Jumia, a big online shopping company in Africa, is shutting down its food delivery service called Jumia Food in seven countries by the end of December 2023. These countries include Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria.
The company wants to focus more on its main online shopping business and make its payment platform, Jumia Pay, better in the 11 countries where it operates.
Jumia’s CEO, Francis Dufay, said they see a lot of chances to grow and make money by concentrating on selling physical goods online.
Jumia Food has had problems making money despite bringing in 11% of Jumia’s sales from January to September 2023. Even though it grew a lot in 2021, it faced a drop in customers and orders in 2023, so Jumia decided to close it.
To become profitable, Jumia is cutting costs by reducing its workforce, stopping selling everyday grocery things, and cutting down on delivery services not related to its main online shop. This closure might mean some employees will move to other parts of the company, but it could also lead to job losses.
Other companies like Bolt Food are also leaving some African countries because of economic problems and tough competition.
But there are still companies like Glovo and Chowdeck trying hard in the food delivery business. Glovo is teaming up with popular restaurants, while Chowdeck recently hit a milestone by delivering a lot of food in Nigeria.
The food delivery business in Africa is growing but facing challenges in making profits. Even though there are closures, new companies entering show that the industry is changing.
Jumia’s choice to focus on making money shows how the tech industry in Africa is changing, even though they were the first African tech company listed on the New York Stock Exchange.
Recently, the CEO of Jumia Nigeria stepped down after guiding the company through tough times during the pandemic.
