Jumia Technologies is set to join the roster of companies departing Nigeria in 2023. The company has announced plans to exit its business operations not only in Nigeria but also in Kenya and six other African nations. Citing challenging economic conditions and intense competition in these markets, Jumia has made the decision to discontinue its food delivery services.
As of now, the company operates food delivery services in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast. Jumia aims to refocus its efforts on the expansion of its primary online retail business, prompting the decision to close its food delivery operations in these seven countries by the year’s end.
This move follows Jumia’s recent efforts to reduce its losses, as evidenced by a 67% decrease in losses for the third quarter compared to the previous year. However, the company’s active client base experienced a decline of one million during the second quarter of the 2023 financial year, now standing at 2.4 million customers, according to Softmation.world’s report.
Chief Executive Officer Francis Dufay told Reuters,
“It’s a very difficult segment worldwide, with very challenging economics and big losses. It’s also an extremely competitive segment across the world and Africa.”
“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.”
Jumia Technologies is set to join the roster of companies departing Nigeria in 2023. The company has announced plans to exit its business operations not only in Nigeria but also in Kenya and six other African nations. Citing challenging economic conditions and intense competition in these markets, Jumia has made the decision to discontinue its food delivery services.
As of now, the company operates food delivery services in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria, and Ivory Coast. Jumia aims to refocus its efforts on the expansion of its primary online retail business, prompting the decision to close its food delivery operations in these seven countries by the year’s end.
This move follows Jumia’s recent efforts to reduce its losses, as evidenced by a 67% decrease in losses for the third quarter compared to the previous year. However, the company’s active client base experienced a decline of one million during the second quarter of the 2023 financial year, now standing at 2.4 million customers, according to Softmation.world’s report.
As per the company’s statement, a significant portion of the existing staff currently employed in the food delivery division will transition to roles within the primary e-commerce operations in these respective nations.