Jumia Sees 31% Surge in JumiaPay Transactions as Loss Eases in Q2

By Aduragbemi Omiyale

Despite a volatile economic landscape, Africa’s leading e-commerce platform, Jumia Technologies, has continued to demonstrate resilience and strategic progress, with growth across its business operations.

In the second quarter of 2024, the company witnessed a 31 per cent increase in JumiaPay transactions, supported by the growing penetration of the payment platform on delivery and strategic cashback campaigns.

This growth may have also been propelled by the decision of Jumia to end its commercial agreement with Mastercard Asia/Pacific to strengthen JumiaPay’s position as a key pillar of its e-commerce ecosystem, ensuring a seamless and secure payment experience for customers.

Another critical component of Jumia’s asset-light business model, the logistics network, expanded in the period under review with new warehouses in Nigeria and Morocco.

These expansions were strategically done to increase storage capacity and improve supply chain management without significantly impacting the balance sheet due to a focus on leasing rather than owning facilities.

The results showed that the firm cut its operating loss by 8 per cent year-over-year to $20.2 million, with Adjusted EBITDA loss trimmed by 10 per cent to $16.3 million.

Notably, the company’s cash burn was cut by more than half, declining to $8.7 million, demonstrating a disciplined approach to expenditure and efficient use of resources. This was partly achieved through a 19 per cent reduction in marketing expenses, focusing on high-return channels like CRM, SEO, and targeted offline initiatives.

It was observed that despite a 17 per cent decline in reported revenue to $36.5 million, Jumia saw a 15 per cent increase on a constant currency basis.

The focus on enhancing customer value and experience continued to pay off, with orders rising by 7 per cent year-over-year, highlighting Jumia’s success in attracting and retaining high-quality customers.

Looking ahead, Jumia said it plans to continue its focus on cash efficiency, targeting further reductions in cash utilisation as compared with the 2023 financial year.

“With a renewed emphasis on expanding its supplier base, enhancing its logistics network, and leveraging innovative marketing and vendor technologies, Jumia is poised for continued growth,” the firm said in a statement.

It promised to strengthen its financial services offerings to facilitate greater consumer access to e-commerce, saying this was it launched additional BNPL partnerships in Nigeria.

“These initiatives, combined with the company's disciplined financial management, position Jumia to capitalize on the growing demand across African markets,” it noted.