E-commerce platform, Jumia Technologies AG, has announced a decline in its operating loss by eight per cent year-over-year to $20.2m despite economic challenges.
Jumia in a statement provided an explanation of the effects of the unstable economic environment on its business operations.
These effects included a drop in revenue and a marginal drop in gross merchandise value, according to The Punch.
Jumia said that its second quarter 2024 revenue dropped by 17% to $36.5 million. However, revenue rised 15% on constant currency basis.
The e-commerce company attributed the figures to a robust underlying performance despite currency devaluations in key markets.
For Jumia’s gross merchandise value, the company reported a 35 per cent growth in constant currency, though it decreased by five per cent to $170.1m.
Jumia reported that its strategic cost control measures produced significant outcomes, such as an 8% year-over-year decline in operating loss to $20.2 million, a 10% fall in adjusted EBITDA loss to $16.3 million, and a 7% reduction in cash burn to $8.7 million.
“This efficiency was partly achieved through a 19 per cent reduction in marketing expenses, with a focus on high-return channels like CRM, SEO, and targeted offline initiatives,” the firm stated.
According to Jumia, its initiatives to improve customer value and experience have resulted in a 7% year-over-year growth in orders and a 31% increase in JumiaPay transactions, which have been fueled by strategic cashback promotions and increased JumiaPay on delivery penetration.
The company in a bid to expand its logistics network opened new facilities in Nigeria and Morocco to support its asset-light business model.
Meanwhile, Jumia stated that regional currency devaluations affected its GMV and total payment volume, which declined by 7 per cent.
Jumia announced that, among other things, it had terminated deal with Mastercard Asia/Pacific in order to explore more expansive alliances with other payment service providers to strengthen JumiaPay.
The company noted that its strategic focus led to a 6 per cent quarter-over-quarter increase in quarterly active customers and an improved 90-day repurchase rate for new customers by 262 basis points to 36 per cent.
Jumia reaffirmed its commitment to cutting losses and moving toward profitability with plans to further improve cash efficiency and aim lower cash utilization than in FY 2023.
