Jumia reports GMV growth in physical goods in five countries and lowest loss since IPO

In Q3 2023, Jumia reported an adjusted EBITDA loss of $15 million, marking the lowest since its IPO in 2019 (surpassing the $27 million recorded in Q1 and $19.3 million in Q2) and a a significant decrease of $32 million compared to Q3 2022. This represents a 67% year-over-year decrease and a 70% decrease on a constant currency basis. This year, adjusted EBITDA loss stood at $61 million, down 61% from the first nine months of 2022.

Jumia has also taken strategic actions that have resulted in a notable improvement in liquidity, with a reduction in its position of $19 million in Q3 2022, a 71% year-on-year reduction, in comparison to decrease to $ 66.0 million in the third quarter of 2022 .

Other key financial highlights include an 11% year-over-year decrease in revenue to $45 million, a 19% increase on a constant currency basis, and a GMV of $181 million , which is down 25% year-over-year but up 3% on a constant currency basis. Quarterly active customers and orders also decreased compared to this time last year. Jumia’s customers numbered 2.3 million, down 24.3% from Q3 2022 and received 7.2 million orders, down 23% compared to Q3 2022, from these customers.

Meanwhile, marketing and advertising expenses also decreased by 74% year-over-year to $4.3 million in the third quarter of 2023, as the company continues to bring discipline to marketing investments. And there was an operating loss of $19 million compared to $43 million in the third quarter of 2022, down 57% year over year.

Activities behind the numbers

GMV growth of physical goods in five countries

Despite the decrease in the number of users compared to the previous quarter, there was a positive 11% increase in orders for Jumia from Q2 to Q3 2023. This increase is due to the increase in orders on the Jumia Pay App , mainly due to promotional activities in digital categories such as airtime. Orders of physical goods remained almost stable quarter over quarter, experiencing only a 1% decline.

That brings us to what CEO Francis Dufay described, in a call to TechCrunch, as the main highlight of the company’s Q3 2023: the GMV of physical goods increasing in five countries annually.

“The news this quarter is that we are still making significant progress in profitability and cash preservation. That is very important, to see the impact of our growth strategy because we now have a visible and tangible impact in the countries that we can share,” commented Dufay.

“For example, we have growth in some of the 11 countries in the physical goods segment. We have GMV growth in five countries now compared to last year, which is very positive news because it is compared to the year we have bigger losses and three times more marketing budget. The fact that we can push again the development of five countries with more efficient economy is good proof that our strategy works and gives us a lot of confidence for other countries to follow the same path.

Overall, however, Jumia observed a year-over-year decrease in GMV in its core e-commerce business of physical goods of 17% in actual dollars but a 10% increase in constant cash basis. According to Dufay, the number of orders for physical goods is relatively stable, but the average order value has increased compared to Q3 2022. This is mainly attributed to the efforts of core categories such as phone, electronics, home living, fashion, and beauty. By bringing better assortments, brands and retailers in these categories witnessed an increase in average order value and facilitated improved repurchase rates, driven by attractiveness. of our assortment rather than increasing marketing costs.

Dufay said it belonged to Jumia partnership with Starlink in October is integral to the e-tailer’s overall strategy to increase assortment, supply, and brand offerings, adding that Jumia wants to be the preferred distributor for international brands, which brings a diverse and innovative product range to Africa. “We are planning to start distributing Starlink residential kits in Nigeria in the coming weeks at the end of the year. And we are talking about expanding to other African countries. This has not yet affected the business, but it a great opportunity and partnership where both sides can add a lot of value.”

Meanwhile, Jumia’s total payment volume (TPV) amounted to $48.1 million in Q3 2023, marking a 28% year-on-year decline but showing a 3% increase on a constant basis. of money. At the same time, TPV as a percentage of GMV remained constant at around 27%, maintaining its stability from the third quarter of 2022. In particular, JumiaPay transactions recorded a positive trend, which reached 3.2 million in Q3 2023, showing an 8% year-over-year growth. An impressive 44.7% of orders placed on the Jumia platform in Q3 2023 were executed using JumiaPay, compared to 31.9% in Q3 2022.

Ending on the same starting note, Jumia revised its guidance for adjusted EBITDA loss. From the initial forecast in Q1 2023 of $100-120 million and the adjustment in Q2 of $90-100 million, the target is now between $80 million and $90 million. This means a 57% to 61% year-over-year reduction in adjusted EBITDA loss if successfully achieved. The favorable financial outlook contributed to a 7.5% surge in Jumia’s stock on Wednesday, reflecting rising investor confidence.

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