Pan-African technology company, Jumia has generated $50.5 million in revenue in Q3 2022, an increase of six percent from the $47.6 million reported in Q2.
The development represents an 18.4 percent increase from the $42.7 million reported in the same period last year.
Francis Dufay, Jumia’s acting CEO, in laying out the new business strategy for the company during the Q3 2022 earnings call, stated that the recent focus on cost discipline and return on investment speaks to an increasing need to make the company profitable in the near future.
He stated further 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.
The e-commerce firm 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, and Morocco). According to him, e-commerce opportunities in Nigeria remain 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.
He stated further that Jumia 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.
“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,” Dufay said in a statement.
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 the 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,” Dufay said.
In 2021, Jumia generated more revenue – $24m in Q1 2021 compared to $23m in Q1 2020 — from third-party sales on its platform. However, in what would seem like not being able to have one’s cake and eat it, Jumia’s first-party revenue dropped from $12m in Q1 2020 to $8m in Q1 2021, a massive 35 percent decline.