African e-commerce company, Jumia Technologies, has announced that it intends to shut down its food delivery business in all the seven countries it operates in by the end of 2024.

In an announcement made on Wednesday, Jumia indicated that it will instead shift all its energies to expanding its core online retail business amid a tumultuous financial period.

The embattled e-commerce company will now pay more attention to its main physical goods delivery business as well as the Jumia Pay platform in the 11 countries it operates in.

The firm has recently been forced to take stringent steps to cut costs including laying off employees and reducing delivery services that are not related to its e-commerce business.

It says Jumia Food is inapt to the prevailing operating environment and macroeconomic conditions and closing it down will help optimize on its resources as it seeks to be profitable.

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The decision to cut loose the business points at an admittance by the company that Jumia Food has not been making profits and was struggling in the very competitive food segment.

Jumia Food operates in Kenya, Uganda, Nigeria, Ivory Coast, Tunisia, Morocco and Algeria with its Q3 2023 losses reducing by 67 per cent according to its latest financial disclosures.

Jumia Food has struggled to realise profitability since its launch in 2013 despite comprising 11 per cent of Jumia's Gross Merchandise Value (GMV) in the initial nine months of 2023.

In essence, this means that the total value of food sold through Jumia Food stood at USD64 million out of the USD581 million generated by Jumia from January to September 2023.

Jumia also announced that some of the employees who have been working in Jumia Food will be absorbed under its core e-commerce business in the 11 countries after December.

Jumia, which is built around logistics service, payment service, and marketplace, is the first Africa-focused tech start-up company to be listed on the New York Stock Exchange (NYSE).

When it went public on the NYSE in April 2019, Jumia rakes in $196 million in net proceeds with the share price offered at $14.50 rising by 200 per cent in just three sessions of trading.

Jumia Food makes money by charging sellers a commission on sales, generating advertising revenue from businesses, and collecting subscription fees from Jumia Prime subscribers.