specific reasons.
