By Milcah Tanimu
Jumia, a leading African e-commerce platform, remains optimistic about its growth trajectory despite reporting operating losses of $8 million in the first quarter of 2024, according to an e-copy of the company’s annual report obtained by PUNCH Online.
The report revealed that while Jumia’s operating loss decreased by 71% year-over-year and by 79% in constant currency compared to the first quarter of 2023, the loss before income tax increased by 36% year-over-year, driven largely by an $11 million rise in net foreign exchange losses. This increase was attributed to currency devaluations in Nigeria and Egypt, as well as higher finance costs related to treasury and investment portfolio management activities.
However, Jumia experienced growth in revenue, which reached $49 million, marking a 19% year-over-year increase and a 57% rise in constant currency. The gross merchandise volume (GMV) also saw growth, reaching $181 million, up 5% year-over-year and 39% in constant currency.
The company attributed this growth to the sales of high-value items such as electronics and home furnishings, despite facing challenges posed by foreign exchange fluctuations.
Despite the volatile economic landscape, Jumia expressed its commitment to navigating challenges and capitalizing on long-term growth opportunities in Africa’s e-commerce sector. The company highlighted its efforts to strengthen its core business, improve cash efficiency, and streamline its logistics network to reduce quarterly cash burn.
Additionally, JumiaPay transactions reached 2 million, marking a 52% year-over-year increase, driven by the successful rollout of JumiaPay on delivery in one of its largest markets. The continued rollout of JumiaPay on delivery is aimed at increasing cashless orders and enhancing the user experience on Jumia’s platform.
Commenting on the financial results, Jumia’s CEO, Francis Dufay, acknowledged the challenging macroeconomic environment in Africa but expressed optimism about the company’s performance. He noted early signs of stabilization in select markets and emphasized Jumia’s value proposition in driving order growth in Nigeria and Ghana.
Dufay expressed satisfaction with the company’s progress and remained confident in Jumia’s potential for future growth, emphasizing the importance of a targeted growth strategy and deep understanding of the African e-commerce market. He concluded by remarking that growth does not necessarily require heavy spending but rather strategic focus and market understanding.