Jumia Struggles to Stay Afloat Amid Market Exits and Currency Woes

Jumia, Africa’s largest e-commerce platform, has seen yet another turbulent year in 2024 as economic headwinds and shifting consumer trends took a toll on its financial performance. Currency devaluations in Nigeria and Egypt—two of its most significant markets—eroded revenue, while rising fulfilment costs and changing shopping habits squeezed margins. Despite ongoing cost-cutting efforts, the company remained in the red, reporting a $64.7 million annual loss.

The platform’s gross merchandise value (GMV)—a key indicator of transaction volume—declined by 4% year-over-year to $720 million when measured in reported currency. However, when adjusted for currency fluctuations, GMV rose 28%. Revenue experienced a similar contrast, dropping 10% to $167.5 million but showing a 17% increase in constant currency terms.

Jumia’s marketplace revenue, primarily from third-party sellers, plummeted 31%, while first-party sales declined by 14%. Meanwhile, gross margins shrank by 12%, reflecting weaker unit economics. While advertising and sales expenses were slashed by 24% as part of the company’s efficiency drive, fulfilment costs climbed 11% due to a rise in order volume, further pressuring margins.

The e-commerce giant expanded into smaller urban centres across its core markets, with these regions now accounting for 56% of total orders. However, this growth brought a surge in low-value transactions, dragging down overall GMV. Additionally, a sharp decline in high-margin corporate sales in Egypt added to the company’s financial strain.

Jumia also made the tough call to exit South Africa and Tunisia, streamlining operations but incurring $10 million in one-time expenses. This downsizing contributed to a drop in total customer numbers, with Jumia’s active user base falling from 10 million in 2023 to 8.3 million in 2024. However, quarterly active users showed a modest increase to 2.4 million by December, up from 2.3 million, while the company’s customer repurchase rate climbed to 40%, suggesting improved retention.

The company wrapped up the year with $133.9 million in cash, offering a liquidity cushion but also underscoring the urgency of careful financial management amid persistent losses and currency volatility. One significant cash drain was $13.5 million in supplier prepayments, contributing to Jumia’s cash burn. If losses continue, the company may be forced to seek additional funding or ramp up efficiency measures to extend its financial runway.

On a more positive note, JumiaPay transactions surged 11% year-over-year, hitting 3.3 million by the end of 2024. The platform’s growing adoption for food and product deliveries reinforces its long-term bet on embedded financial services. CEO Francis Dufay remains committed to driving cashless transactions, positioning JumiaPay as a crucial growth driver. However, competition is fierce, with fintech heavyweights like Flutterwave, Opay, and MTN’s MoMo dominating the digital payments space across Jumia’s key markets.

Looking ahead to 2025, the company is expected to continue prioritising cost-cutting while refining its business model in core markets. Industry analysts caution that profitability remains elusive unless Jumia can significantly boost customer spending or lower fulfilment expenses.

“As we look ahead to 2025, I am optimistic about Jumia’s future,” said CEO Francis Dufay. “The business is stronger and more efficient than it was just two years ago, and I believe we have a good opportunity ahead by driving top-line growth and improving operational efficiencies.”