Jumia’s revenue falls 25% in Q2 as operating losses rise to $20 Million less than it did during the same period last year.
Gross merchandise value also fell in Q2; it recorded a GMV of $170.1 million compared to $181 million in Q1. Its gross profit saw a 6% decline year-over-year to $21.6 million. Meanwhile, gross profit for the same period last year was $22.9 million.
Commenting on the performance, Francis Dufay, Jumia CEO, said, “Our performance this quarter reinforces our belief that our strategy is working. Our deep understanding of the African e-commerce market as well as our unique asset base and strategy position Jumia for growth as we progress on the path towards profitability.”
Since taking over as CEO in 2023, the African eCommerce pioneer has pursued a cost-cutting strategy that has seen it reduce marketing costs and shutter product lines as it narrowed its focus to physical goods. It shut down Jumia Foods in 2023, with Dufay reporting that it would help the company reduce losses.
Sales and advertising expenses
Regardless, sales and advertising expenses rose from $3.7 million in Q1 to $4.4 million in Q2 as the company pursues a mix of online and offline marketing strategies. These efforts appear to have resulted in increased customer loyalty. Thirty-six percent of new customers who made a purchase on Jumia in Q1 2024 completed a second purchase within 90 days.
See Also: Kenyan Mobility Startup Mobius to Shut Down
The share of physical goods orders driven by customer incentives dropped from 31% in Q2 2023 to 28% in Q2 2024, a 3-percentage-point decline. In Q2 2024, orders climbed 7% compared to the same period last year, with the company recording an average of 2.1 orders per customer.
Recall that in 2023, orders on Jumia dropped by 22%; however, the company projects that in 2024, it will see increased orders and GMV. Transactions on JumiaPay remain on the rise, experiencing 30.8% year-on-year growth. The fintech arm got new leadership with the hiring of ex-PalmPay executive Anthony Mbagwu.
While the company maintains a positive outlook, it may be faced with regulatory concerns as the Nigerian government considers developing regulations to guide the operations of eCommerce platforms.
