E-commerce company, Jumia Technologies, has announced a shutdown of its food delivery operations effective end of this month.
This is in all the seven countries where the unit is active.
The firm said the decision is part of its broader strategy to enhance its focus on expanding its core online retail business and achieving profitability.
In a statement announcing the closure, Jumia said it is implementing cost-cutting measures, including reducing the workforce, exiting everyday grocery offerings and scaling back non-e-commerce-related delivery services.
The company emphasized that the move aligns with its overall strategy to optimise capital and resource allocation, facilitating its ongoing journey towards profitability.
“Following a strategic review of Jumia Food, the company determined that its food delivery business is not suitable to the current operating environment and macroeconomic conditions and will close its operations in all markets by the end of December 2023,” read the statement.
According to Jumia, the current operational environment and macroeconomic conditions make Jumia Food incompatible, prompting the decision to streamline its business operations.
Jumia Food represents about 11 per cent of Jumia's general merchandise value (GMV) for the nine months ended September 30, and has not been profitable since its inception.
GMV refers to the total value of orders for products and services, including shipping fees, tax, and before deductions of any discounts or vouchers, irrespective of cancellations or returns for the relevant period.
Jumia currently operates its food delivery business in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria and Ivory Coast
The first Africa-focused tech start-up to list on the New York Stock Exchange, the company said several employees currently dedicated to the food delivery business will transition to the core e-commerce business in these countries.
Jumia has been trimming its losses, with the latest figures showing that it reduced its third-quarter losses by 67 per cent from a year earlier.
