Jumia, the leading African ecommerce platform that operates in eleven markets of the region, including four in North Africa, reported a 68 percent year-over-year reduction in its losses for 2023. Its adjusted EBITDA reduced from $182 million in 2022 to $58 million in 2023.
But the firm also witnessed declines across orders, gross merchandise value (GMV), and revenue compared to the previous year.
Orders plummeted by 22 percent, dropping from 27.5 million in 2022 to 21.3 million in 2023. GMV experienced a significant decline of 20 percent, decreasing from $943 million to $750 million. Revenue also saw a notable decrease of 8 percent, falling from $245 million to $186 million.
The company attributes the decline in these metrics to broader economic challenges and its own strategic choices. Economic challenges like inflation and currency devaluation have reduced purchasing power of customers across different Jumia markets. The company also reduced spending on marketing, customer incentives, and promotions, resulting in a drop in orders.
Francis Dufay, the CEO of Jumia, in a statement, said, “Although GMV for the full year of 2023 declined by 20% and Orders by 22% year-over-year, we have undergone a deep transformation of the company. We believe that this transformation will enable us to achieve growth again during 2024, with improved unit economics and lower cash utilization.”
The company executive also addressed the recent shut down of Jumia’s food delivery business in his statement, “We believe that Jumia is now a much leaner, more agile and more focused company. We have reevaluated our portfolio and made tough decisions regarding business activities that did not bring the right value. Recently, we discontinued our food delivery operations as we concluded that the growth prospects did not justify the complexity it created.”
“We believe our focus and resources will be better invested in our physical goods business, where we see more opportunity for revenue growth and higher margins,” he added.
Since announcing earnings on February 15, Jumia’s stock price has increased by 33 percent to $4.3, giving the company a market cap of $433 million.
