Jumia Food, the food delivery service.
Jumia Food, the food delivery service from the online shopping company Jumia Technologies, has revealed its plan to stop operating in Nigeria by the end of December.
According to Reuters, Jumia stated that it will close its food delivery services not only in Nigeria but also in six other countries where it currently operates. The decision is part of the company’s strategy to focus more on expanding its primary online retail business.
In its third-quarter report, Jumia Technologies disclosed a 67% reduction in losses compared to the previous year, with further decreases anticipated. The company attributes this decline in losses to various cost-cutting efforts aimed at achieving profitability.
These cost-cutting measures involve reducing staff numbers, exiting everyday grocery offerings, and trimming down delivery services unrelated to its main e-commerce operations. The decision to close Jumia Food aligns with these efforts.
The statement disclosed that the decision aligns with Jumia’s, “strategy to optimise its capital and resource allocation and to continue its path to profitability.”
Jumia Food accounts for approximately 11% of Jumia’s overall merchandise value during the nine months ending on September 30. However, it has not generated profits since its establishment.
“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,” Chief Executive Officer Francis Dufay said.
Jumia Food is presently operational in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast.
The company stated that some of its employees currently engaged in the food delivery sector will transition to the primary e-commerce business in these countries.
This move follows the recent announcement of the exit of Bolt Food, the food delivery service by the popular ride-hailing company, Bolt, after just two years of operation.