Amid the lingering harsh economic difficulties in Nigeria and other African countries, popular online retail merchants, Jumia will cease operations for its food delivery service, Jumia Food, by the end of December 2023.
Other operational countries to be affected include Kenya, Morocco, Ivory Coast, Tunisia, Uganda and Algeria, the Punch reports.
Data shows that despite Jumia Food accounting for 11% of Jumia’s Gross Merchandise Value in the first nine months of 2023, the company has had difficulty turning a profit since its founding. From January to September 2023,the total value of food sold on Jumia Food was $64 million, or eleven percent of $581 million, a measure of the enormous size at which Jumia Food operates, it is however not a measure of profits.
The report further shows that Jumia Food has had mixed results since its inception. In 2021, it showed a noteworthy 82% year-over-year growth, indicating the company’s solid position in the meal delivery market. Nevertheless, the business recorded a significant drop in Quarterly Active Customers and Orders in 2023, forcing the firm to concentrate on profitable areas and lower customer incentives to increase profitability.
The company’s current priorities across its eleven operational nations are the Jumia Pay platform and its core physical goods business.
As for Jumia Food staff, the organization says that many will move to the main physical goods division, implying that some may face layoffs.
Jumia Food joins Bolt Food, a major player in the African food delivery business, who had earlier announced its departure from South Africa and Nigeria in December 2023, citing economic downturns, high inflation and fierce rivalry from other established outfits like Jumia Food, Gokada and Uber Eats.
The planned exit of Jumia Food has swollen the ranks of businesses exiting Nigeria in 2023 alone, a result of the harsh economic realities facing the nation. Experts say, “these does not augur well for the already beleaguered economy.”