Africa’s e-commerce giant, Jumia, said its active consumers declined by one million year-on-year to 2.4 million in Q2 2023 from 3.4 million recorded in the same period last year.
Jumia, who disclosed this in its Q2 2023 financial results, attributed this to high inflation.
In Nigeria, inflation rose to an 18-year high of 22.8 per cent in June 2023.
The financial report also showed 28.1 per cent decline in Jumia’s customer base due to high inflation rate in its major operating markets including Nigeria, Ghana, and Egypt.
The company’s Gross merchandise value (GMV), that is, the value of goods sold on the platform declined by 25.1 per cent from $271.1 million in Q2 2022 to $202.3 million in Q2 2023.
The financial report also disclosed that orders for products on the platform declined by 36.5 per cent, from 10.3 million orders in Q2 2022, the company slipped to 6.5 million in the same period this year.
Commenting on the financial result, Jumia Group’s CEO, Francis Dufay, said the company is making progress in its bid to reduce losses, adding that, “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 per cent 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 per cent and 74 per cent, 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.”
Noting that the inflation in Nigeria, Ghana, and Egypt is hitting the company badly, Dufay lamented that, consumers in these markets have had their purchasing power eroded hence, the reduction in spending, while remaining confident in the long-term growth potential of the markets and the company’s ability to capture this opportunity in a profitable manner.
