Berlin-based Jumia Technologies AG is managing a mix of growth opportunity and financial pressures as it grows its ecommerce marketplace, payments and logistics technology and services business in 10 countries across Africa.

Francis Dufay, CEO, Jumia Technologies AG

For the second quarter ended June 30, Jumia said its revenue fell 17% year over year to $36.5 million in reported U.S. dollars as gross merchandise volume dropped 5% to $170 million across its African operations.

But constant currency figures tell a different story: revenue rose 15.2% to $50.7 million, and GMV soared 35% to $241.8 million.

Jumia expands order pick-up to boost sales

CEO Francis Dufay says Jumia is taking several steps to improve the online customer experience, including the expansion of order pick-up locations and improving marketing spend to both retain existing customers and acquire new ones.

“Our strategy is focused around three key pillars,” he said on the second quarter earnings call. “First, refocusing and recommitting to the African ecommerce market. Second, improving cash efficiency. And third, building a stronger consumer value proposition tailored to the needs and purchasing power of the African consumers.”

Noting that GMV improved 35% year-over-year in constant currency, he added:  “We delivered GMV growth in reported currency in six of our countries in the second quarter, up from five in the first quarter of 2024, a sign that the Jumia value proposition continues to resonate with the African consumer.”

The company serves online markets in ten countries in Africa: Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Nigeria, Senegal, Tunisia and Uganda.

In 2023, Jumia said 5.7 million active customers across Africa placed 21.3 million orders for over 220 million products sold by over 64,000 active sellers.

Jumia also has locations in China and Portugal, according to its website, but it made no mention of those markets in its Q2 report or earnings call.

Jumia notes sharp growth in Ghana and Ivory Coast

Dufay noted that GMV showed exceptional growth in some African markets, including West Africa’s Ghana and Cote d’Ivoire (Ivory Coast).

“For example, in Ghana, GMV grew 116.4% year-over-year in constant currency and was up 72.1% year-over-year in USD,” he said. “This further validates that our strategy and value proposition are well suited to navigate the unique African market dynamics.”

In Cote d’Ivoire, he said Jumia has implemented several tactics to strengthen the consumer value proposition, including providing an enhanced assortment of goods and services with a view to capturing and retaining more loyal customers.

“As a result, we achieved a 46%, 90-day repurchase rate from Q1 ’24 new customers. As we expand these efforts across all of our markets, we expect to see Group level repurchase rates improve.”

Jumia is growing its number of order pickup locations to foster online sales.

Dufay said Jumia is increasing sales in rural areas, partly by expanding its network of pick-up locations outside of major cities. He noted that orders in rural areas outside of major cities grew to at least half of total orders in several countries, including Cote d’Ivorie, Nigeria and Kenya.

To maintain a steady base of merchandise sellers, he said Jumia has maintained a “fairly stable” schedule of marketplace commissions over the past year and a half to “incentivize them to bring more supply to our platform and we can enhance our assortment and value proposition.”

Jumia projects an increase in both orders and GMV in 2024, excluding the potential impact of foreign exchange.

“We’re working within countries with over 600 million people, so we can have a much bigger customer base and definitely new customers acquisition will be an important topic for us in the coming quarters,” he said.

Jumia’s gross profit 34.5% in constant currency

For the second quarter ended June 30s, Jumia reported:

⦁ Revenue from first-party sales was $16.1 million, down 23.8% year over year and up 4% on a constant currency basis, primarily driven by a decrease in corporate sales in Egypt.

⦁ Gross profit for the quarter was $21.6 million, down 5.7% but up 34.5% on a constant currency basis. Gross profit margin as a percentage of GMV remained relatively stable at 12.7% compared to 12.8%.

⦁ Quarterly “cash burn” (related to cash and cash equivalents) declined 55%, or $10.4 million, quarter-over-quarter to $8.7 million.

⦁ Adjusted EBITDA loss, which excludes finance costs, narrowed by 10.2% to $16.3 million.

⦁ Two new warehouses, one in Nigeria and another in Morocco, “to further consolidate operations, expand storage capacity, improve productivity, and enhance our supply chain management capabilities. Additionally, we expect to open new warehouses in Egypt and Cote d’Ivoire in the coming weeks.”

For the first half ended June 30:

⦁ Revenue fell 0.1% year over year to $85.4 million but in constant currency rose 35.4% to $115.5 million.

⦁ GMV dropped 0.2% to $351.6 million but increased 36.8% in constant currency to $482.1 million.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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