BY KARUKIIKO DENIS
Over the last 10 years, several big foreign companies including British Airways, Vodacom, Barclays
Bank and Etihad Airways exited the Ugandan market. The latest are the retail giants Game and
ShopRite joining the long list of similar players in the business Nakumatt and Uchumi that exited Uganda
market.
Their exit was blamed on the reduction in incomes among the middle class after their income dipped
following the pandemic.
As a result, there has been a massive loss of jobs, which has affected Uganda’s tax base. The
Ministry of Finance Planning and Economic Development promised to investigate the issue after the
latest exit of Shoprite.
As the Ministry of Finance Planning and Economic Development is still investigating the issue at
hand,Jumia foods has also announced its exit at the end of this month.Jumia has been operating its food
delivery business in Uganda,Kenya, Nigeria, Morocco, Tunisia,Algeria,and Ivory Coast.
The official statement says, “Following a strategic review of jumia food, the company determined that
its food delivery business is not suitable to the current operating environment and macroeconomic
conditions in its market and will close its food delivery operations in all markets by the end of December
2023.The decision aligns with the company’s strategy to optimize its capital and resource allocationand
Jumia’s GMV for the nine months ended September 30, 2023 and has not been profitable since
inception of the business.”
“The more we focus on our physical goods business, the more we realize that there is huge potential for
jumia to grow, with a path to profitability.We must make the right decision and fully focus on our
management, our teams and our capital resources to go after this opportunity. In the current context, it
means leaving a business line which we believe does not offer the same upside potential delivery”,
said Francis Durfay, Chief Executive Officer of Jumia.
“Food delivery remains a business with very challenging economics, in Africa and across the world, and
we want to focus our efforts on physical goods e-commerce business, in the eleven markets where we
operate. This is a matter of prioritization of opportunities and expected return on investment, “said
Antoine Maillet, EVP Finance and operations of jumia.
This comes at a time where the study revealed that the majority of the businesses were successful
(54.1%) and failures were (45.9%). It also showed that businesses owned by youths with high levels of
education have 60% higher odds of not failing. 40% of businesses fail within the first three years, 49.9%
within five years, 65.8% within 10 years, 73.3% within 15 years, and nearly 80% within 20 years. If you’re
getting ready to start your open business or you’re in your first year, you’re probably equal parts excited and nervous.
