Jumia’s food delivery services, Jumia Food, will cease operations in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast by 31 December 2023.
The Chief Executive Officer of Jumia, Francis Dufay said the current market conditions and economic climate in the affected countries make the food delivery business unprofitable.
“The economics are tough in this market because the costs are very high and there is plenty of competition so there is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers,” Dufay explained.
The decision, therefore, is Jumia’s “strategy to optimise its capital and resource allocation and to continue its path to profitability.”
To avoid mass unemployment, the company said its Jumia Food employees would be given positions in the e-commerce segment, which makes huge profits for the company.
“The more we concentrate on our physical goods business, the more we recognise the substantial opportunities for Jumia to flourish and achieve profitability,” said Dufay.
“Hence, we must make the right decision by directing our management, teams, and capital resources towards seizing this opportunity.”
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