Jumia, Africa's leading e-commerce platform, has announced a significant strategic decision to discontinue its food delivery service, Jumia Food, across seven key African markets by the close of December 2023. The countries affected by this closure include Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria. This move signals a deliberate shift in the company's focus, as it aims to reallocate resources and strengthen its core online retail operations and the expansion of its digital payment platform, Jumia Pay, across the 11 countries where it maintains an operational presence.

Francis Dufay, Jumia’s Chief Executive Officer, articulated the rationale behind this pivot, stating, “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.” Dufay emphasized the necessity of making the right decision to fully concentrate management, teams, and capital resources on this promising opportunity. Consequently, this involves exiting a business line, food delivery, which the company believes does not offer the same upside potential for sustainable growth and profitability.

Jumia Food, despite contributing 11% to Jumia's gross merchandise value (GMV) between January and September 2023, has consistently struggled with profitability since its inception. While the service experienced a substantial 82% year-over-year growth in 2021, the year 2023 witnessed a notable decline in quarterly active consumers and orders. This downturn ultimately compelled Jumia to critically reevaluate its operational priorities and the viability of its food delivery segment in the long term.

The closure of Jumia Food is an integral part of Jumia's broader aggressive cost-cutting strategy aimed at achieving overall profitability. This strategy also encompasses measures such as headcount reductions, discontinuing everyday grocery items, and scaling back delivery services that are not directly tied to its primary e-commerce business. As a direct consequence of Jumia Food's closure, several employees are expected to transition to the core retail segment, though this also signals potential layoffs within the company.

Jumia's strategic withdrawal from food delivery aligns with a broader trend observed within the African market. Notably, Bolt Food, another major player in the continent's food delivery sector, previously announced its exit from Nigeria and South Africa, citing challenging economic downturns, high inflation rates, and intense competition as primary factors. However, amidst these exits, other players are taking different approaches; Barcelona-based startup Glovo is actively deepening its presence in Sub-Saharan Africa through strategic partnerships with established restaurant chains, despite also grappling with its own profitability hurdles. In Nigeria, local player Chowdeck recently achieved a milestone, delivering over ₦‎1 billion ($1.2 million) worth of food in a single month, demonstrating growth in its niche.

The African food delivery market, projected to grow at a compound annual growth rate (CAGR) of 12.2% from 2023 to 2028, presents a complex landscape of both significant opportunities and persistent challenges. While technology integration and strategic partnerships offer avenues for growth, consistently achieving profitability remains an arduous task for many operators. Jumia Food’s exit, alongside others, indicates a dynamic and evolving industry. This recalibration by Jumia, recognized as the first tech startup with an emphasis on Africa to be listed on the New York Stock Exchange, underscores the changing dynamics of the African tech ecosystem and the continuous pursuit of sustainable growth. This pursuit for efficiency and focus also coincides with recent leadership changes, including the stepping down of Massimiliano Spalazzi as Jumia Nigeria CEO, who was subsequently replaced by Sunil Natraj.