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    Friday, December 15, 2023

    Jumia Food to Exit Nigeria by End of 2023

    Pan-African e-commerce giant Jumia Technologies will end the running of its food delivery arm this month in Nigeria and six other markets where it has footprints on the continent.

    Jumia will cease operations for its food delivery service, Jumia Food, in all of its operational countries, which include Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria by the end of December 2023.

    The company’s current priorities across its 11 operational nations are the Jumia Pay platform and its core physical goods business.

    Even though Jumia Food accounted 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. This indicates that between January and September of 2023, the total value of food sold on Jumia Food was $64 million, or 11% of $581 million. a measure of the enormous size at which Jumia Food was functioning, but it is not a measure of profits.

    Founded in 2012 in Lagos, Jumia attained unicorn status four years after when it became the first tech start-up on the continent to hit the $1 billion valuation mark and even surpass it. It would go on to be listed on the New York Stock Exchange (NYSE) in 2019, the first African-focused tech company to reach the milestone. An initial public offering conducted by the firm on NYSE in 2019 generated $196 million in net proceeds.

    “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,” CEO Francis Dufay said during an interview with Reuters.

    “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,” he added.

    The company has been paring down losses, the latest being in the third quarter during which it reduced losses by 67 per cent compared to a year ago.

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