Jumia, Africa’s leading e-commerce platform, showcased its resilience and strategic progress despite a challenging economic environment. The company reported a 17% decline in revenue to $36.5 million but revealed a strong underlying performance with a 15% increase on a constant currency basis, reflecting the impact of currency devaluations in key markets.
Under CEO Francis Dufay’s leadership, Jumia has enhanced cash efficiency, refined its customer value proposition, and leveraged strategic partnerships, resulting in notable operational and financial improvements. Despite the revenue drop, Gross Merchandise Value (GMV) showed a 35% growth in constant currency terms, reaching $170.1 million in reported currency.
Cost management has been a significant focus for Jumia, leading to an 8% year-over-year reduction in operating loss to $20.2 million and a 10% decrease in Adjusted EBITDA loss to $16.3 million. The company also significantly reduced its cash burn to $8.7 million, demonstrating disciplined expenditure and efficient resource use.
Marketing expenses were cut by 19%, with a shift towards high-return channels like CRM, SEO, and targeted offline initiatives. This strategic move contributed to a 7% increase in orders year-over-year and a 31% rise in JumiaPay transactions, supported by the growing use of JumiaPay on delivery and strategic cashback campaigns.
Jumia’s logistics network expanded with new warehouses in Nigeria and Morocco, enhancing storage capacity and supply chain management while focusing on leasing facilities to maintain financial stability. Despite regional currency devaluations impacting GMV and Total Payment Volume (TPV), Jumia’s prudent decision to hold 67% of its liquidity in USD mitigated some risks.
The company’s decision to end its commercial agreement with Mastercard Asia/Pacific marks a strategic shift to explore broader partnerships with other payment service providers, aiming to strengthen JumiaPay’s position in the e-commerce ecosystem.
Jumia’s strategic initiatives led to a 6% quarter-over-quarter increase in active customers and an improved 90-day repurchase rate for new customers. A shift in product mix towards lower Average Order Value (AOV) categories like fashion resulted in a 7% decline in AOV for physical goods but broadened the customer base.
Efforts to penetrate secondary cities yielded positive results, with 53% of total orders now coming from these regions, highlighting geographic diversification critical for future growth.
“Jumia remains committed to its long-term strategy of reducing losses and driving towards profitability,” the company stated. With a focus on cash efficiency, expanding its supplier base, and enhancing its logistics network, Jumia is well-positioned for continued growth. The launch of additional Buy Now, Pay Later (BNPL) partnerships in Nigeria aims to strengthen its financial services offerings and facilitate greater consumer access to e-commerce.
In conclusion, Jumia’s Q2 2024 results underscore a period of strategic execution and sustainable growth, positioning the company as a pivotal player in connecting millions of African consumers with a diverse range of products and services.
