Jumia, Africa’s leading e-commerce platform, faced another turbulent year in 2024, as currency devaluations in Nigeria and Egypt—its two largest markets—significantly impacted revenue. A combination of shifting consumer habits, rising fulfillment costs, and a challenging macroeconomic environment further pressured the company’s margins. Despite implementing cost-cutting measures, Jumia remained unprofitable, reporting a $64.7 million loss for the year.
The company’s Gross Merchandise Value (GMV) [the total value of goods ordered on its platform] declined by 4% year-over-year to $720 million in reported currency. However, when adjusted for currency fluctuations, GMV actually grew 28% in constant currency terms.
Similarly, total revenue dropped by 10% to $167.5 million, though in constant currency, it reflected a 17% growth. Jumia’s marketplace revenue, which comes from third-party sellers, contracted 31%, while its first-party sales declined 14%. Gross margins shrank 12%, highlighting weaker unit economics and increased cost pressures.
Despite a 24% reduction in advertising and sales expenses as part of a broader efficiency drive, Jumia’s fulfillment costs surged 11%, largely due to an increase in total orders. The company expanded its reach into smaller urban centers, which now account for 56% of total orders. However, these regions tend to generate lower-value transactions, contributing to the decline in GMV.
A further blow came from the drop in high-margin corporate sales in Egypt, negatively affecting overall revenue. Hence, Jumia made strategic decisions to exit South Africa and Tunisia, streamlining its operations but incurring $10 million in one-time expenses in the process. While this reduced the company’s financial burden, it also contributed to a decline in its active customer base, which dropped to 8.3 million from 10 million in 2023.
Despite this decline, quarterly active users edged up to 2.4 million from 2.3 million at the end of 2024. More promisingly, Jumia’s customer repurchase rate improved to 40%, indicating greater retention among its remaining users.
Jumia closed 2024 with $133.9 million in cash reserves, providing a financial cushion but also underscoring the importance of strict cash management. A key pressure point was the $13.5 million in supplier prepayments, which contributed to increased cash burn.
Given its sustained losses and exposure to currency fluctuations, analysts believe Jumia may need to raise additional capital or accelerate cost-cutting efforts to preserve its cash runway.
JumiaPay, the company’s digital payments arm, continued to gain interest, with transactions growing 11% year-over-year to $3.3 million by December 2024. The platform saw increased adoption for food and product deliveries, reinforcing Jumia’s long-term strategy of integrating financial services into its ecosystem.
CEO Francis Dufay remains committed to cashless transactions, positioning JumiaPay as a critical pillar of future growth. However, Jumia faces fierce competition from established fintech players such as Flutterwave, OPay, and MTN’s MoMo, all of which dominate digital payments in key African markets.
Looking ahead, Jumia is expected to maintain its cost-cutting initiatives while working to optimize unit economics in its primary markets. However, achieving profitability remains a challenge unless the company can increase customer spending or lower fulfillment costs.
CEO Francis Dufay remains cautiously optimistic saying, “As we look ahead to 2025, I am optimistic about Jumia’s future. The business is stronger and more efficient than it was just two years ago, and I believe we have a good opportunity ahead by driving top-line growth and improving operational efficiencies.”
With ongoing market exits, a shifting customer base, and financial constraints, Jumia faces a critical period in its evolution. Its ability to preserve cash, refine its marketplace model, and expand high-margin services will ultimately determine whether it can achieve long-term profitability in Africa’s dynamic e-commerce landscape.
