Jumia to shut down food delivery service in Nigeria

The e-commerce company Jumia Technologies' food delivery service, Jumia Food, has declared that it will be closing its doors in Nigeria this December.

By the end of the year, Jumia plans to shut down its food delivery services in Nigeria and the other six nations where it conducts business, Reuters reports, in order to concentrate on expanding its main online retail business.

Jumia Technologies reported a 67% decrease in losses from a year ago in its third-quarter results, though a decline is still anticipated. It attributed the decline in losses to cost-cutting measures, which it is actively pursuing to become profitable. 

products, and cutting back on delivery services unrelated to its online store. In a similar vein, the decision to close Jumia Foods is currently perceived.

The choice is consistent with Jumia's "strategy to optimise its capital and resource allocation and to continue its path to profitability," according to a statement.

Jumia Food has not turned a profit since its founding and accounts for just 11% of Jumia's total merchandise value for the nine months that ended on September 30.

“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. 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,” Chief Executive Officer Francis Dufay said.

At the moment, Jumia Food is active in Ivory Coast, Nigeria, Kenya, Uganda, Morocco, Tunisia, and Algeria.

According to the company, a portion of its workforce that is presently involved in food delivery will move to these countries' main e-commerce operations.

This came after Bolt Food, the well-known ride-hailing company Bolt's food delivery service, announced its closure this month after just two years of business.

Bolt stated that it made the decision to stick with its larger strategy of concentrating on its more lucrative segments after assessing its performance. It subsequently announced that it would also close down operations in South Africa, although initially stating that it was only leaving Nigeria.

Source