African e-commerce Jumia launches food delivery service in Egypt, grabbing $2.5 billion market

Jumia co-founder and CEO Sacha Poignonnec said in an interview that food transactions already account for 20% of the platform's total transaction volume and are growing rapidly.

He said Jumia took advantage of a gap in the Egyptian food delivery market after Uber exited the country , where Mr D Food and Uber Eats dominate outside South Africa.

In its recently released fourth-quarter earnings report, Jumia said the food delivery business is "increasingly important to us." Despite restaurants in markets such as Morocco closing early due to the pandemic lockdown, Jumia still received and fulfilled more than 5 million online food orders in 2020.

Due to epidemic prevention and control measures, people are required to study and work at home, and the demand for takeout and groceries has exploded around the world. Morgan Stanley estimates that the online food delivery market reached $45 billion in 2020. Capital has also been eyeing companies in this market for a long time. It is reported that the British food delivery company Just Eat had become the target of an $8 billion acquisition war before the outbreak of the epidemic abroad.

This trend has been slow to develop in Africa given the development of the Internet and the economic capabilities of consumers. The expansion of Jumia's food delivery business in the African continent is aimed at occupying its own market before giants such as Amazon and Alibaba enter Africa.

It is reported that the size of Egypt's food delivery market is nearly US$2.5 billion , very close to the market size of South Africa (US$2.8 billion) and Turkey (US$3 billion).

Jumia is an e-commerce platform founded by Frenchmen Sacha Poignonnec and Jeremy Hodara in Lagos, Nigeria in 2012. It was launched in Egypt, Morocco, Côte d'Ivoire, Kenya and South Africa in the same year.

As of 2018, Jumia had offices in 14 countries in Africa. However, less than a year after its listing on the New York Stock Exchange in 2019, Jumia suspended its operations in Cameroon, Tanzania and Rwanda.

Jumia has been criticized for being overly dependent on mobile phone and electronic product sales, but its founder said that transactions in other products and fashion categories are gradually improving. In addition to e-commerce and food delivery businesses, some of Jumia's revenue also comes from its payment and logistics businesses.

A large part of the reason is the sluggish e-commerce consumption among African users. Under the influence of the epidemic, e-commerce can be said to be one of the industries that benefited the most. However, Jumia's financial report shows that its fourth-quarter revenue was 41.76 million euros, a year-on-year decrease of 15.25%, and has declined for four consecutive quarters.

Judging from its annual revenue, Jumia has also been losing money year after year. Its net losses in the past three years reached 170 million euros, 227 million euros and 161 million euros respectively.

It seems that Jumia has a long way to go to maintain its e-commerce position in Africa.

middle East

Egypt

Jumia