Jumia’s food delivery service was a pace setter in Africa, and frankly, by all standards, it was destined for great things. However, that dream came crashing down just eleven years later. So what happened?
Article Brief & Key Nuggets
- Jumia Food Delivery launched in over 13 African countries but shut down everything by the end of 2023, primarily because of a poor logistics model.
- Unfavourable economic realities. The business lost money on every order due to poor unit economics and logistics gaps. Fuel prices, traffic congestion, and heavy competition worsened already-thin margins.
- Chowdeck and Glovo succeeded where Jumia Food failed by being flexible and focusing on profit per delivery.
- The real lesson for African food delivery operations: scale only works when supported by margin discipline and local execution.
When it first launched in 2012, Jumia’s food delivery service looked like a winning idea. And for good reason. It had scale, leveraged technology, and there was sufficient capital to throw around. However, by December 2023, the entire service disappeared from every African market.
Shutting down operations across 13 major markets sent shockwaves around the business world, but it was only a matter of time. And it was not because demand disappeared. The business model just never worked.
This article will unpack what happened and what every logistics operator, startup founder, and supply chain leader across Africa can learn from it.
Jumia’s Food Delivery: A Fast Climb with a Heavy Load
When Jumia launched its food delivery service (then called HelloFood) in Lagos in 2012, it moved fast. In just two years, it was in over 10 countries—Nigeria, Kenya, Morocco, Egypt, Ghana, Ivory Coast, and more.
The expansion drew attention from Europe’s top tech entrepreneurs and experts in 2014.
Operating under an already established household brand meant demand was great from the onset, and orders flooded in rapidly. Users got excited, and restaurants recognizing the opportunity to make more sales even from remote areas joined the platform.
By 2021, food orders were growing 82% year-over-year. By Q3 2022, food delivery was the fastest-growing category on Jumia and the second-largest by volume after fashion. Food orders in Q3 2022 were up 38% year-over-year.
At one point, one out of every five orders on Jumia’s platform was food. On paper, Jumia Food Delivery should have worked. It had:
- Access to Jumia’s logistics and warehousing infrastructure
- A popular platform shared with Jumia’s main e-commerce business
- Deep funding from Rocket Internet, MTN, and other major investors
And yet, it failed.
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Why Jumia’s Food Delivery Service Was Shut Down
By 2014, Jumia’s food delivery service was operational in thirteen major African economies. By early 2023, only seven of those were still operational. In December 2023, all operations across Africa were shut down. So what happened?
1. The Numbers Never Worked
Francis Dufay, Jumia’s CEO, later admitted that “Jumia Food has not been profitable since its inception.” That’s a full decade of losses.
Each food order came with rider costs, vendor delays, and logistics challenges such as infrastructure and insecurity. Most meals cost $5 to $10. Delivery costs often matched that. However, even when Jumia charged a commission, the platform lost money per transaction.
The problem wasn’t demand. It was unit economics. No matter how many orders Jumia handled, it bled money. For example, delivering a ₦4,000 ($3.50) meal in Lagos could cost Jumia ₦4,500 in rider time, fuel, and customer support. That’s before discounts or promo codes.
2. Last-Mile Logistics Were Broken
Food isn’t like shoes or phones. It goes bad, and the shelf life isn’t that great. Yet, in many African cities where Jumia’s food delivery service was in operation, road infrastructure, congestion, and distance made on-time delivery a guessing game.
In cities like Nairobi and Lagos, riders faced unpredictable delays. Couriers showed up late or not at all. Customers complained, and restaurants pulled out because orders would come in, they would package the meal, and no one would pick it up. The loss was piling up.
Jumia’s logistics setup, which was designed for parcel delivery, didn’t adapt well to on-demand food. It needed short-haul routing, route clustering, and high-density delivery zones. Jumia didn’t have these.
3. Competition Was Ruthless
By 2021, Jumia Food faced heat from all sides:
- Glovo in Africa: Backed by $1B in capital, Glovo flooded Nigeria, Kenya, and Morocco with free delivery and 30% discounts.
- Chowdeck: A lean Nigerian startup that figured out how to turn a profit on every delivery.
- Bolt Food, Uber Eats: Backed by ride-hailing infrastructure, these firms added delivery with better dispatch systems.
