Jumia Faces Q3 Deficits of $20.1M during Restructuring and Market Withdrawal Phase

Jumia Announces Exit from Underperforming Markets, Focuses on Scalable Growth

E-commerce giant Jumia has announced its decision to exit from its South Africa and Tunisia markets by the end of this year, due to underperformance in these regions. The move is part of a larger strategic shift for the company, aimed at optimizing resources and focusing on higher-growth markets.

The exited markets represented a small portion of Jumia's overall business, accounting for just 2% of customer orders and 3% of gross merchandise value (GMV) during the nine-month period ending in September. According to the company's Q3 2024 report, South Africa and Tunisia contributed 3.5% and 2.7% of total orders respectively to Jumia's overall business.

Jumia's CEO, Francis Dufay, stated that these changes have negatively impacted operations and expenses in Q3 2024 but are expected to position the company for scalable, profitable growth in the future. The company has reported a slight decline in GMV for Q3 2024, with a figure of $162.9 million, down from the same period in 2023. However, Jumia's revenue for the same quarter fell to $36.4 million, a significant drop from $45 million in the same quarter last year.

Despite the challenges, Jumia has reported some positive developments. Operating losses were reduced by 71% in Q1 2024 under Dufay's leadership, and by Q2 2024, the company reported an 8% year-on-year reduction in losses. The proceeds from Jumia's recent capital raise will help accelerate its growth trajectory, while the company's liquidity position improved, rising to $164.6 million following the sale of 20 million ordinary shares in August.

Jumia has also taken major operational steps during Q3 2024, including enhancements to its logistics network and the opening of a new warehouse in Lagos, Nigeria. The company is refocusing operations in its remaining nine markets and has implemented sweeping changes under Dufay's leadership, including workforce reductions, scaling back operations in underperforming markets, and shutting down the food delivery segment.

One of the most significant developments for Jumia has been the growth of its embedded finance platform, JumiaPay. The platform achieved a transaction volume of 3 million, as Jumia focuses on advancing cashless payment solutions.

With these moves, Jumia is aligning itself with its ongoing efforts to achieve profitability. The company's stock ($JMIA) is currently trading at $4.16, with a market capitalization of $501.49 million. Dufay remains committed to a disciplined approach to managing operations, with the ultimate goal of positioning Jumia for long-term success in the competitive e-commerce landscape.

It is worth noting that Jumia may soon sell off assets in South Africa and Tunisia, as the company continues to optimize its resources and focus on higher-growth markets.

Jumia Faces Q3 Deficits of $20.1M during Restructuring and Market Withdrawal Phase