Jumia To Focus On Physical Goods Business And Close Its Food Delivery Operations; The Food Delivery Business Represents ~11% Of Jumia's GMV For The 9-Months Ended September 30, 2023 And Has Not Been Profitable Since Inception Of The Business
Portfolio Pulse from Benzinga Newsdesk
Jumia Technologies AG (NYSE:JMIA) is shutting down its food delivery service, Jumia Food, which accounts for about 11% of its GMV for the nine months ending September 30, 2023. The company will focus on its core physical goods and JumiaPay businesses. The food delivery segment has been unprofitable since its inception, and the closure is part of Jumia's strategy to optimize capital, resources, and pursue profitability. Employees from the food delivery sector will be moved to the physical goods segment.
December 13, 2023 | 9:36 pm
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NEUTRAL IMPACT
Jumia is discontinuing its food delivery service to concentrate on its more promising physical goods and JumiaPay segments. The food delivery business, which is not profitable, represents a significant portion of Jumia's GMV.
While the closure of the food delivery service removes a revenue stream, it also cuts losses from an unprofitable segment. This could be seen as a positive move towards profitability, but the impact on the stock will depend on investor perception of the company's future growth potential without the food delivery business.
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IMPORTANCE 75
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