Africa's leading e-commerce player, Jumia, is hitting a wall. The company's third-quarter 2024 results reveal a 13 year-over-year revenue decline to USD 36.4 M as the company grapples with stagnation despite its attempts to weather tough macroeconomic conditions. Even as Jumia looks to offset some of these headwinds by targeting underserved rural areas, its path to profitability and sustainable growth remains riddled with challenges.
Jumia's latest financial results highlight a complex picture. While the company reported positive growth on a constant currency basis-with revenue up 9 and Gross Merchandise Value GMV increasing by 29-these numbers mask underlying struggles. Foreign exchange devaluations in major markets, including Nigeria and Egypt, have severely impacted Jumia's financials. As a result, actual GMV remained nearly flat, dipping 1 to USD 162.9 M, and the company's adjusted EBITDA loss widened to USD 17 M, up 15 year-over-year.
"Continued resilience in our usage and business fundamentals" amid these pressures is how Jumia's CEO, Francis Dufay, framed the situation. Yet, while Dufay has highlighted growth in "Quarterly Active Customers" and "Orders," the company's active customer count remains stubbornly flat at around 2 million. This number hasn't budged since Q3 2023 and has steadily declined from a peak of 3.8 million at the end of 2021 . This prolonged stagnation poses a headache, particularly in an industry where customer growth often drives platform scalability and profitability.
Upcountry Expansion A Gamble on Rural MarketsIn response to this plateauing customer base, Jumia has turned to an ambitious new strategy- going "upcountry ." The company has begun to expand its pickup stations into rural and semi-urban areas, betting that this shift will bring in new customers and reduce the high costs associated with last-mile delivery.
For Jumia, reaching beyond major cities isn't just a growth opportunity it's a survival strategy. Africa's rural areas have largely been left out of the e-commerce boom due to poor infrastructure and high delivery costs. By leveraging pickup stations, Jumia can centralise deliveries in remote regions, bypassing costly door-to-door service and making online shopping more accessible and affordable for rural consumers.
