Jumia, the e-commerce giant in Africa, has reported a significant decline in its customer base in Nigeria, Ghana, and Egypt, as inflation continues to take its toll on these major operating markets. The company’s Q2 2023 financial results reveal a staggering 28.1% decrease in active consumers compared to the same period last year, resulting in a loss of 1 million customers. The number of active consumers now stands at 2.4 million, down from 3.4 million.
Furthermore, Jumia’s Gross Merchandise Value (GMV), which represents the total value of goods sold on the platform, dropped by 25.1% from $271.1 million in Q2 2022 to $202.3 million in Q2 2023.
The company’s financial report, as obtained by Nairametrics, also indicates a significant decline in product orders on the platform, with a staggering 36.5% decrease. In Q2 2022, Jumia recorded 10.3 million orders, whereas in the same period this year, the number plummeted to 6.5 million.
Despite these alarming figures, Jumia Group’s CEO, Francis Dufay, remains upbeat about the company’s progress in reducing losses. Mr. Dufay stated, “We continue to deliver strongly on our overriding objective of loss reduction and progress towards profitability.”
In the second quarter of 2023, Jumia saw a remarkable improvement in its financial performance. Both Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and Operating losses decreased by 66% year-over-year, reaching the lowest levels in over four years.
As a result of this significant progress, the company has revised its Adjusted EBITDA loss for the full year 2023 to $90-100 million, compared to the previously anticipated range of $100-120 million. Jumia’s efficient management of Fulfillment, Sales & Advertising expenses has contributed to this achievement, with expenses in these areas showing a reduction of 50% and 74% respectively compared to the second quarter of 2022.
Moreover, the company’s proactive steps in reducing overhead costs have yielded positive outcomes. General and Administrative expenses, excluding share-based compensation, have decreased by a third year-over-year, reaching a four-year low at $17.7 million.
Jumia’s resilience in navigating challenging macroeconomic conditions, coupled with its commitment to efficiency, offers a glimmer of hope amidst the impact of inflation on its customer base. The company remains determined to overcome these hurdles and ultimately achieve sustainable profitability.
