Jumia, the online retail platform, disclosed a revenue surge to $48.9 million and a gross profit of $31.2 million for the first quarter of 2024. These figures represent a notable increase from the $41.3 million in revenue and $24.9 million in gross profit reported in the same period of 2023. Notably, Jumia’s operating loss saw a substantial reduction of 71% to $8.3 million in the first quarter of 2024, down from $28.4 million in the first quarter of the previous year, attributed to significant cost savings and improved gross margins.
The company observed an uptick in orders and average order value, particularly in Nigeria and Ghana, despite challenging economic conditions. Jumia navigated through a tough macroeconomic landscape in Africa, including currency devaluations in some key markets, by maintaining adequate stock levels and offering a varied range of competitively priced products, thus retaining customer engagement on its platform, as per CEO Francis Dufay.
Dufay further mentioned that Jumia’s cash consumption was reduced to $19.1 million from the $22.0 million recorded in the first quarter of 2023, a decrease credited to stringent expense control and optimization of the logistics network. The term ‘cash burn’ is used to describe the depletion of Jumia’s available cash and financial resources.
Jumia also reported that offering fewer customer discounts has been instrumental in cultivating a more dedicated and higher-quality customer base.
Despite an increase in orders in some key markets as highlighted by the CEO, Jumia experienced a 22% decline in orders in 2023, a downturn attributed to the impacts of high inflation and currency devaluation. The company’s total orders decreased from 27.5 million in 2022 to 21.3 million in 2023.
CEO Francis Dufay underscored that Jumia has had a robust beginning to the year and reaffirmed the company’s strategic focus on building a more streamlined organization poised for expansion. In pursuit of this goal, Jumia reduced its workforce by 20% in 2022, which affected approximately 900 employees, and in 2023, it shut down its Jumia Food operations in Nigeria.
The company also highlighted the success of JumiaPay, noting that transactions exceeded 2.0 million, marking a 52% increase. This growth was partly fueled by the introduction of JumiaPay on delivery in one of its largest markets.
Moreover, Jumia is determined to continue diminishing its losses, building on the 71% reduction already achieved. The company remains steadfast in its commitment to curbing losses and advancing towards a state of cash efficiency and profitable growth.
Looking to the future, Jumia is set on further curtailing its cash consumption relative to the fiscal year 2023 and anticipates an uptick in both the number of orders and the Gross Merchandise Value (GMV) in 2024.
