Jumia Ends Food Delivery Operations In Kenya, 6 Other Countries Amidst Stiff Competition

• Jumia will close food delivery operations in seven African countries by the end of 2023
• The company announced that a number of employees in the food delivery business will transition to the continuing physical goods business
• Jumia said the move was part of its strategic plan to focus on its core business in the physical goods division

Elijah Ntongai, a journalist at TUKO.co.ke, leverages more than three years of expertise in financial, business, and technology research, providing profound insights into both Kenyan and global economic trends.

Jumia Technologies has announced that it is set to shut down its food delivery operations across seven African countries, including Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast, by the end of 2023.

Will Jumia employees lose their jobs?

Although the company did not give assurance to all employees working in the food delivery unit, the company announced plans to shift some employees from the food delivery arm to its existing physical goods business in these nations.

"A number of employees currently dedicated to the food delivery business will transition to the continuing physical goods business in these countries," read the press release in part. Why Jumia is closing food delivery unit

Why is Jumia closing the food delivery unit?

According to the press release, this strategic move aligns with Jumia's focus on strengthening its core e-commerce and Jumia Pay operations, emphasising the potential growth in their physical goods division, according to Francis Dufay, CEO of Jumia.

“The more we focus on our physical goods business, the more we realise that there is huge potential for Jumia to grow, with a path to profitability. We must take the right decision and fully focus our management, our teams and our capital resources to go after this opportunity. In the current context, it means leaving a business line, which we believe does not offer the same upside potential – food delivery," said Dufay.

Echoing the sentiments of Dufay, Antoine Maillet-Mezeray, EVP of Finance and Operations of Jumia, pointed out the challenging economics of the food delivery industry both in Africa and globally.

“Food delivery remains a business with very challenging economics in Africa and across the world, and we want to focus our efforts on our physical goods e-commerce business in the eleven markets where we operate. This is a matter of prioritisation of opportunities and expected return on investment,” he said.

Competition in the food delivery market

In other related news, TUKO.co.ke reported the changing customer behaviour among Kenyans ordering food online, as shown in the Glovo Delivered 2023 report.

According to the Glovo report, the consumption of various foods recorded significant growth, mainly traditional Kenyan foods, which ranked third and experienced the highest growth in orders (+50%) in 2023 compared to 2022, followed by Asian, +49%, and Indian cuisines at +45%.

Traditional Kenyan dishes, including chapati, ugali, and samosa, were top-ordered local foods in Kenya as orders for chapati, ugali, and samosa rose by 50% in 2023 compared to 2022.