E-commerce powerhouse Jumia recently released its financial report for the third quarter of 2024, revealing operating losses of $20.1 million. This represents a 10% increase in losses compared to the same period last year, largely attributed to challenging macroeconomic conditions in key markets that have continued to impact the company’s revenues.
The company’s stock ($JMIA) is currently trading at $4.16, reflecting a significant decline in market capitalization to $501.49 million. This marks a stark contrast from July 2024 when Jumia’s valuation reached $1.32 billion amidst renewed investor confidence.
Despite the decline in revenue to $36.4 million in Q3 2024, down from $45 million in the previous year, Jumia remains focused on operational improvements. The company highlighted significant steps taken during the quarter, such as enhancements to its logistics network and the opening of a new warehouse in Lagos, Nigeria, in June 2024.
CEO Francis Dufay emphasized the importance of these operational changes, acknowledging the short-term impact on expenses while positioning the company for scalable growth and profitability. Jumia’s liquidity position has also improved, with $164.6 million in liquidity following the sale of 20 million ordinary shares in August.
JumiaPay, the company’s embedded finance platform, achieved a transaction volume of 3 million as Jumia continues to prioritize cashless payment solutions. Looking ahead, Dufay reiterated the company’s commitment to disciplined operations management and sustainable growth, leveraging the recent capital raise to accelerate their trajectory.
Under Dufay’s leadership since 2022, Jumia has implemented strategic initiatives to enhance cost-efficiency, including workforce reductions and scaling back operations in underperforming markets. Operating losses have seen a notable reduction, with a 71% decrease in Q1 2024 and an 8% year-on-year reduction in losses by Q2 2024.
In line with its cost-efficiency strategy, Jumia announced plans to exit its South Africa and Tunisia markets by year-end due to underperformance. The company is refocusing operations in its remaining nine markets and considering asset sales in South Africa and Tunisia to align with its goal of achieving profitability.
These developments mark a significant turnaround for Jumia as it navigates challenging market conditions and continues to drive growth and efficiency under new leadership. The company’s strategic focus on sustainable, profitable growth positions it for long-term success in the competitive e-commerce landscape.
