Popular African e-commerce giant, Jumia, has announced its plans to shut down its food delivery business by the end of the year. This strategic decision is part of Jumia's efforts to enable profitability, and also to concentrate on the expansion of its core online retail business.
Jumia currently runs its food delivery services in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast disclosed that it 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 e-commerce giant added that several employees who are currently focused on the food delivery segment will shift to the core e-commerce business in these countries.
According to Francis Dufay, Chief Executive Officer, the food delivery segment is universally challenging, characterized by difficult economics and significant financial losses. He added that the segment is "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,"
"The economics are tough in this market because the costs are very high and there is plenty of competition so there is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers."
