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Jumia Food Exits Nigeria, Other African Markets

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Jumia, the continent’s leading online retailer, announced that it will close Jumia Food, its food delivery service, by the end of December 2023, in a move that sent shockwaves through the African e-commerce scene.

Jumia Food Exits Nigeria, Other African Markets

This sudden departure leaves a gaping hole in the burgeoning African food delivery market, raising questions about its future and the challenges facing major players.

Francis Dufay, CEO, Jumia cited a clear focus on the company’s core physical goods business and Jumia Pay platform as the reason for the exit.

Despite Jumia Food accounting for 11% of the company’s Gross Merchandise Value, its persistent struggle for profitability proved the tipping point.

He stated, “The more we concentrate on our physical goods business, the more we recognize the substantial opportunities for Jumia to flourish and achieve profitability. Hence, we must make the right decision by directing our management, teams, and capital resources towards seizing this opportunity.”

The news comes as no surprise to industry observers who witnessed Jumia Food’s rollercoaster ride. After a meteoric rise in 2021 with 82% year-over-year growth, the company faced a sharp decline in 2023, attributed to a shift towards profitability and reduced consumer incentives.

This exit is not an isolated incident. Bolt Food, another major player, also announced its withdrawal from Nigeria and South Africa, highlighting the harsh realities of the African food delivery landscape. Economic downturns, high inflation, and fierce competition from entrenched rivals like Uber Eats and Gokada are creating a volatile and unforgiving environment.

“It’s a segment that’s very difficult across the world, with very challenging economics and big losses. It’s also a segment that is extremely competitive across the world and Africa,” Francis Dufay, chief executive officer  told Reuters.

“The economics are tough in this market because the costs are very high and there is plenty of competition so there is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers.”

However, amidst the doom and gloom, some players are finding success. Barcelona-based Glovo, through strategic partnerships with restaurant chains like Chicken Republic and Shoprite, is carving its niche in Sub-Saharan Africa.

Closer to home, Nigerian startup Chowdeck celebrates delivering over ₦‎1 billion worth of food in a single month, marking a major milestone in its expansion.

While Chowdeck’s success is promising, it’s crucial to remember Jumia’s scale.

Their $64 million in food delivery GMV for nine months translates to a staggering ₦‎5.7 billion per month, yet profitability remained elusive.

This underscores the universal challenge of achieving profitability in the global food delivery market, with giants like Doordash and Uber struggling despite massive venture capital investments.

With Africa’s food delivery market expected to reach $1.7 billion by 2028, the potential is undeniable. But the path to success is riddled with obstacles. Partnerships, technological innovations, and capital-efficient models like Chowdeck’s might hold the key.

 


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E-Business

NITDA Commits to Deliver NDLF Initiatives Through Innovative Ideas

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In line with the digital literacy campaign of the National Information Technology Development Agency (NITDA), the Director General NITDA Kashifu Inuwa CCIE has said the Agency’s committed to achieving 70% digital literacy level by 2025 through innovative approaches in delivering initiatives, continuous collaborations and stakeholder engagement.

Inuwa made this known while receiving representatives from the Afre.lib Academy led by the Executive Director of Operation Mrs Joice Gomina who were on a visit to the Agency’s Corporate Headquarters in Abuja.

The purpose of the visit was to seek NITDA’s partnership as co-host of Afre.lib Academy’s bootcamps in August; 2024 Tech and Career Expo with the theme “Tech for Earth” in September; to have the DG as a Keynote Speaker and sponsorship support for their Tech Challenge Winners.

He said from the digital literacy perspective “We have three key areas, firstly, is the Formal Education where we are working with the minister of education to review curriculum and infuse all these skills in formal education, but we have a lot to do to achieve that in terms of training the teachers, getting the equipment available for them to use and so on.”

“Sencodly, for those outside the formal education (informal), we have an initiative which we call the Digital Literacy for All where we are working on building an Edtech platform (a learning Management System) where people can learn at their own pace. We are looking at translating it to Nigerian Languages, so that people who cannot read and understand English can do so in their own local languages.”

“We are exploring partnering with the National Youth Service Corp (NYSC) as they are in 774 local government areas, to be onboarding people and making the content as simple as possible. So that anybody who listens or watches these contents can pick something from it. We believe going through the NYSC will help use reach the critical mass we are looking at.”

