News Desk
The stock market reacted positively to Jumia’s financial results for the first quarter of 2024, with shares of the Africa-focused e-commerce company opening at $6.45 on Wednesday, marking a 17.92% increase from the previous day’s $5.47 share price.
Jumia significantly narrowed its operating loss in Q1 2024 by 71%, attributing this improvement to various cost-cutting measures, including a 30% reduction in advertising expenses compared to Q1 2023. However, challenging macroeconomic conditions across its African markets continue to hinder consumer spending.
Despite these challenges, Jumia reported growth in key metrics such as Gross Merchandise Value (GMV), order values, and revenue compared to Q1 2023. This growth reflects investor confidence in CEO Francis Dufay’s strategic direction, which emphasizes cost discipline and a focus on higher-margin products. Revenue increased by 15%, driven by the company’s shift towards selling big-ticket items like electronics and home and living products, while reducing spending on customer incentives and promotions.
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Dufay expressed satisfaction with the results, stating, “In the first quarter, we saw tangible evidence that our strategy is effective. We are achieving scalable growth without heavy spending, yielding real, tangible results.”
Emphasizing the need for a leaner, more agile organization, Dufay highlighted ongoing efforts to streamline operations, including a 43% reduction in overall headcount since the end of 2022. Jumia aims to offer a diversified product assortment while remaining mindful of macroeconomic challenges affecting consumer spending. Plans include expanding to more cities across the continent and optimizing operations in existing markets based on years of experience.
“We are attracting high-quality consumers while managing costs effectively amid challenging economic conditions,” