Popular food delivery service, Jumia food will be shutting down operations by the end of the year in all operational countries in Africa.
Jumia Food which is a subsidiary of Jumia Technologies AG will cease to operate by December, 2023 in Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Algeria and Uganda.
The parent company, Jumia Technologies AG has been in business for about 11 years, dominating the African online marketplace as well as its online payment service Jumia Pay across 11 nations in Africa.
Though Jumia Food accounted for only 11% of Jumia’s Gross Merchandise Value in the first nine months of 2023, the company has had a tough time making profit since it was founded.
Between the month of January and September, 2023, the total value of food sold on Jumia Food was $64 million, or 11% of $581 million.
Though Jumia Food was functioning at this enormous size, it barely made any profit.
Since Jumia Food was launched, it had mixed results. However, in 2021 it showed a noteworthy 82% year-over-year growth, indicating that the company is well granded in the food delivery market.
Nevertheless, it witnessed a significant drop in Quarterly Active Customers and Orders in 2023 due to its change to concentrate on profitable areas and lower customer incentives to increase profitability.
The company has also noted that they will be moving some of its staff to the goods marketplace division, however they will be laying off some staff members as well.
Coincidentally, Bolt Food, another popular food delivery service has also announced that they will be closing services in Nigeria and South Africa in December, 2023.
Despite their efforts to make their way into major Nigerian cities like Lagos, the company’s demise is ascribed to economic downturns, high inflation, and fierce rivalry from established rivals like Jumia Food, Gokada, Uber Eats and Glovo.