2023-12-13 21:30:00
African e-commerce company Jumia Technologies will close its food delivery business in the seven countries where it operates by the end of the year in order to focus on growing its core online retail business, a she declared on Wednesday.
Jumia is aggressively cutting costs to become profitable, including reducing headcount, abandoning everyday groceries and reducing delivery services that are not related to its e-commerce business.
The move is in line with Jumia’s “strategy to optimize the allocation of its capital and resources and continue its path to profitability”, the retailer said, adding that Jumia Food was not suited to the current operating environment and macroeconomic conditions.
Jumia Food represents about 11% of Jumia’s general merchandise value for the nine months ending September 30, and has not been profitable since its inception.
“It’s a segment that is very difficult around the world, with very difficult economic conditions and significant losses. It’s also an extremely competitive segment around the world and in Africa,” chief executive Francis told Archyde.com. Dufay.
“The economics are tough in this market because the costs are very high and there is a lot of competition. So there is downward pressure on the commissions we make and upward pressure on costs marketing because everyone is fighting for customers.
Jumia currently operates its food delivery business in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria and Ivory Coast.
Africa’s first tech startup listed on the New York Stock Exchange said a number of employees currently dedicated to food delivery will transition to the core e-commerce business in these countries.
Jumia has reduced its losses, with the latest figures showing it reduced its third quarter losses by 67% compared to the previous year. (Reporting by Nqobile Dludla; Writing by Bill Berkrot)
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