Jumia, Africa’s leading e-commerce platform, reported a significant drop in revenue and increased operating losses for Q2 2024.
The company’s revenue fell 25 per cent from the previous quarter to $36.5 million, marking a 17 per cent decline compared to last year. Operating losses rose to $20.2 million, though this was an 8 per cent improvement from the $22.1 million loss in Q2 2023.
The Gross Merchandise Value (GMV), which measures total customer payments before deductions, also declined by 5 per cent year-over-year to $170.1 million. Jumia’s gross profit saw a 6 per cent drop from last year, falling to $21.6 million.
Jumia CEO Francis Dufay expressed confidence in the company’s strategy, highlighting their efforts to cut costs and focus on physical goods. Since taking over in 2023, Dufay has implemented cost-cutting measures, including reducing marketing expenses and discontinuing Jumia Foods. Despite these efforts, sales and advertising expenses increased from $3.7 million in Q1 to $4.4 million in Q2.
36 per cent of new customers were said to be making a second purchase within 90 days in Q1 2024. The company also reported a 7 per cent increase in orders compared to last year’s period, averaging 2.1 per customer.
JumiaPay, the company’s fintech arm, saw transactions rise by 31% year-over-year, driven by increased use and cashback incentives. Former PalmPay executive Anthony Mbagwu was recently appointed to lead JumiaPay. Despite the positive outlook, Jumia faces potential regulatory challenges as the Nigerian government considers new regulations for e-commerce platforms.
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