Jumia, a leading e-commerce platform in Africa, announced that it will close its food delivery in Nigeria by the end of 2023. The decision comes as the company aims to optimize its capital and resource allocation and continue its path to profitability.
According to the company, food delivery has not been profitable since its inception and represents approximately 11% of Jumia‘s Gross Merchandise Value (GMV) for the nine months ending September 30, 2023. The challenging unit economics and big losses in food delivery have been cited as reasons for the closure.
This news comes at a time when many Nigerian consumers are struggling financially. The economic downturn has hit the Nigeria Consumer Market hard, with companies like GSK, P&G, and Shoprite Kano making headlines for their recent closures.
As a result of these challenges, the Nigerian consumer market is facing a difficult time. Some have even suggested that the market is completely destroyed, with many citizens unable to afford basic goods and services.
The question arises in light of these developments: Should Jumia Food have stayed in Nigeria despite the economic difficulties? The company’s presence could have provided much-needed jobs and economic growth. However, given the current market conditions, others believe the decision to leave was inevitable.
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