Jumia, an eCommerce platform, reported a $48.9 million revenue increase and a gross profit of $31.2 million in the first quarter of 2024, compared to $41.3 million and $24.9 million in the first quarter of 2023.
Significantly, Jumia’s operating loss fell 71% year-on-year to $8.3 million from $28.4 million in Q1 2023 due to significant cost reductions and increased gross margins.
The company stated that its order and average order value (AOV) grew, with order growth in Nigeria and Ghana, despite volatile conditions.
Despite a challenging macroeconomic environment in Africa, including currency devaluations in some of its largest markets, Jumia secured sufficient inventory and offered a diverse product assortment at competitive prices, keeping customers engaged on its platform, according to Jumia CEO Francis Dufay.
The CEO also stated that the company’s cash burn was $19.1 million, down from $22.0 million in Q1 2023, due to disciplined expense management and further streamlining of the logistics network. Cash burn refers to using Jumia’s liquidity position, which includes cash, cash equivalents, and other financial assets.
Among other things, Jumia stated that lower customer discounts helped attract a more loyal and high-quality customer base.
While the CEO stated that orders increased in some of its major markets, orders on Jumia fell by 22% in 2023 due to high inflation and currency depreciation. The company’s orders fell by 22%, from 27.5 million in 2022 to 21.3 million in 2023.
Meanwhile, Dufay emphasized that the company is off to a strong start and reiterated its strategic priorities, focusing on establishing a leaner organization ready for growth. In 2022, Jumia laid off 20% of its workforce, affecting about 900 people, and in 2023, it closed down Jumia Food in Nigeria.
In addition, JumiaPay transactions surpassed 2.0 million, a 52% increase driven by the rollout of JumiaPay on delivery in one of Jumia’s largest markets, the company stated.
Furthermore, Jumia intends to continue reducing its losses despite a 71% decline. It said it is still committed to reducing losses and accelerating its progress towards cash efficiency and profitable growth.
Looking ahead, Jumia intends to further reduce its cash utilization compared to the fiscal year 2023. It also projects an increase in both orders and GMV in 2024.
