Jumia to expand food delivery services, plans to venture into Egyptian market

EGYPT – Jumia, Africa focused ecommerce company is planning to introduce its food delivery service in Egypt during the first quarter.

The move will make Egypt the tenth market where the ecommerce giant will be offering its restaurant delivery services, joining Nigeria, Côte d’Ivoire, Kenya, Morocco, Tunisia, Ghana, Uganda, Algeria and Senegal with exemption of South Africa.

It’s a strategic time for Jumia Food’s to set base in Egypt following the cessation of Uber Eats services in the North African country in May last year.

However, it will face competition to win over consumers and restaurant operators from similar offerings in the market, which include the Talabat and Elmenus platforms.

“We believe the market has a huge potential and is still at its early stage,” Hesham Safwat, Jumia’s chief executive for the Egyptian market, referencing demand for restaurant and food delivery in the North African country.

According to Co-founder of Jumia Sacha Poignonnec, food makes up 20% of overall transactions on the platform and is growing quickly making it an important segment of the company.

Egypt will be Jumia’s tenth market for food delivery services

Despite restaurants in markets like Morocco closing early at times due to lockdowns, the New York-listed company still completed five million online food orders in 2020.

The e-commerce giant announced that its cost cuts helped it reduce fourth quarter losses by 47% from a year ago, as revenues continue to slide, showing that its path to profitability was on course.

Revenue slid to 41.8 million euros during the period under review, down from 49.3 million euros. But Jumia reduced its adjusted loss in earnings before interest, taxes, depreciation and amortization (EBITDA) to 28.3 million euros.

For the full year, revenue slid nearly 13%, to 139.6 million euros and adjusted loss EBITDA fell by 34.5% to 149.2 million euros.

Jumia outlined long-term hopes of expanding into new markets, including Ethiopia, the Democratic Republic of Congo and Angola, and said that payment platform JumiaPay and Jumia Logistics could be spun off.

In December 2019, Jumia suspended its Food delivery service in Rwanda after six years of operations.

The development made Rwanda the third country in Africa that the platform is ceased operations after it closed shop in Tanzania and Cameroon.

Africa still warming up to ecommerce

Demand for delivered meals and groceries has exploded worldwide as restrictions to contain the coronavirus kept people indoors.

The trend has been slower to take off in Africa compared to other markets, where internet connections remain sluggish and unaffordable for large parts of the population.

According to UNCTAD’s 2020 Business-to-Consumer (B2C) e-commerce Index report, Kenya emerged as the leading country in the East African region with readiness to engage in online commerce, jumping one position from 89th position in 2019 to 88th position in 2020.

The index ranks 152 countries on their adoption of ecommerce with countries scored based on access to secure internet servers, reliability of postal services and infrastructure, portion of their population that uses the internet and link to financial institution or a provider of mobile money services.

Rwanda also improved in its ranking to 124th position from previous year’s 127.

Tanzania on the other hand tripped from the 99th position to 110th position while Uganda slipped eight places from the 104th position in the world in 2019 to 112th position in the 2020 index.

Burundi fell from 149th to 150th position, emerging third from the bottom.

Europe remains by far the most prepared region for e-commerce with Switzerland taking the lead, followed by Netherlands and Denmark.

The only non-European economies among the top 10 are Singapore, which ranked fourth, and Hong Kong (China) in the 10th position.

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