E-commerce giant Jumia Technologies AG has reported an 8% year-over-year reduction in its operating loss, which now stands at $20.2 million, despite facing significant economic challenges. The company shared these results in its Q2 2024 financial statement, highlighting the resilience of its operations amidst a volatile economic landscape.
Jumia revealed a 17% decline in revenue to $36.5 million for Q2 2024, though on a constant currency basis, revenue actually increased by 15%. This decline was largely attributed to currency devaluations in key markets, yet the company managed to maintain robust underlying performance.
The company’s gross merchandise value (GMV) also saw mixed results. While GMV grew by 35% on a constant currency basis, it decreased by 5% to $170.1 million. Jumia credited this to its effective adaptation strategies, which focused on optimizing product offerings and enhancing customer engagement.
Strategic cost management played a critical role in Jumia’s improved financial performance. The company reported an adjusted EBITDA loss reduction by 10% to $16.3 million and a significant decrease in cash burn to $8.7 million. One of the key factors contributing to these improvements was a 19% reduction in marketing expenses, with efforts concentrated on high-return channels such as CRM, SEO, and targeted offline initiatives.
Jumia’s customer-centric strategies yielded positive results, with a 7% increase in orders year-over-year and a 31% rise in JumiaPay transactions. The latter was bolstered by increased penetration of JumiaPay on delivery and strategic cashback campaigns.
Further strengthening its operations, Jumia expanded its logistics network by opening new warehouses in Nigeria and Morocco, supporting its asset-light business model. However, regional currency devaluations negatively impacted its GMV and total payment volume, which declined by 7%. The company mitigated some of the currency risks by holding 67% of its liquidity in USD.
In a strategic move, Jumia ended its commercial agreement with Mastercard Asia/Pacific, opting to explore broader partnerships with other payment service providers to enhance JumiaPay. This shift is part of Jumia’s ongoing efforts to strengthen its financial services offerings, including the launch of additional Buy Now Pay Later partnerships in Nigeria.
Jumia also reported a 6% quarter-over-quarter increase in quarterly active customers and an improved 90-day repurchase rate for new customers by 262 basis points to 36%. These improvements underscore Jumia’s commitment to enhancing customer value and experience.
Looking ahead, Jumia expressed its dedication to further reducing losses and driving towards profitability. The company plans to continue improving cash efficiency, with a focus on reducing cash utilization compared to the previous fiscal year.
Jumia’s management remains optimistic about the company’s future growth, driven by disciplined financial management and strategic initiatives that enhance consumer access to e-commerce across its markets.
