In a surprising turn of events, Jumia, one of Africa’s leading e-commerce platforms, recently announced that it will shut down food delivery operations in Nigeria alongside six African countries. This decision, which has sparked discussions across the business and tech communities,
A Closer Look at the Decision to Shut Down Food Delivery Operations in Nigeria. Jumia, often referred to as the “Amazon of Africa,” has been a major player in the e-commerce landscape on the continent. With a presence in multiple African countries, the company has diversified its services over the years, including ventures into the food delivery sector.
Over the past months, the company’s food delivery services have experienced an exponential decline in profit, hence prompting the need to cease its operation indefinitely. Though the company sought to capitalize on the increasing demand for online food ordering, Several factors contributed to its decision to close its food delivery operations in Nigeria and 6 other African countries . Jumia Food represents about 11 percent of Jumia’s general merchandise value and has not been profitable since its inception.
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_ Intense competition and the presence of established local food vendors have also made it challenging for Jumia to gain a significant market share.
The logistics and operational complexities of food delivery, including ensuring the freshness of food and timely deliveries posed challenges for the company to meet the demand of their consumer base..
Jumia Food currently operates in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria and Ivory Coast. The company is realigning its focus on core e-commerce operations and other high-potential markets.
As reported by reuter, it was revealed that the decision to shut down operations in Nigeria is in line with Jumia’s “strategy to optimize its capital and reallocate resources and investments into areas with higher growth potential, such as e-commerce or fintech services.
The shutdown inevitably raises questions about the fate of employees associated with the food delivery segment. Industry experts and stakeholders are likely to share their insights and speculations on the implications of Jumia’s decision.
Some see it as a prudent move to streamline operations, while others might view it as a sign of the challenges within the African food delivery market.
Disclaimer: This blog post is based on available information and industry analysis as of the date of writing. Further developments may have occurred since then.