Jumia cuts loss to $20.2m

E-commerce platform, Jumia Technologies AG, has reported a reduction of its operating loss by eight per cent year-over-year to $20.2m despite economic challenges.

In a statement, Jumia explained the impact of the volatile economic landscape on its operations, including a decline in revenue and a slight decrease in gross merchandise value.

It stated that it experienced a 17 per cent decline in revenue to $36.5m in Q2 2024. However, on a constant currency basis, revenue increased by 15 per cent.

The e-commerce company attributed the figures to a robust underlying performance despite currency devaluations in key markets.

For Jumia’s gross merchandise value, the company reported a 35 per cent growth in constant currency, though it decreased by five per cent to $170.1m.

The company said its GMV reflected effective adaptation and focus on core strengths, such as optimising product offerings and enhancing customer engagement.

Jumia noted that its strategic cost management efforts yielded significant results, including operating loss reduction by 8 per cent year-over-year to $20.2m, adjusted EBITDA loss decrease by 10 per cent to $16.3m and a reduction in cash burn to $8.7m.

“This efficiency was partly achieved through a 19 per cent reduction in marketing expenses, with a focus on high-return channels like CRM, SEO, and targeted offline initiatives,” the firm stated.

Jumia reported that its efforts at enhancing customer value and experience led to a seven per cent increase in orders year-over-year and a 31 per cent rise in JumiaPay transactions that was driven by greater JumiaPay on delivery penetration and strategic cashback campaigns.

The company expanded its logistics network by opening new warehouses in Nigeria and Morocco to support its asset-light business model.

Meanwhile, Jumia stated that regional currency devaluations affected its GMV and total payment volume, which declined by 7 per cent.

The company observed its lifeline against the currency devaluation came from holding 67 per cent of its liquidity in USD which helped it mitigate some currency risks.

Among other achievements, Jumia stated it ended its commercial agreement with Mastercard Asia/Pacific to explore broader partnerships with other payment service providers to strengthen JumiaPay,

The company noted that its strategic focus led to a 6 per cent quarter-over-quarter increase in quarterly active customers and an improved 90-day repurchase rate for new customers by 262 basis points to 36 per cent.

Jumia declared it remained committed to reducing losses and driving towards profitability as it stated plans to enhance cash efficiency further, targeting reductions in cash utilisation compared to FY 2023.

Jumia said the launch of additional Buy Now Pay Later partnerships in Nigeria was a testament to its intent to strengthen its financial services offerings, facilitating greater consumer access to e-commerce.

“These initiatives, combined with disciplined financial management, position Jumia for continued growth,” the statement read.