AFRICA – In a bid to enhance profitability, pan-African e-commerce giant Jumia has announced the cessation of its food delivery service, Jumia Foods, in several key African markets.

The company will cease operations in Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria by the end of this month, redirecting its focus towards physical goods delivery and the expansion of its fintech platform, JumiaPay.

“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,” Francis Dufay, CEO of Jumia, stated emphasizing the decision’s rationale.

“The move aligns with the cost-cutting measures initiated by Dufay since February, including a 20% reduction in the workforce and relocating top management officers to operate from Africa instead of the UAE.”

Jumia’s shift comes at a time when the company aims to accelerate its path to profitability, targeting a significant reduction in Adjusted EBITDA loss from US$207 million in FY2022 to US$100-120 million in FY2023.

Despite facing a decline of one million active customers in the second quarter of this year, Jumia remains optimistic about its strategy to boost Gross Merchandise Volume (GMV) and drive sales.

As Jumia Foods exits the food delivery market, other players like Glovo and Chowdeck are capitalizing on the opportunity. Chowdeck recently surpassed US$1.2 million in Gross Merchandise Value and expanded its grocery chain partnerships.

Meanwhile, Glovo initiated a similar collaboration to cater to the growing demand for food delivery services.

Twiga Foods CEO takes leave of absence amid funding success, legal challenges

In a parallel development, CEO Peter Njonjo of Twiga Foods, a prominent e-commerce and food distribution company, has announced a six-month leave.

Njonjo cited the need to focus on personal matters after an intense 2023.

During his absence, Twiga’s Chief Operating Officer Laurent Gouault and Chief Financial Officer Zuber Momoniat will lead operational and commercial functions.

Twiga, founded in 2013, recently secured undisclosed funding in November, following a debt collection lawsuit from cloud services vendor Incentro Africa.

Njonjo clarified the company’s commitment to settling the debt and highlighted ongoing efforts to pay outstanding dues to suppliers.

Twiga Foods recently secured an undisclosed amount of funding in late November from existing investors, including Creadev, Juven, TLcom Capital Partners, and DOB Equity.

This funding injection came just weeks after the company faced a significant legal challenge—a US$261,878 (Ksh.40 million) debt collection lawsuit from cloud services vendor Incentro Africa.

In response to Incentro’s petition to liquidate the e-commerce venture, Njonjo obtained temporary orders blocking the liquidation plan, vehemently disputing the debt.

The company asserted that the statutory demand was made in bad faith and with ulterior motives, suggesting that the lawsuit was motivated by factors beyond the debt itself.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE