Jumia cuts operating losses by 71% to $8.3m in Q1 as sales grow

STARTUP VENTURE CAPITALMay 12, 2024 at 4:43 PM UTC

TLDR

Jumia's Q1 2024 operating losses reduced by 71% to $8.3 million through cost-cutting and improved gross margins.
Despite a 5% decline in active customer base, Jumia achieved a 19% year-on-year revenue growth to $49 million.
Jumia's gross merchandise value (GMV) increased by 5% year-on-year to $181 million, showcasing strong financial performance improvements.

In the first quarter (Q1) of 2024, African e-commerce Jumia, reported a reduction in operating losses, marking a 71% decrease to $8.3 million compared to $28 million recorded in the corresponding period of 2023.

The New York-listed company attributes the reduction in losses to cost-cutting measures and improved gross margins, underscoring its commitment to executing strategic plans aimed at enhancing financial performance.

Despite a 5% decline in its active customer base during the same quarter, Jumia achieved a 19% year-on-year revenue growth in Q1 2024, amounting to $49 million. The company's gross merchandise value (GMV), representing the total amount paid by customers before deductions, also saw a 5% surge year-on-year, reaching $181 million.

Key Takeaways

In Africa, despite facing a challenging macroeconomic environment characterized by currency devaluations in key markets, Jumia managed to secure ample inventory and provide a varied product selection at competitive prices, thereby maintaining customer engagement on its platform. To address its persistent losses and work towards profitability, Jumia implemented strategic measures in the fourth quarter (Q4) of 2022. This included a workforce reduction of 20%, resulting in the departure of 900 employees from the company. In addition, Jumia discontinued its unprofitable food business as part of its efforts to streamline operations and focus on more lucrative ventures.

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