E-commerce firm Jumia Technologies has announced plans to close down its food delivery unit in Nigeria and six other countries by the end of 2023.
The company, whose food unit currently operates in Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria, plans to focus on growing its core online retail business.
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According to Jumia, the move is aimed at strategising to optimise its capital and resource allocation and to continue its path to profitability, adding that Jumia Food is not suitable to the current operating environment and macroeconomic conditions.
Jumia Food, which represents about 11 per cent of Jumia’s general merchandise value for the nine months ending September 30, has been unprofitable for the company since its inception.
The company’s CEO, Francis Dufay, confirmed this on Wednesday to Reuters.
“The more we concentrate on our physical goods business, the more we recognise the substantial opportunities for Jumia to flourish and achieve profitability,” said Mr Dufay. “Hence, we must make the right decision by directing our management, teams, and capital resources towards seizing this opportunity.”
He added, “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.”
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