Jumia, Africa’s prominent online retailer reported a challenging third quarter 2024, marked by persistent operational losses, and a hunt for profitability that has long proven elusive.
Sales and Advertising expenses remained flat year-over-year, while revenue declined to $36.4 million, down 13% year-over-year.
Third-quarter revenue was primarily driven by commissions from third-party corporate sales in Egypt, partially offset by the impact of foreign exchange devaluations.
“We saw growth in both quarterly active customers, up 1% year-over-year, and Orders, up 4% over the prior year, as we continue to focus on diversifying our supply and strengthening the Jumia value proposition,” said CEO Francis Dufay. “We are encouraged to see continued resilience in our usage and business fundamentals despite the significant first quarter currency depreciation headwinds in Nigeria and Egypt.”
Currency depreciation in key markets like Nigeria and Egypt remained a persistent problem since the first quarter of 2024. The value of total orders (GMV) declined to $162.9 million despite the number of orders increasing to 5.9 million.
Key takeaways:
- Jumia’s reported revenue of $36.4 million for Q3 2024
- Operational losses grew to $20.1 million
- Quarterly active users stay stable at 2 million
Going forward, the company will only focus on promising markets and opportunities. In October 2024, Jumia announced a decision to close shop in South Africa and Tunisia by the end of 2024. Additionally, Jumia will scale its logistics network, expand overall assortments and customer acquisition.
This quarter, the total number of customers Jumia attracted is flat at 2 million compared to September 2023. It will continue to leverage its JForce network, and digital marketing efforts like SEO to retain customers.
To improve its financial performance, Jumia has taken several steps, including exiting non-core markets and raising capital through a secondary share offering. However, achieving profitability remains a significant challenge due to ongoing economic uncertainties.
Regarding cash efficiency, Jumia has a cash balance of $85.8 million and a liquidity position of $164.6 million. The company said this increase in the third quarter of 2024 was primarily driven by the proceeds from the Company’s recently completed ATM offering. The net proceeds from the offering were $94.7 million after accounting for all equity transaction costs.
Another positive aspect of its report is the growth in JumiaPay transactions which reached $3 million in the third quarter of 2024, up 10% year-over-year. The growth was driven by increased penetration of JumiaPay on delivery in the third quarter of 2024. There are ongoing efforts to streamline the user experience and the continued rollout of JumiaPay on delivery, positioning the payment arm as an enabler of the company’s e-commerce architecture.
Jumia’s share price has grown 43% year to date, in a rally that impressed Wall Street analysts and earned the company renewed shareholder confidence. The stock currently trades at $4.82 at the time of this report, enjoying a jolly ride following President Donald Trump’s second ascendancy to the presidency.
