Jumia to cease food delivery services in Morocco

Nigerian e-commerce firm Jumia Technologies will shut down its food delivery business in Morocco by the end of 2023, it said on Wednesday.

In addition to the Kingdom, the firm will end its food delivery services in six other countries, namely Nigeria, Kenya, Uganda, Tunisia, Algeria and Ivory Coast, reports Reuters. The decision is meant to allow the African company to grow its online retail business.

Jumia’s «strategy to optimize its capital and resource allocation and to continue its path to profitability», it said. «It's a segment that's very difficult across the world, with very challenging economics and big losses. It's also a segment that is extremely competitive across the world and Africa», Chief Executive Officer Francis Dufay told Reuters, referring to Jumia Food.

The segment «represents 11% of the company’s general merchandise value for the nine months ended Sept. 30, and has not been profitable since its inception», Reuters explains.

«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 concluded.

Jumia is the first Africa-focused e-commerce company to be listed in the New York Stock Exchange. Jumia Maroc was founded in 2012.