Jumia has reported a 28.1% decrease in its customer base in the second quarter of 2023, largely due to escalating inflation in core markets, including Nigeria, Ghana, and Egypt. According to the company’s Q2 2023 financial results, active consumers dropped by one million year-on-year, bringing the total to 2.4 million from 3.4 million in Q2 2022.
The e-commerce giant’s gross merchandise value (GMV), representing the total value of goods sold on the platform, also fell significantly by 25.1%, declining from $271.1 million in Q2 2022 to $202.3 million in Q2 2023. Similarly, total orders placed through the platform saw a 36.5% decrease, dropping from 10.3 million in the previous year to 6.5 million in the same quarter this year.
Despite the decline in revenue and consumer engagement, Jumia Group CEO Francis Dufay highlighted the company’s progress in reducing losses, noting a 66% year-over-year reduction in both adjusted EBITDA and operating losses, marking the lowest loss levels in over four years. He also cited a 33% year-over-year reduction in general and administrative expenses, excluding share-based compensation, which reached a four-year low of $17.7 million.
Dufay explained that inflationary pressures in Nigeria, Ghana, and Egypt have severely impacted consumer spending and sellers’ ability to maintain inventory, eroding purchasing power and contributing to a reduction in platform activity. “Usage performance continued to be affected by the difficult operating environment, with record levels of inflation impacting consumers’ spend as well as sellers’ ability to source goods,” Dufay said.
To mitigate these challenges, Jumia is implementing key platform improvements to enhance product availability and pricing while streamlining the user experience for both buyers and sellers. Despite the current setbacks, Dufay expressed confidence in Jumia’s long-term growth prospects, stating, “We remain confident in the long-term growth potential of our markets and our ability to capture this opportunity in a profitable manner.”
The report highlighted that inflation across Jumia’s operational footprint averaged 14.1% in June 2023, with particularly high rates in Ghana and Egypt at 42.5% and 35.7%, respectively.
