E-commerce company Jumia has reported a significant reduction in its losses for the first nine months of 2024, reflecting its ongoing strategic shifts aimed at achieving long-term profitability.
The company’s losses narrowed to $48.7 million for the period ending September 2024, down from $68.8 million in the same period last year. This improvement comes as Jumia adjusts its operational model, focusing on cost-cutting measures and boosting efficiencies. Key changes include streamlining its logistics network and consolidating its warehouse operations, which have allowed the company to expand its supply capacity and improve service delivery.
Despite these positive operational shifts, Jumia continues to face substantial macroeconomic headwinds, particularly from currency devaluations in key markets such as Nigeria and Egypt. These challenges have impacted the company’s financial performance, particularly in terms of its gross merchandise volume (GMV) and overall revenue.
For the nine months ended September 2024, Jumia reported total revenue of $121.8 million, a slight decrease from $127 million in the same period in 2023. However, the company’s gross profit increased to $75.6 million, up from $70 million in 2023, underscoring the positive impact of its cost-saving initiatives.
Jumia’s CEO, Francis Dufay, expressed optimism in the company’s ability to weather these challenges. “We are encouraged to see continued resilience in our usage and business fundamentals despite the significant currency depreciation in Nigeria and Egypt,” Dufay said in a statement accompanying the financial results. He further emphasized that Jumia’s operational adjustments are designed to foster scalable growth, which the company expects to drive profitability in the near future.
A key component of Jumia’s strategy involves a refocused market approach, including the decision to cease operations in South Africa and Tunisia. This strategic retreat reduces Jumia’s presence from 11 countries to 9, enabling the company to concentrate resources on markets with stronger growth potential.
“While these changes may have short-term impacts on our operations, we believe they will position Jumia for sustainable, profitable growth in the long run,” Dufay commented. The company also highlighted the successful capital raise earlier this year, which will support its expansion efforts and further solidify its financial position as it continues its journey towards profitability.
As Jumia adapts to the evolving e-commerce landscape, its efforts to balance cost control with market expansion reflect a broader trend within the industry as companies navigate global economic uncertainties while aiming for sustainable growth.