E-commerce giant, Jumia Technologies AG recorded a $20.1 million operating loss in Q3 2024, representing a 10% increase year-on-year when compared with the $18.3 million posted in the same period last year.
The company reported revenues of $36.4 million, representing a 13% year-over-year decrease but a 9% increase in constant currency terms, reflecting resilience in core operational markets despite significant currency depreciation in Nigeria and Egypt.
Jumia’s Gross Merchandise Value (GMV) for the quarter stood at $162.9 million, down by 1% year-over-year but up 29% in constant currency.
Positive trends in active customer base
Despite the decline in revenue, the company recorded a marginal increase in its quarterly active customer base growing 1% year-over-year, while orders were up by 4%, indicating steady usage amid external challenges.
Jumia also reported a stronger liquidity position of $164.6 million, bolstered by proceeds from its August 2024 At-the-Market (ATM) offering.
This compares to a liquidity decrease of $19 million in Q3 2023, providing the company with additional resources to accelerate growth while maintaining a disciplined approach to spending.
Company’s comments
Commenting on the results, Jumia’s CEO, Francis Dufay, said:
“We are encouraged to see continued resilience in our usage and business fundamentals despite the significant first quarter currency depreciation headwinds in Nigeria and Egypt that continue to impact reported GMV and topline revenue.
We undertook several major operational steps in the quarter, including improvements to our logistics network and the consolidation of our warehouse footprint to enable greater efficiencies and increase supply capacity.
“While these changes negatively impacted operations and expenses in the third quarter, we believe that these efforts position us well to scale and drive profitable growth as we expand our footprint beyond the major cities (“upcountry”).”
Strategic market exits
As part of its strategic repositioning, Jumia ceased operations in South Africa and Tunisia to reallocate resources to higher-growth markets.
This move follows an extensive review of the company’s footprint, aimed at driving efficiencies in its logistics network and consolidating its warehousing operations.
“While these updates will have a near-term impact on our operations and financial performance, we believe that our efforts position the business well to scale on our path to profitability,” said Dufay.
When the company announced its exit from South Africa and Tunisia last month, it noted that the strategic move was aimed at optimizing resources and focusing on markets with stronger growth potential across the continent, which include Nigeria and others.
It added that the decision came as it evaluated its operations in the two countries, which accounted for a small share of the company’s overall business.
According to Jumia, for the year ended December 31, 2023, and the first half of 2024, South Africa and Tunisia contributed just 3.5% and 2.7% of total orders, and 4.5% and 3.0% of gross merchandise value (GMV), respectively.
What you should know
After posting a 64% decline in operating loss for 2023, down to $73 million, Jumia’s CEO, Dufay, who has been implementing several strategies to cut its losses and move to profitability expressed confidence that the business would back to growth this year while further reducing its losses.
According to him, the results of the recent quarters had shown clear steps towards Jumia’s strategic focus, positioning it for topline growth and improved cash utilization for 2024.
Before that time, Jumia, as part of strategies to cut its perennial losses and move to profitability, had in Q4 2022 slashed its workforce by 20% in an exercise that saw the exit of 900 people from the company.
The company also had to discontinue its food business, Jumia Food, which was described as unprofitable.
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