Inflation: Jumia releases its Q2 2023 financial results, loses 1 million customers in Nigeria, Ghana, Egypt

Jumia, Africa’s giant online retailer has disclosed its Q2 2023 financial results, showing a 28.1% decline in its customer base as inflation bites harder in its major operating markets comprising Nigeria, Ghana and Egypt.  

The company said its active consumers declined by 1 million year-on-year to 2.4 million in Q2 2023 from 3.4 million recorded in the same period last year. 

Jumia’s Gross merchandise value (GMV), that is, the value of goods sold on the platform also declined by 25.1% from $271.1 million in Q2 2022 to $202.3 million in Q2 2023. 

According to the financial report, orders for products on the platform also declined by 36.5%. From 10.3 million orders in Q2 2022, the company slipped to 6.5 million in the same period this year.  

However idanNews learnt that despite the decline in revenue and customer numbers, the Jumia Group’s CEO, Francis Dufay, said the company is making progress in its bid to reduce losses. Commenting on the Q2 financials, Dufay said: 

“We continue to deliver strongly on our overriding objective of loss reduction and progress towards profitability. In the second quarter of 2023, both Adjusted EBITDA and Operating losses decreased by 66% year-over-year, reaching the lowest loss levels in over 4 years.  

“Considering this strong progress, we are updating our Adjusted EBITDA loss guidance for the full year 2023 to $90-100 million, compared to $100-120 million previously. We are navigating challenging macro conditions with discipline and focus, doubling down on our efficiency efforts. Compared to the second quarter of 2022, Fulfillment Sales & Advertising expenses were down 50% and 74%, respectively.  

“We are also starting to reap the benefits of our actions on overhead costs with G&A excluding share-based compensation decreasing by a third year-over-year, reaching a 4-year low at $17.7 million.”  

Dufy noted that the inflation in Nigeria, Ghana, and Egypt is hitting the company badly, said consumers in these markets have had their purchasing power eroded hence, the reduction in spending.   

“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. In this context, we continue making fundamental enhancements to our platform to secure better supply and pricing while offering a more convenient experience to consumers and sellers. We remain confident in the long-term growth potential of our markets and our ability to capture this opportunity profitably,” he said. 

Jumia pointed out that the average inflation level across its footprint reached 14.1% in June 2023 with highs of 42.5% and 35.7% registered in Ghana and Egypt, respectively. In Nigeria, inflation rose to an 18-year high of 22.8% in June 2023.