JUMIA closes down food business across all operating countries

The Year 2023 has been filled with a bunch of layoffs and shutdowns across several industries in Nigeria and outside. 

Even as the year wraps up in a few weeks, Jumia, a global e-commerce company, has reportedly decided to shut down its food business across all operation countries, including Nigeria, Uganda, Morocco, Kenya, Tunisia, Ivory Coast, and Algeria. Earlier this year, the African e-commerce firm had laid off 900 employees, 20% of its workforce, due to an unimpressive 2022 Q2 financial report. 

Now that Jumia Food has to go, this means that another set of employees has to be laid off, particularly, the ones who have worked in the division. The company said it is shifting its attention to its primary business of physical goods and the utilization of the Jumia Pay platform in the 11 countries where it operates.

The company shared that although Jumia Food contributed 11% to Jumia's Gross Merchandise Value (GMV) in the initial nine months of 2023, it has faced challenges in attaining profitability since its establishment.

"The more we focus on our physical goods business, the more we realize that there is huge potential for Jumia to grow, with a path to profitability. We must make 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." said Francis Dufay, CEO of Jumia. 

According to the revenue report shared by the company, Jumia Foods has not precisely maintained consistent performance, although they did exhibit a notable 82% year-over-year growth in 2021, indicating the company's solid position in the food delivery sector. But, fast forward to 2023, the number of active customers grossly declined, leading to this decision made by the company. 

While Jumia has grappled with retaining its customers and generating sales, the opposite trend is evident with Chowdeck as the Nigerian food delivery company recently marked a significant milestone by delivering food valued at over ₦1 billion ($1.2 million) in just a month. 

Bolt Food recently left Nigeria and now Jumia Food has followed suit, this may mean even more business for Chowdeck, Glovo, Uber Eats, and other food enterprises if they continue to stay at the top of their game and are not swayed by the economic downturns as this has recently been the major challenge. 

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