One of Africa’s most prominent e-commerce companies, Jumia, made progress in the second quarter of 2024, cutting its losses significantly as it works on its goal of becoming profitable. It reduced its cash burn, and cut sales and marketing costs but saw revenue decline to $36.5 million.

Jumia, which has enjoyed a market rally that has seen its valuation hit over $1.3 billion over the last three weeks, narrowed total losses for the quarter to $19 million (compared to $38million in Q2 2023).

“Our performance this quarter reinforces our belief that our strategy is working,” said CEO Francis Dufay. “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.” 

Currency depreciation in key markets continued to be a persistent problem, with the value of total orders declining to $170 million despite the number of orders increasing to 4.8 million. The company hopes to  diversify its  product assortment to appeal to more customers while leveraging its JForce network.

Third-party commissions in corporate sales to local and regional retailers, distributors, and other corporate buyers, grew revenue.

Operating across 11 African countries, Jumia has been navigating a challenging economic landscape. While the company’s cost-reduction measures have yielded positive results, achieving sustained profitability will hinge on its ability to overcome macroeconomic hurdles.

Key takeaways:

Jumia’s reported revenue of $36.5 million for the quarter

It reduced operational losses to $20.2 million 

Quarterly active users stay stable at 2 million 

“Based on the positive impact of its growth strategy, Jumia projects an increase in both orders and GMV in 2024, excluding the potential impact of foreign exchange,” the company said. 

The company claimed that its efforts to attract a stickier customer base via search engine optimization (SEO) and customer relationship management (CRM) has paid off. 

“These efforts delivered a 6% sequential increase in our active customer count and continued improvements in our 90-day repurchase rate.”

Regarding cash efficiency, Jumia has a cash balance of $45.1 million and a liquidity position of $92.8 million.  The company said 67% of its Liquidity Position was held in USD, helping to limit Jumia’s exposure to shifts in local currency valuations and refine its cash repatriation strategy.

Another positive aspect of its report is the growth in JumiaPay transactions which reached $1.9 million in the second quarter of 2024, up 30% year-over-year. The growth was driven by increased penetration of JumiaPay on delivery and the implementation of cashback campaigns and incentives conducted in the second quarter of 2024. 

The company implemented JumiaPay as the primary receiver of transactions on the company’s e-commerce platform. In addition, Jumia terminated its commercial agreement with Mastercard Asia/Pacific in June 2024. While JumiaPay will continue to accept Mastercard as a method of payment, the termination will allow Jumia to broaden and deepen its relationship with other payment services providers.

Over the past months, Jumia’s share price has grown 252%, in a rally that impressed Wall Street analysts and earned the company renewed shareholder confidence. The stock currently trades at $10.59 at the time of this report, down nearly 100% caused by the effect of global carry trades jolting markets around the world.