Jumia reduces operating loss by over 60% as revenue declines
TLDR
- Jumia's operating loss decreased by 64% to $73 million due to strategic cost-cutting decisions.
- The company experienced a 20% decline in GMV, amounting to $750 million, due to currency devaluation.
- Despite setbacks, Jumia remains optimistic about profitability after implementing transformation policies, including reducing workforce and discontinuing unprofitable ventures like Jumia Food.
Jumia, Africa's e-commerce company listed in New York, has disclosed its full-year 2023 earnings, revealing a 64% decrease in operating loss year-over-year to $73 million helped by a slew of strategic cost-cutting decisions.
However, the company experienced a 20% decline in Gross Merchandise Value (GMV), totaling $750 million, attributed to currency devaluation across markets. This led to an 8% reduction in revenue, amounting to $186 million.
Despite these setbacks, Jumia remains optimistic about its path to profitability, citing positive outcomes from transformation policies implemented last year. These measures included reducing its workforce and discontinuing its unprofitable food business, Jumia Food.
Key Takeaways
Following Jumia's release of its fourth-quarter 2023 financial results, the stock market responded positively, with shares of the Africa-focused e-commerce company soaring to $4.56 on Thursday, marking a remarkable 41.18% increase. Jumia's recent performance is in line with its strategy to fortify foundational elements for growth in core categories. Notably, there has been a significant reduction in active customers and orders compared to the previous year, a deliberate outcome of the company's strategic streamlining initiatives initiated in Q4 2022. Jumia intentionally opted to recalibrate its product and service portfolio, which included suspending its first-party grocery offering, logistics-as-a-service, and food delivery operations in specific crucial markets where economic viability was deemed unsustainable.
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