Jumia ($JMIA (+0%) ) presented a mixture of strong growth in its operating business and financial challenges in the conference call for the fourth quarter of 2024. The marketplace showed positive momentum: orders for physical goods increased by 18% and active customers by 8%. Despite reduced marketing expenditure, Jumia was able to further strengthen its customer loyalty.
Nevertheless, macroeconomic headwinds weighed on the key financial figures. GMV fell by 12 % in USD, but grew by 13 % in constant currency. Sales fell by 23 % to USD 45.7 million (-2 % in constant currencies). The adjusted EBITDA loss deteriorated to USD -13.7 million and cash consumption rose to USD 30.6 million. Reasons for this include the currency devaluation, costs for the market exits in South Africa and Tunisia and investments in the consolidation of logistics.
CEO Francis Dufay emphasized two key priorities for 2025: sales growth and operational efficiency to improve profitability. Jumia plans to expand more into rural areas without increasing fixed costs and to further expand its product range. The company is increasingly focusing on international sourcing - particularly from China - and optimizing its vendor platform to attract new partners.
At the same time, cost management is to be further improved. Automation in the call center, the expansion of JForce agents (+39% to 29,000) and the consolidation of logistics space are intended to increase efficiency. Dufay remains optimistic: "With strict cost discipline and operational improvements, Jumia has a clear roadmap to profitability.
The following picture emerged from the analysts' questions:
Current trends in the first quarter of 2025: Analysts wanted to know whether the positive trend in orders would continue. Management was confident: growth of 15-20% year-on-year was realistic, supported by a disciplined cost focus.
Product range expansion: supply vs. demand side
Jumia sees the greater challenge on the supply side. Expanding the product range requires operational adjustments, better purchasing conditions and optimized tools for sellers. The long-term strategy is to attract more local and international suppliers in order to further improve the price-performance ratio for customers.
1P vs. 3P model: Will Jumia focus more on proprietary trading?
The company is sticking to its pragmatic approach: 1P (proprietary trading) is used when it is advantageous in terms of price and logistics. However, a massive shift in the mix is not planned.
Growth in physical orders vs. AOV (Average Order Value)
While the volume of physical orders is growing, the average order value has fallen. Jumia does not see this as a problem - in fact, a lower AOV enables broader market penetration. The decisive factor is profitability at order level, not the individual value of an order.
Logistics consolidation: can cost benefits be realized?
Jumia merged inefficient logistics centers in 2024. This change initially cost resources, but should bring efficiency gains in the long term: better control, lower fulfillment costs and higher productivity.
Fixed cost base: are further savings possible?
The savings made to date through cost reductions have largely been exhausted, but the management sees potential for a further 20% increase in efficiency. The current structure allows for a sales volume that is two to three times higher than at present.
Profitability target: What scaling is necessary?
Jumia must double or triple its volumes in order to become sustainably profitable with the current cost structure. The gross margin after fulfillment costs is between 6% and 8% and must be scaled through higher order numbers.
In summary, Jumia continues to focus on expansion, but is struggling with macroeconomic challenges. The company is optimizing its cost base, pushing ahead with digitalization and expanding its network - especially in rural areas. For investors with staying power, Jumia remains a speculative but potentially highly lucrative bet on the African e-commerce market.
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