Jumia, Africa’s e-commerce group, reported an operating loss of $20.2 million in Q2 2024, marking a 17% decline in revenue.
However, it’s worth noting that the company managed to reduce its losses by 8% compared to the same period last year when it reported an operating loss of $22.1 million.
The group’s revenue for the second quarter was $36.5 million, down from $44 million in the corresponding period last year.
Jumia’s gross merchandise value (GMV) as at Q2 2024, that is, the total amount customers paid before deductions like fees, discounts, or returns, declined by 5% year-over-year to $170.1 million in the period under review.
The company blamed this on currency devaluations in some of its operating countries.
In his comments on the company’s performance, Jumia’s group CEO, Francis Dufay, noted that the company’s strategy to cut its losses and move to profitability is working as envisaged.
“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 toward profitability,” he said.
Since he took over as CEO, Dufay has been pursuing a cost-cutting strategy, part of which led to the cutting of about 900 jobs. The company also shut down Jumia Foods in 2023, with Dufay reporting that it would help the company reduce 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. ◦
“As a result of these efforts, Jumia is attracting a stickier and higher quality customer base as evidenced by a 262 basis point year-over-year improvement in repurchase rates in the first quarter of 2024,” Dufay added.
According to the financial result, JumiaPay transactions reached 1.9 million in the second quarter, an increase of 31% year-over-year.
The company said this was mainly driven by increased penetration of JumiaPay on delivery as well as the implementation of cashback campaigns and incentives conducted in the second quarter of 2024. ◦
It further disclosed that there is an ongoing effort to streamline the user experience, adding that the continued rollout of JumiaPay on delivery to increase cashless orders positions JumiaPay as a strong enabler of the Company’s e-commerce platform.
It should be noted that during the release of its Q1 2024 financial results, Dufay mentioned that Jumia was experiencing growth in two of its key markets, Nigeria and Ghana, despite challenging economic conditions in these countries.
According to him, the company’s success is more notable when considered against the challenging macro environment in Africa.
Significant currency devaluations in some of its largest markets have impacted both purchasing power and supply availability, making for a difficult operating environment.
However, Dufay said Jumia’s ability to secure sufficient inventory and offer a diversified product assortment at competitive prices continues to keep consumers engaged on its platform.
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