Africa’s e-commerce giant, Jumia has released its earnings statement for the full year 2023, reporting a 64% decline year on year in its operating loss to $73 million.
The company’s Gross Merchandise Value (GMV), which refers to the value of all goods bought on its platform, declined by 20% year-over-year to $750 million.
The company blamed the reduction on currency devaluation across markets. This resulted in an 8% decline in revenue for the e-commerce company to $186 million.
Despite the downturns, Jumia believes it is on the right track to profitability as the transformation policies implemented last year are yielding positive results.
Aside from the reduction of its employees, Jumia also stopped its unprofitable food business, Jumia Food last year.
Commenting on the results released on Thursday, Jumia Group’s Chief Executive Officer, Francis Dufay noted that high inflation rates and currency depreciation led to a scarcity of supply and have adversely impacted the purchasing power of customers.
- “Against that unsettling backdrop, we embarked on a fundamental transformation of our company to rapidly improve our financials and establish a stronger foundation for our e-commerce business. This transformation obviously came with a painful short-term impact, as we discontinued activities with poor growth prospects, stopped expensive marketing practices, and radically streamlined our organization.
- “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,” he said.
After shedding some weight in 2023 through layoffs and discontinuation of unprofitable businesses, Dufay said Jumia is now a much leaner, more agile, and more focused company to achieve its goals for 2024.
- “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.
- “We have achieved savings across the whole organization, by shrinking General and Administrative Expense as well as significantly improving operational efficiency. We believe that these changes are enabling better output and laying the foundations for growth in 2024. Smaller and more agile teams can concentrate effectively on key priorities and are benefiting from strategic alignment across all countries and functions,” he said.
Dufay is confident that the company will bring the business back to growth this year while further reducing its losses. He noted that the results of the recent quarters have shown clear steps towards Jumia’s strategic focus, positioning it for topline growth and improved cash utilization for 2024.
- “With the macro situation in several of our African markets starting to recover, we are confident that Jumia has never been in a better position to capture the unique opportunity of e-commerce in Africa,” Dufay said.