Following a strategic review of its food delivery business, Jumia concluded that the current market and broader macroeconomic environment are not conducive to sustaining the service. Consequently, the company will cease all food delivery operations in these markets by the end of December.
Jumia stated that this decision is aligned with its strategy of optimizing resource and capital allocation while working toward profitability. Notably, the food delivery segment, which has been unprofitable since its inception, contributed about 11% of Jumia’s Gross Merchandise Value (GMV) in the nine months ending September 30, 2023.
Francis Dufay, Jumia’s CEO, emphasized the potential for growth in the company’s physical goods business, stating, “The more we focus on our physical goods business, the more we realize there is significant potential for Jumia to grow and move toward profitability. We must make the right decision to fully dedicate our management, teams, and resources to pursue this opportunity. In the current context, that means exiting a business line we believe offers less upside potential—food delivery.”
Antoine Maillet-Mezeray, EVP of Finance & Operations at Jumia, added, “Food delivery remains a business with challenging economics, both in Africa and globally. We are choosing to prioritize our efforts on our physical goods e-commerce business in the eleven markets where we operate. This is about prioritizing opportunities and expected returns on investment.”
Jumia’s recent strategic pivot reflects its commitment to sustainable growth and a renewed focus on its core physical goods business across its eleven markets. In line with this transition, several employees currently working in the food delivery sector will be reassigned to the company’s ongoing physical goods operations in these countries.
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