E-commerce platform Jumia Technologies AG has announced an 8% reduction in its operating loss to $20.2 million year-over-year, despite navigating a challenging economic environment.
In a statement released on Thursday, Jumia detailed the effects of economic volatility on its performance, including a revenue decline and a slight decrease in gross merchandise value (GMV). The company reported a 17% drop in revenue to $36.5 million for Q2 2024, although revenue increased by 15% on a constant currency basis.
Jumia attributed these results to a strong underlying performance despite currency devaluations in key markets. The company’s GMV grew by 35% in constant currency terms but fell by 5% to $170.1 million in nominal terms. Jumia emphasized that its GMV performance reflected its successful focus on optimizing product offerings and improving customer engagement.
The company’s strategic cost management efforts resulted in significant financial improvements, including an 8% reduction in operating loss, a 10% decrease in adjusted EBITDA loss to $16.3 million, and a reduction in cash burn to $8.7 million. This efficiency was partly achieved through a 19% reduction in marketing expenses, concentrating on high-return channels like CRM, SEO, and targeted offline initiatives.
Jumia also noted a 7% increase in orders year-over-year and a 31% rise in JumiaPay transactions, driven by greater penetration of JumiaPay on delivery and strategic cashback campaigns. The company expanded its logistics network with new warehouses in Nigeria and Morocco to support its asset-light business model.
Despite regional currency devaluations impacting its GMV and total payment volume, which declined by 7%, Jumia mitigated some of these risks by holding 67% of its liquidity in USD. The company also ended its commercial agreement with Mastercard Asia/Pacific to explore new partnerships with other payment service providers to strengthen JumiaPay.
Jumia reported a 6% quarter-over-quarter increase in quarterly active customers and a 262 basis point improvement in the 90-day repurchase rate for new customers, reaching 36%. The company remains committed to reducing losses and driving towards profitability, with plans to enhance cash efficiency and further reduce cash utilization compared to FY 2023.
The launch of additional Buy Now Pay Later partnerships in Nigeria underscores Jumia’s commitment to strengthening its financial services offerings and improving consumer access to e-commerce.
“These initiatives, combined with disciplined financial management, position Jumia for continued growth,” the statement concluded.
