African e-commerce firm Jumia Technologies said it was past peak losses and would focus on promotions, marketing and cost cutting in its quest towards profitability, driving its shares up 16% despite a wider quarterly loss.
Jumia is an online marketplace for vendors and food sellers, with associated services including logistics and payments. It was the first Africa-focused tech start-up to list on the New York Stock Exchange in 2019.
It reported an adjusted loss before interest, tax, depreciation and amortisation of US$57.2-million for the second quarter ended 30 June, from $41.6-million in the same period last year.
The company did not say when it expected to make a profit, but said achieving that would take a combination of measures including promotional discounts, ramping up marketing and cutting costs at warehouses by reducing consumption of packaging.
“There is not … a silver bullet that will suddenly make it profitable,” CEO Sacha Poignonnec said in an interview.
The company, which operates in 11 African countries, saw total orders increase 35% year on year as customers bought more beauty and cleaning products.
Jumia still expects a full-year adjusted Ebitda loss of $200- to 220-million, but it reduced its full-year capital expenditure guidance to $10- to $15-million from $15- to $25-million.
Its quarterly active consumers rose 25% to 3.4 million, while total revenue for the quarter reached $57.3-million, up 42.5%.
Poignonnec brushed off possible competition from Amazon.com after a news report said that it could make a foray into countries including Nigeria and South Africa, markets where Jumia has a presence. “If they were to enter those markets … it would be a great validation of the attractiveness of e-commerce in Africa,” he said. — Bhargav Acharya, with Ashwini Raj, (c) 2022 Reuters