Chowdeck, in particular, proved a point. It didn’t offer the lowest price. But it delivered meals faster, paid riders better, and got the unit economics right.
“We don’t subsidize orders,” said Chowdeck’s founder. “We’re profitable per delivery. That’s the only way to survive in Nigeria.”
Jumia Food was caught between massive funding and local discipline. The company continued to lose ground and more customers.
4. The Economy Turned Against It
Following the economic impact of COVID-19 across Africa, Jumia Foods found it more difficult to turn a profit. In Nigeria, inflation topped 20% in 2023. Fuel subsidies were removed and food prices went up.
That wasn’t just bad for customers, it wrecked the delivery costs. Riders demanded more to offset rising fuel, and restaurants passed on costs. As the company slashed its own marketing and stopped offering free delivery, volumes fell.
Consumers dropped off in favor of companies like Glovo and Chowdeck, which were well funded with deep pockets and offered initial discounts that were tantalizing enough to draw customers away.
In Ghana, Egypt, and Senegal, Jumia Food shut down by late 2022. The rest followed in 2023.
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Lessons From Jumia’s Story
The rise and fall of Jumia’s food delivery service offer several broader lessons about the African food delivery business and tech strategy:
Lesson 1: Growth Without Margin Is a Trap
If each order loses money, then more orders mean more losses. That’s not scale. That’s a countdown. Jumia Food looked big from the outside, but every added delivery deepened the hole. It is a lesson on the importance of always measuring scale against sustainability.
Before scaling, test the margin on your most common service unit. If it’s negative, stop. Fix it first.
Lesson 2: Hyperlocal Wins in Logistics
Companies like Chowdeck didn’t try to conquer Africa. It focused on Nigerian cities, built an efficient dispatch system by leveraging technology, and then hired riders who knew the roads.
The seemingly simple approach beat a multinational giant. Not because of better branding, but because it worked. The lesson here is that local execution beats global ambition when dealing with streets, traffic, and timing.
Lesson 3: Don’t Subsidize Bad Models
Discounts can sometimes hide weak operations. And in the case of Jumia Food, it was true. The company used coupons to cover service issues. So when the deals stopped, customers left because they couldn’t stand the poor service.
Chowdeck did the opposite. It priced services to match reality and still grew 10x in a year.
“We raised fees when fuel prices rose,” one Chowdeck executive said. “Customers understood. Riders stayed. And we stayed profitable.”
Always set prices that reflect your costs. Customers who value your service will pay. And if more customers do not value the service enough, it may be time to rethink the process.
Lesson 4: Food Logistics Needs Its Own Strategy
E-commerce and food delivery aren’t the same. One allows next-day shipping. The other needs 30-minute precision. Jumia tried to run both using the same infrastructure. That decision cost them years and millions of dollars.
If your delivery involves perishables, time sensitivity, or on-demand fulfillment, build a separate playbook. Don’t lump it with standard logistics.
Lesson 5: Be Ready for Economic Shocks
When fuel prices spiked, Glovo switched to bikes for short trips in Lagos, and Chowdeck adjusted delivery fees within days. Meanwhile, Jumia Food couldn’t respond fast. Its structure was too rigid.
Build flexibility into your operations. Use tiered pricing. Train staff to adapt. Monitor real-time costs. Agile systems stay alive when shocks hit.
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What African Food Logistics and Delivery Companies Should Do Differently
Here’s how you turn Jumia’s mistakes into your advantage:
- Run numbers weekly. Track margin per unit, not just revenue.
- Invest in local routing. Use AI, GPS tagging, and order clustering.
- Pay your riders well. They are your brand. Their delays cost you trust.
- Don’t fake loyalty. Subsidy-driven customers leave. Service-driven ones stay.
- Be brutally honest. If a market isn’t working, pause. Fix the model. Come back stronger.
Wrap Up
Jumia Food Delivery didn’t fail because of the lack of demand. It failed because the business didn’t make money. Glovo stayed because it could burn cash. Chowdeck stayed because it didn’t need to.
Every logistics operator has to choose: burn capital for growth or build operations that survive real costs. The better choice? Fix the unit. Then scale the profit. That’s not just smart logistics. That’s smart business.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
