Jumia to shut down food delivery business, focus on e-commerce
By Kingsley Odii
Jumia, the leading pan-African e-commerce platform, has announced its decision to close down its food delivery business, Jumia Food. The company conducted a strategic review and concluded that the food delivery sector is not suitable for the current operating environment and macroeconomic conditions in its markets. The closure of the food delivery operations is expected to be completed by the end of December 2023.
The move aligns with Jumia’s strategy to optimize capital and resource allocation while pursuing profitability. It is worth noting that the food delivery business accounted for approximately 11% of Jumia’s Gross Merchandise Value (GMV) for the nine months ended September 30, 2023. However, the segment has not been profitable since its inception.
“The more we focus on our physical goods business, the more we realize the huge potential for Jumia to grow and become profitable. In light of this, we have decided to fully focus our management, teams, and capital resources on our core e-commerce business, said Francis Dufay, Chief Executive Officer of Jumia.
Jumia plans to dedicate its efforts to the physical goods e-commerce business in the eleven markets where it operates, including Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast. As part of this transition, some employees who were previously involved in the food delivery business will be reassigned to support Jumia’s core operations.
Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia, explained, “Food delivery remains a business with very challenging economics, both in Africa and worldwide. Therefore, we want to prioritize opportunities with a higher expected return on investment and focus on the physical goods e-commerce business.”
By shutting down the food delivery segment, Jumia aims to reinforce its commitment to profitable growth and concentrate its resources on its core operations. The decision reflects the company’s dedication to providing the best e-commerce experience to customers in its 11 countries of operation.
Gross Merchandise Value (“GMV”) is a key indicator used by Jumia to measure the total value of orders for products and services. It includes shipping fees and value-added tax but does not consider discounts, vouchers, or cancellations/returns. Jumia believes GMV offers valuable insights into the platform’s usage, unaffected by shifts between first-party and third-party sales or payment methods.
RECOMMENDED ARTICLES
Comment
No comments found.