Jumia orders dropped by 22% in 2023 as customer purchasing power was eroded by the steep increase in inflation. The high inflation rate that is experienced by many African countries dawned on the purchasing power of customers.
Jumia however wants to still focus on creating small agile teams and also slashing advertising and marketing spending even more.
Jumia Orders Dropped In 2023
In a message addressed to shareholders, Francis Dufay, Jumia’s CEO, acknowledged the challenging landscape faced by technology and retail enterprises across the African continent.
The company experienced a notable decline in key metrics, with orders dropping by 22% from 27.5 million in 2022 to 21.3 million in 2023. Similarly, gross merchandise value witnessed a decrease of 19.6%, declining from $932 million in 2022 to $749.8 million in 2023. Jumia’s revenue for 2023 also suffered an 8.3% reduction compared to the previous year, falling from $203.3 million to $186.6 million. Additionally, gross profit saw a decline of 9.4%, decreasing from $182.2 million to $107 million.
How Jumia Performed In the Year Generally
Despite these setbacks, Dufay emphasized that Jumia concluded 2023 in a significantly improved position, highlighting the decrease in loss before tax to $98.6 million from $206.2 million in 2022. He attributed this positive development to a fundamental transformation undertaken by the company, aimed at fortifying its financial standing and laying the groundwork for a robust eCommerce business.
However, Dufay acknowledged the short-term challenges brought about by this transformation, including the closure of Jumia Food operations in several African countries and the reduction of aggressive marketing strategies, which he stated resulted in a more streamlined organization.
Jumia’s Transformative Efforts in the Year 2024
Looking ahead to 2024, Dufay expressed confidence that Jumia’s transformative efforts would yield growth. The company’s focus will shift towards creating small, agile teams and further reducing advertising and marketing expenditures.
Dufay emphasized the importance of addressing the inconsistency in supply and pricing to meet the demands of African consumers, underscoring Jumia’s commitment to collaborating closely with local sellers, global brands, and international vendors to strengthen its supply chain.
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