By Joy Baba-Yesufu
Jumia, a leading African e-commerce platform, has said that it is beginning to observe early signs of growth, despite loosing $8m in the first quarter of 2024.
An e-copy of the company’s annual report, Online on Wednesday, revealed operating loss was $8m, compared to $28m in the first quarter of 2023, down by 71 per cent year-over-year, and down 79 per cent in constant currency.
The financial results for the three months ended March 31, 2024, showed that the company’s loss before income tax increased by 36 per cent year-over-year and by 12 per cent in constant currency, largely driven by an $11m increase in net foreign exchange losses.
Jumia attributed this to currency devaluations in Nigeria and Egypt and an increase in finance costs related to Jumia’s treasury and investment portfolio management activities.
However, the e-commerce giant’s revenue grew to $49m, up 19 per cent year-over-year and 57 per cent in constant currency. While its gross merchandise volume stood at $181m, up 5 per cent year-over-year and 39 per cent in constant currency.
The company said the growth was due to the sales of high-value items like electronics and home furnishings, although it was partially offset by the impact of foreign exchange.
Despite these challenges, Jumia expressed that it was committed to navigating the volatile economic landscape and capitalizing on the long-term growth opportunities in Africa’s e-commerce sector.
“Jumia is off to a strong start to the year. Following a transformational 2023, we continued to execute against our strategic priorities focused on strengthening our core business and improving cash efficiency while establishing a leaner organization primed for growth.
“Our efforts drove a 5 per cent year-over-year and 39 per cent constant-currency improvement in GMV in the quarter, while order growth and AOV also expanded, a clear sign that our strategy is working.
“Disciplined expense management and further streamlining of our logistics network reduced our quarterly cash burn to $19.1m from $22m in the first quarter of 2023,” Jumia noted in the report
Another notable positive in the report is that JumiaPay transactions reached 2 million, an increase of 52 per cent year-over-year driven by the successful rollout of JumiaPay on delivery in one of Jumia’s largest markets.
Jumia said there were ongoing efforts to streamline the user experience, and the continued rollout of JumiaPay on delivery to increase cashless orders positions JumiaPay as a stronger enabler of the company’s e-commerce platform.
