Jumia, Africa’s leading e-commerce platform, faced an operating loss of $20.1 million in Q3 2024, marking a 10% increase from the previous year as it struggled with economic challenges across key markets. Revenue for the quarter also fell to $36.4 million, down from $45 million a year earlier, while the company’s stock is currently trading at $4.16, reducing its market cap to $501.49 million from its July 2024 high of $1.32 billion.
Despite these losses, Jumia remains optimistic, stressing its commitment to operational improvements. In recent months, the company has made several strategic moves, including revamping its logistics network and consolidating its warehouse operations to boost efficiency. In June, Jumia launched a new warehouse in Lagos, Nigeria, a move which CEO Francis Dufay believes will pave the way for sustainable growth. “While these adjustments have impacted operations in the short term, we are confident they will support our goal of profitable growth,” Dufay noted.
The company also moved to boost its liquidity with a capital increase after selling 20 million shares in August, improving its financial position to $164.6 million. Alongside, Jumia’s financial services platform, JumiaPay, processed over 3 million transactions in Q3, indicating a growing adoption of digital payments across its markets.
In line with its new cost-efficient approach, Jumia announced in October that it would exit its South Africa and Tunisia operations by year-end, citing underperformance in these regions, which collectively contributed only 2% of customer orders and 3% of gross merchandise value (GMV). Moving forward, Jumia aims to refocus its resources on its stronger markets within Africa and potentially divest its assets in these exiting markets.
CEO Dufay has been restructuring Jumia since 2022 to prioritize profitability, resulting in earlier improvements such as a 71% reduction in operating losses by Q1 2024 and an 8% year-on-year decrease by Q2 2024. The company remains committed to disciplined growth strategies, with plans to optimize operations while avoiding overspending, a direction which, it hopes, will eventually lead to long-term profitability in the $15 billion ecommerce market.
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