Jumia Food, a prominent player in the African food delivery market, has unexpectedly exited Nigeria and other African markets, leaving a significant void in the thriving industry. The move has sparked discussions about the trajectory of the sector and the challenges faced by major players.
The CEO of Jumia, Francis Dufay, cited a strategic focus on the company’s core physical goods business and the Jumia Pay platform as the primary reasons behind this departure. Despite contributing 11% to the company’s Gross Merchandise Value, Jumia Food struggled to achieve profitability, ultimately influencing the decision to close this segment.
Observers noted that Jumia Food’s closure follows a broader trend in the industry, with Bolt Food also recently announcing its exit from Nigeria and South Africa. The challenging realities of the African food delivery landscape include economic downturns, high inflation, and intense competition from established rivals like Uber Eats and Gokada.
CEO Francis Dufay acknowledged the tough economics of the food delivery market, with high costs and intense competition putting pressure on commissions and marketing expenses. Despite generating substantial monthly revenue, Jumia Food, like other global players, faced difficulties in achieving profitability.
Amidst these challenges, some players are thriving. Barcelona-based Glovo is making strides in Sub-Saharan Africa through strategic partnerships with restaurant chains. In Nigeria, startup Chowdeck celebrated delivering over ₦1 billion worth of food in a single month, showcasing success in a challenging market.
While Jumia Food’s exit raises questions about the sustainability of the food delivery business, the potential for growth remains significant. Africa’s food delivery market is projected to reach $1.7 billion by 2028. Overcoming obstacles will require strategic partnerships, technological innovations, and capital-efficient models. The success of startups like Chowdeck exemplifies that, despite the hurdles, opportunities for growth in the African food delivery market are within reach.