In 2024, Jumia, a leading e-commerce platform in Africa, faced challenges due to currency devaluations in Nigeria and Egypt, impacting its revenue and margins. Despite efforts to cut costs, the company reported a loss of $64.7 million for the year.
The gross merchandise value (GMV) on Jumia’s platform declined by 4% to $720 million in reported currency but increased by 28% in constant currency. Revenue also dropped by 10% to $167.5 million but grew by 17% in constant currency.
Marketplace revenue from third-party sellers decreased by 31%, while first-party sales fell by 14%. Gross margins contracted by 12% due to weaker unit economics.
While advertising and sales expenses decreased by 24%, fulfilment costs rose by 11% as orders surged, putting pressure on margins. Jumia expanded into smaller urban centers, where it now generates the majority of its total orders, but this led to a higher volume of low-value transactions, contributing to the GMV decline.
The company’s active customer base decreased to 8.3 million, with a slight increase in quarterly active users and an improved customer repurchase rate. Jumia closed the year with $133.9 million in cash but faced challenges with supplier prepayments affecting its operating cash flow.
JumiaPay transactions grew by 11% year-over-year, reaching $3.3 million by December 2024. CEO Francis Dufay emphasized the importance of cashless transactions through JumiaPay for future growth, despite competition from other fintech players in key markets.
Looking ahead to 2025, Jumia plans to continue cost-cutting and focus on improving unit economics in key markets to drive profitability. The company’s ability to manage cash effectively, refine its marketplace model, and grow high-margin segments will be crucial for achieving sustainable profitability.