Jumia Food

~ the last words ~

Every delivery app holds your money for a while. Riders earn into a balance that lives inside the platform and withdraw it on a schedule the platform decides, which is a normal enough arrangement right until the platform stops existing. After that the balance is a number on a screen belonging to a company that has moved on to something else.

Jumia announced on 13 December 2023 that it was closing Jumia Food in every market it ran, seven countries spread from Morocco down to Kenya, before the end of that same month. Two weeks of notice for a business that had been operating for eleven years.

It began in 2012 as HelloFood, one of the ventures Rocket Internet spun up under Africa Internet Group, back when the model was to take a working western business and stand up a version of it in a market that did not have one yet. When Africa Internet Group renamed itself Jumia in June 2016, HelloFood became Jumia Food along with the rest of the portfolio.

This is not my continent and it was never my app. What I recognize is the shape of the thing: a business that grows quickly and loses money on every single transaction. Delivery economics failed in Lagos for the same reason they fail everywhere. Somebody has to be paid to carry a hot meal across a large city, and that cost does not get smaller as you add customers.

~ the record ~

~ the early days ~

For a good stretch it was the fastest growing part of Jumia. In the third quarter of 2022, food was about a fifth of everything the company sold by item count, second only to fashion. Meals are small and frequent, which flatters the volume figures of a marketplace whose other business is selling somebody a phone once every three years.

It also never made money. Jumia's own account of the closure says the food business had not found profitability at any point since it started, so the eleven percent of sales it carried by late 2023 was eleven percent bought at a loss. The competition thickened at the same time. Glovo and Bolt Food arrived with foreign capital, and in Nigeria a local operator called Chowdeck grew up underneath all of them.

~ the day it died ~

Francis Dufay, running Jumia since 2022, framed it as focus. The physical goods business had a route to profit and the food business did not, so the management attention and the money would go where the return was. It reads perfectly reasonable in a shareholder letter. Two weeks later the apps stopped taking orders in all seven countries at once.

Hundreds of riders lost the work with almost no warning. Rest of World reported that many of them never got their remaining earnings out of the platform before it closed, and went back months afterward to find the final payments still had not arrived. Restaurants had their own version of it, kitchens built around an order channel that had simply been switched off upstream.

~ the long tail ~

The category did not die with the company. Chowdeck took a large share of what Jumia Food left behind in Nigeria and kept growing afterward, which is the part of this story that usually gets skipped. A foreign-funded platform pulling out is not always the end of a market. Sometimes it is the moment a local one finally gets room to breathe.

What Jumia Food leaves behind is a lesson about who is holding the risk when a platform folds. The shareholders had a bad quarter and a clear strategy update to read. The riders had a balance they could not reach and nobody to send the complaint to, because they had never been employees to begin with.

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