As it makes good on plans of triggering a raft of changes to embrace a new era marked by huge cost cuts and sustainability, Africa’s dominant e-commerce player Jumia is facing a challenge as foreign exchange (FX) woes and inflation in key markets add to problems compounded by declining sales.
The e-tailer recorded 6.9 million orders in the first quarter of 2023, a 26 percent decline year-on-year (YoY), per its latest financials. Quarterly active customers also slipped 22 percent to 2.4 million from 3.1 million during the same period, as did its Gross Merchandise Value (GMV)-the total value of goods Jumia sold-which fell 22 percent to USD 198.2 M.
The drop in sales, not entirely unexpected under Jumia’s new leadership led by CEO Francis Dufay who has continuously hammered on an overhaul to drive sustainable long-term growth by ditching costly, unprofitable categories, is tied to a number of factors, the company said.
While the suspension of certain product and service lines evidently impacted usage metrics negatively, broader economic headwinds, most notably the rising cost of living which has weakened consumer spending power and stifled sellers’ ability to source goods, as well as local currency devaluation which have troubled major African economies over the past year, markedly undermined Jumia’s efforts.
