Africa’s leading e-commerce group, Jumia, has reported a $20.2 million operating loss for Q2 2024, reflecting a 17% drop in revenue compared to the same period last year. However, the company’s loss is an 8% improvement year-over-year from the $22.1 million loss recorded in Q2 2023.
Jumia’s revenue for the second quarter stood at $36.5 million, down from $44 million in the corresponding period last year. Additionally, the group’s gross merchandise value (GMV), which includes the total amount customers paid before fees, discounts, or returns, fell by 5% year-over-year to $170.1 million. The company attributed these declines to currency devaluations in several of its operating countries.
Strategic Adjustments and Comments from CEO
Despite these challenges, Jumia’s Group CEO, Francis Dufay, emphasised that the company’s cost-cutting strategy is beginning to yield positive results. “Our performance this quarter reinforces our belief that our strategy is working. Our deep understanding of the African e-commerce market as well as our unique asset base and strategy position Jumia for growth as we progress on the path towards profitability,” Dufay stated.
Since assuming his role, Dufay has implemented significant cost-saving measures, including the reduction of about 900 jobs and the shutdown of Jumia Foods in 2023. These actions, according to Dufay, are part of efforts to minimise losses.
“Jumia continues to take a disciplined and targeted approach to marketing spend focused on targeting more efficient marketing channels, such as search engine optimization (SEO), customer relationship management (CRM), and relevant offline local channels while also leveraging its JForce network,” he said. These efforts have led to a higher quality customer base, as evidenced by a 262-basis point improvement in repurchase rates year-over-year in Q1 2024.
JumiaPay’s Growth
JumiaPay, the company’s payment platform, saw a significant increase in transactions, reaching 1.9 million in the second quarter—a 31% rise year-over-year. This growth was driven by higher JumiaPay penetration on delivery, cashback campaigns, and incentives during Q2 2024. The ongoing efforts to streamline the user experience and the rollout of JumiaPay on delivery aim to boost cashless orders, positioning JumiaPay as a vital component of the company’s e-commerce platform.
Market Performance and Challenges
In Q1 2024, Jumia noted growth in major markets such as Nigeria and Ghana despite challenging economic conditions. The company’s resilience is notable given the tough macroeconomic environment in Africa, marked by significant currency devaluations in key markets. These devaluations have affected purchasing power and supply availability, creating a difficult operating environment. However, Dufay highlighted Jumia’s success in maintaining sufficient inventory and offering a diverse product range at competitive prices, keeping consumers engaged on its platform.
