daniel chigunweJumia currently runs its food delivery services in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast.
This strategic decision is part of Jumia’s efforts to concentrate on the expansion of its core online retail business, Reuters reported.
To achieve profitability, Jumia is actively implementing cost-cutting measures, such as reducing its workforce, exiting the everyday grocery segment, and scaling back delivery services unrelated to its e-commerce operations.
The move is in line with Jumia’s “strategy to optimize its capital and resource allocation and to continue its path to profitability,” the retailer said, adding the current operating environment and macroeconomic conditions are not conducive for the sustainability of Jumia Food.
The food delivery segment contributes about 11 percent to Jumia’s general merchandise value for the nine months ended September 30, 2023.
Notably, Jumia Food has faced challenges in attaining profitability since its inception, prompting the company to reassess its portfolio and prioritise areas with stronger growth potential and a clearer path to financial sustainability.
The Chief Executive Officer, Francis Dufay, told Reuters that the segment is universally challenging, characterised by difficult economics and significant financial losses. What he said: “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,” -Business Insider Africa
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