Jumia Extends its Food Delivery to Egypt for Better Profitability

Food accounts for 20% of all transactions on the platform and is rapidly expanding, according to co-Chief Executive Officer Sacha Poignonnec. According to him, the company is extending the service into Egypt, where there is a market gap following Uber Eats’ departure.

Poignonnec said after announcing a narrowed fourth-quarter loss earlier this week that food distribution is increasingly becoming a lifeline for the company. Despite the fact that restaurants in some countries, such as Morocco, had to close early due to lockdowns, the New York-listed business nevertheless reached 5 million online food orders in 2020.

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His remarks follow a year in which demand for delivered meals and groceries skyrocketed around the world as people remained indoors due to coronavirus restrictions. The online food distribution market is projected to reached $45 billion by 2020, according to Morgan Stanley, and U.K. firm Just Eat Plc was the target of a bruising $8 billion takeover fight well before the pandemic began in earnest.

The trend has been slower to take off in Africa, where internet connections remain sluggish and unaffordable for large parts of the population. Yet expanding into food fits with Jumia’s strategy of bringing e-commerce to countries where global giants such as Amazon.com Inc. and Alibaba have yet to make major inroads.

In Africa, where internet connections are slow and costly for a large portion of the population, the trend has been slower to catch on. Nonetheless, growing into food is in line with Jumia’s strategy of introducing e-commerce to countries where multinational behemoths like Amazon and Alibaba are yet to make substantial inroads.

Jumia was founded in 2012 by Poignonnec and Jeremy Hodara in Lagos, Nigeria, and now operates in 11 countries. After a rough start as a publicly traded company in 2019, the stock has risen nearly 1000 percent in the last year, valuing the still-profitable company at $3.9 billion.