Jumia, Africa’s leading eCommerce platform, faced a challenging third quarter in 2024, with revenue falling by 14% year-on-year to $36.5 million. The decline, primarily driven by currency depreciation in key markets like Nigeria and Egypt, underscores the economic pressures affecting African businesses. Despite these setbacks, Jumia’s underlying performance metrics reflect positive trends when adjusted for local currency impact, as gross merchandise volume (GMV) showed growth in constant currency.
Customer Engagement Remains Strong
While revenue dipped, Jumia reported a 6% increase in order volume, highlighting resilient customer interest and engagement. Active customer growth and a 27% boost in orders in constant currency indicate solid demand across its core markets, including Nigeria, Egypt, and Kenya. JumiaPay, the company’s digital payments arm, recorded significant growth, with over two million transactions—a 30% increase year-on-year. This growth in digital payments aligns with Jumia’s strategy to enhance its ecosystem, foster customer loyalty, and attract new users.
Adapting to Economic Pressures
In response to economic and operational challenges, Jumia has exited less profitable markets, including South Africa and Tunisia, to focus on high-growth regions. CEO Francis Dufay emphasized that this strategy allows Jumia to reallocate resources toward markets with stronger eCommerce potential, while also enhancing cost efficiency. By streamlining operations, reducing cash burn, and cutting back on sales and marketing expenses, Jumia is focusing on organic growth and prudent spending in the face of inflation and intense competition.
Strengthening Financial Position
To address liquidity concerns, Jumia recently raised nearly $100 million through a secondary share offering. According to Dufay, this capital will fund strategic projects aimed at improving the platform’s customer experience and supporting its vendor network, positioning Jumia for long-term growth. The additional cash also provides a buffer to support expansion into underserved African markets where demand for eCommerce is rising despite economic headwinds.
Focused on Path to Profitability
As Jumia charts a course toward profitability, it has implemented various streamlining measures, including scaling back some business units like Jumia Food in select countries. The company aims to further strengthen its supply chain by working closely with local and global suppliers to ensure competitive pricing and reliable service for customers.
Although external factors such as currency volatility and inflation may continue to impact Jumia’s near-term performance, the company’s focus on core markets, cost efficiency, and digital payments integration reflects a strategy geared toward resilience. Dufay expressed cautious optimism about Jumia’s trajectory, highlighting its commitment to becoming a profitable leader in the African eCommerce market amidst economic uncertainties.
As Jumia adapts to the realities of African markets, its strategy of consolidating resources and focusing on high-potential areas underscores a forward-looking approach to building sustainable growth.
