Jumia restrategize, records $50.5m revenue in Q3, 2022
Boxes of stock sit stacked inside a Jumia Technologies AG distribution warehouse in Lagos, Nigeria Photo: Bloomberg
Jumia has generated $50.5 million in revenue in Q3 2022, an increase of six percent from the $47.6 million reported in Q2. This also represents an 18.4 percent increase from the $42.7 million reported in the same period last year.
Francis Dufay, Jumia’s acting CEO, laid out the new business strategy for the company during the Q3 2022 earnings call, stating that the recent focus on cost discipline and return on investment speaks to an ever-increasing need to make the company profitable in the near future.
Results for Q3 showed more encouraging signs that the company is on the right path.
He further stated that the company intends to bring more focus to the core business, allocating capital, resources and teams to main areas and projects with attractive returns on investments and clear ecosystem benefits, adding that Jumia will deemphasise or cease projects and ventures that do not meet such criteria.
In line with the above, the company said it will scale back First Party grocery offerings in geographies where this category remains sub-scale. In addition, Jumia Prime will be paused indefinitely from the 1st of January 2023 as the company looks to focus more resources in other areas of the business.
Dufay said the company plans to keep logistics open to third parties only in the countries where they have strong assets (Nigeria, Ivory Coast, Morocco). The e-commerce opportunity in Nigeria remains vast with a very young population and growing middle class. Hence, this new focus will further strengthen the company’s hold in its biggest market, he said.
Going forward, he said the company is looking to continue strengthening its foothold in all the countries where it is currently operational; however, this is likely to come with changes to its operating model.
In a statement by Dufay, he said, “We have a clear focus for the next chapter of our journey and are taking decisive action to support our path to profitability. We will bring more focus to the business, directing our efforts and resources to projects and activities that deliver tangible value to our consumers, sellers and broader ecosystem participants. We are also enforcing tighter cost discipline and driving efficiencies across the full structure while enhancing the fundamentals of our core e-commerce business to drive user growth.”
The company is showing greater willingness to constantly invest in Nigeria and has stated it would be making some adjustments in its organisational setup in coming weeks. Allocating more people and resources to its marketplace, tech and in-house logistics platform are some of the strategies expected to enhance future success.
“Clearly, there is strong optimism that this new strategy will continue to deliver value to Jumia’s consumers in Nigeria. The company is on the right path to profitability through growth and optimization,” he added.
