Jumia’s revenue and gross merchandise volume showed growth despite a decline in quarterly active customers, according to its Q1 2024 report. Revenue increased 19% year-over-year (57% at constant currencies) to $48.9 million, while GMV increased 5% year-over-year (39% at constant currencies) to $181 million.
The African e-retailer’s quarterly active customers, on the other hand, fell nearly 5% from 2 million to 1.9 million due to cost-cutting measures such as reduced customer incentives and free shipping spend. However, this measure resulted in a more stable and higher quality customer base with higher repeat purchase rates. Average order value increased 3% compared to the first quarter of 2023, reaching $39.6 million. Interestingly, despite the decline in its customer base, Jumia’s quarterly orders rose 1.9% to 4.6 million. Jumia attributes this growth to continuous improvements to its offering and product range.
“This quarter is special because we finally returned to GMV and order growth. For a year and a half, very few outsiders believed that we could grow Jumia again with these cuts in marketing, staffing, and everything else. But it turns out we can do it with lower marketing and logistics costs and G&A,” CEO Francis Dufay said in a phone call with TechCrunch. “I mean, there are a lot fewer people running the business at Jumia today. We have lost around 40% of the workforce since the end of 2022. And yet we continue to grow. So this is a very important achievement and we believe that we still have a lot of market potential in our markets that we can tap into.”
The e-commerce company says its revenue increase was driven by sales of larger ticket items such as electronics and home and living items, as well as higher commissions and corporate sales. Similarly, GMV growth reflects efforts to improve product assortment, conduct more efficient marketing spend and reduce customer incentives, with marketing spend declining 30% compared to the first quarter of 2023.
Additionally, this disciplined cost management and further streamlining of its logistics network reduced Jumia’s quarterly cash burn to $19.1 million from $22.0 million in the first quarter of 2023. As a result, operating loss and adjusted EBITDA loss for the quarter decreased 71% year-over-year, while revenue increased 83% year-over-year to $8 million and $4 million, respectively. This demonstrates the company’s continued efforts to significantly reduce costs and improve its gross margins until it reaches profitability.
A key driver in Jumia’s pursuit of profitability continues to be JumiaPay (the share of JumiaPay orders for physical goods increased from 20% to 32.5% in the first quarter of 2024). The continued rollout of JumiaPay for delivery in Nigeria and Kenya to increase cashless orders positions JumiaPay as a stronger enabler of its overall e-commerce platform; JumiaPay recorded transaction volume of 2 million in Q1 2024, a 52% year-on-year increase, and recorded total processing volume (TPV) growth of 10% year-on-year to $45.4 million in Q1 2024 .
Jumia, whose share price has risen 26% to $6.90 since its earnings announcement, reported that its liquidity position totaled $101.5 million in the first quarter of 2024, including $28.6 million in cash and cash equivalents and $72.8 million in time deposits and other financial assets. The company highlighted that 79% of its liquidity is denominated in US dollars, providing protection against fluctuations in local currency valuations (it suffered a cash loss of US$5.9 million during the year due to currency translation related to devaluations in Egypt). and Nigeria, two of its largest markets). Quarter).