Inflation hits Jumia, as orders for products drop by 36.5% within one year

Inflation is getting worse in Jumia’s main operational markets, including Nigeria, Ghana, and Egypt, as seen by the company’s Q2 2023 financial figures, which indicate a 28.1% reduction in customer base.

According to the corporation, the number of active users fell from 3.4 million in Q2 2022 to 2.4 million in Q2 2023, a 1 million year-over-year reduction. The value of items sold on Jumia’s platform, or its gross merchandise value (GMV), decreased by 25.1% from $271.1 million in Q2 2022 to $202.3 million in Q2 2023.

The financial report states that orders placed on the site for products decreased by 36.5% as well. In Q2 of this year, there were 6.5 million orders as opposed to 10.3 million in Q2 of 2022.

Read Also: Jumia sacks 900 workers, closes businesses amid $49.8m loss

Despite the decline in revenue and customer numbers, the Jumia Group’s CEO, Francis Dufay, said the company is making progress in its bid to reduce losses. Commenting on the Q2 financials, Dufay said:

“We continue to deliver strongly on our overriding objective of loss reduction and progress towards profitability. In the second quarter of 2023, both Adjusted EBITDA and Operating losses decreased by 66% year-over-year, reaching the lowest loss levels in over 4 years.

“Considering this strong progress, we are updating our Adjusted EBITDA loss guidance for the full year 2023 to $90-100 million, compared to $100-120 million previously.

“We are navigating challenging macro conditions with discipline and focus, doubling down on our efficiency efforts. Compared to the second quarter of 2022, Fulfillment Sales & Advertising expenses were down 50% and 74%, respectively.

“We are also starting to reap the benefits of our actions on overhead costs with G&A excluding share-based compensation decreasing by a third year-over-year, reaching a 4-year low at $17.7 million.”

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