Currency pressure drives Jumia’s revenue to $36.5mn in Q3’24

E-commerce giant Jumia has reported a 14 per cent decline in revenue, amounting to $36.5 million in the third quarter of 2024. The decrease in revenue has been attributed to currency depreciation in major markets such as Nigeria and Egypt. Despite this decline, Jumia witnessed a 6 per cent increase in the number of orders, indicating continued user interest and engagement. Francis Dufay, Group CEO of Jumia, shared insights into the company's recent performance and strategic decisions in an interview with CNBC Africa. Dufay highlighted the significant efforts Jumia has undertaken to reposition the business over the past two years. The company made several adjustments, including the consolidation of fulfilment centers in its four biggest markets. While these changes have created disruptions in day-to-day operations, they are expected to position Jumia favorably for 2025. One notable decision was the closure of Jumia's operations in South Africa and Tunisia. Despite the challenging conditions, Dufay explained that the move was necessary to enable the company to focus its resources on larger markets with better growth prospects. The South Africa and Tunisia markets accounted for a small percentage of orders and sales volumes, making it feasible for Jumia to reallocate its attention to other regions. The impact of currency depreciation in key markets like Nigeria and Egypt has posed challenges for Jumia. Dufay acknowledged that the devaluations have disrupted the market and affected top-line figures. In response, Jumia has adjusted its product assortment to cater to consumers with limited purchasing power. By securing a stable supply chain from importers, the company remains resilient in navigating the currency pressures. Despite the revenue decline, Jumia reported growth in its quarterly active customer base and orders. The Gross Merchandise Value (GMV) for the quarter saw a 1% decrease year-on-year but a significant 29% increase in constant currency. Dufay expressed optimism about the company's trajectory, emphasizing a trend of improving numbers on the usage side. He hinted at the potential for accelerated growth in the future, particularly in markets like Nigeria. The Nigerian market, although challenging due to inflation and economic uncertainty, presents vast opportunities for Jumia. Dufay remains optimistic about the company's prospects in Nigeria, highlighting the large consumer base and the potential for e-commerce expansion. Jumia has tailored its product offerings and delivery options to meet the needs of the middle class, even amidst inflationary pressures. By expanding into new cities and adapting its strategy, the company aims to serve a broader range of customers in Nigeria. In conclusion, Jumia's strategic realignment and resilience in the face of currency pressures position the company for future growth. Despite short-term challenges, the e-commerce giant remains focused on enhancing user experience, expanding its customer base, and delivering value in key markets like Nigeria.