According to reports, popular e-commerce store Jumia records a decline of 1 million active customers as the company achieves a significant reduction in operational losses in Q2 2023. Jumia like other businesses operating in Nigeria has been impacted by the economic situation of Nigeria.
The company which also operates in other African countries, is also unfortunately bound to the same fate as in Nigeria. In Ghana, the inflation rate has hit 43% while in Egypt it has risen to around 35%.
The harsh economic conditions caused a fall in the company’s income from $57.3 million in Q2 2022 to $48.5m in Q2 2023 and the volume order from 10.3million in Q2 2022 to 6.5 million in Q2 2023 while the value of all goods sold on the Jumia platform reduced to $202 million.
The Q2 financial report of the e-commerce store reveals that the company has experienced a reduction in losses. Jumia recorded a reduction in its operating losses from $23.3 million in Q2 2023, as a result of cutting down on sales and marketing.
In Q2 2022, Jumia spent $ 22.2 million on advertising while in Q2 2023, the company spent $5.8 million on advertising. There is also the impact of reduced administrative and general expenses as a result of staff that were laid off earlier in the year. Technology expenses also reduced when compared to 2022.
However, the economies of host countries continue to have a significant impact on the company, the online store is losing customers due to the harsh realities of the economies.
The purchasing power of people has been greatly lowered which in turn affects the company’s customer base and revenue.
The company said, “Usage performance continued to be affected by the difficult operating environment with record levels of inflation impacting consumers’ spend as well as sellers’ ability to source goods.”
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