“Finally, we also have the formal workforce, which is to train people working for the government and private sector because the workforce needs to be digitally literate to increase productivity at work.

Inuwa assured the Academy of the Agency’s full support as both organisation share the same vison of fostering IT development and digital literacy.

“We need to review your curriculum to make sure it aligns with the National Digital Literacy Framework (NDLF).”

He added that NITDA is working to have at least one Innovation Hub per state so that when people learn they can have a place to develop there proof of concept.

He stated that both organisations can work together in the aspect of having tech clubs across schools in the country.

The ED Afre.lib Mrs Gomina said that the Academy’s which is a made up of a team of experts’ passionate educators has seen the gap between young children who are digital natives and their teachers who are still using old methods to prepare them for a future that is constantly evolving.

She said the Academy is working on building a platform where these children will be mentored and given a safe space to explore technology within the ethics of morality.

“We want to reduce that entitlement mentality and increase that mentality of citizenship, responsibility, and showing them that they can contribute to nation building using technology,” she said

She mentioned that some of the activities of the Academy includes, bootcamps for children, summer tech challenges teacher training as she appreciated the Agency for its willingness to support and partner with the Academy.

The Academy did a demo of some of the prototype developed by children who have undergone trainings with them.

 


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E-Business

e-Governance Reform Saves Edo State N60Bn

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Donatus Ojiefoh, Edo State Commissioner of Mines and Energy, has said Mr Godwin Obaseki, state governor, e-governance in the state civil service sector has saved the sum of N60 billion, an amount that would have been expended in the procurement of office stationery.

Ojiefoh in an interview with newsmen in Benin City also disclosed that the state government reforms in the electricity and the solid mineral sectors have repositioned the state as one of the most businesses friendly in Nigeria.

He noted that sustaining the state government reforms and achievements, voters in the forthcoming September 21st governorship election should not make the mistake of voting for a candidate that lacks understanding in investment and development.

He said harnessing maximally the abundant mineral resources, the state government has registered the Edo State Mining and Investment Company and has obtained 40 mining licenses adding that government reforms put in place has continued to yield positive results.

“If Obaseki was the governor before now Edo state would have been one of the richest states in the federation. It is crystal clear that the next governor that is coming must be able to match Obaseki’s shoes, somebody who understands the investment and development status of the state at the moment.

“Edo state is ten years ahead of other states apart from Lagos. Edo has put over 20 million files into the e-governance structure since the state was created and is the only state operating 100 per cent e-governance thereby the delay and bureaucracy in governance is over.

“Obaseki has saved over N60 billion for Edo State just on office stationery alone. Whatever paper you see in my office are external papers or files. It takes a man with a potent brain that understands saving system to achieve that and we are the only state in Nigeria that has completely moved from analogue to digital.”


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Scammers Target Facebook Business Accounts using Meta’s Infrastructure and Branding

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Kaspersky has discovered a new phishing scheme targeting Facebook business accounts, using legitimate Facebook infrastructure to send deceptive emails with threats of account suspension.

Cybercriminals have devised a method to use authentic Facebook functions to send fake suspension warnings to business accounts. These emails, originating from Facebook, contain alarming messages such as “24 Hours Left to Request Review. See Why”.

Clicking the email link leads to a genuine Facebook page displaying a similar warning. After that, a user is redirected to a phishing site disguised with Meta branding, reducing the time to resolve the issue from 24 to 12 hours. Finally, the phishing site initially asks for innocuous information, followed by a request for the account’s email, or phone number and password.

The attackers utilise compromised Facebook accounts to send these notifications. They change the account name to a threatening message and the profile picture to an exclamation mark, after which they create posts mentioning the targeted business accounts.

And because delivery is via the actual Facebook infrastructure, these notifications are guaranteed to reach their intended recipients.

“Even notifications that appear legitimate and come from a trusted source such as Facebook can be deceptive. It’s crucial to carefully examine the links you are prompted to follow, especially when it involves entering data or making payments. This can make a significant difference in protecting your business accounts from phishing attacks,” comments Andrey Kovtun, a security expert at Kaspersky.

 


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