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Jumia Technologies AG (NYSE:JMIA) ("Jumia" or the "Company"), the leading pan-African e-commerce platform, has announced plans to close its food delivery business, Jumia Food. Jumia will continue to operate its core physical goods business and its JumiaPay business in all of its countries of operation.
Following a strategic review of Jumia Food, the Company determined that its food delivery business is not suitable to the current operating environment and macroeconomic conditions in its market, and will close its food delivery operations in all markets by the end of December 2023. This decision is in line with the Company's strategy to optimize its capital and resource allocation and to continue its path to profitability. The food delivery business represents approximately 11% of Jumia's GMV for the nine months ended September 30, 2023 and has not been profitable since inception of the business.
"The more we focus on our physical goods business, the more we realize that there is huge potential for Jumia to grow, with a path to profitability. We must take the right decision and fully focus our management, our teams and our capital resources to go after this opportunity. In the current context, it means leaving a business line, which we believe does not offer the same upside potential - food delivery," said Francis Dufay, Chief Executive Officer of Jumia.
"Food delivery remains a business with very challenging economics, in Africa and across the world, and we want to focus our efforts on our physical goods e-commerce business, in the eleven markets where we operate. This is a matter of prioritization of opportunities, and expected return on investment," said Antoine Maillet-Mezeray, EVP Finance & Operations of Jumia.
Jumia currently operates its food delivery business in Nigeria, Kenya, Uganda, Morocco, Tunisia, Algeria and Ivory Coast. A number of employees currently dedicated to the food delivery business will transition to the continuing physical goods business in these countries.
This strategic shift demonstrates Jumia's strategic commitment to profitable growth and dedication to its core physical goods business in its 11 countries of operation.
Gross Merchandise Value ("GMV") corresponds to the total value of orders for products and services, including shipping fees, value added tax, and before deductions of any discounts or vouchers, irrespective of cancellations or returns for the relevant period. The Company believes that GMV is a useful indicator for the usage of our platform that is not influenced by shifts in our sales between first-party and third-party sales or the method of payment. The Company uses GMV as one of many indicators to monitor usage of our platform.
Posted In: JMIA
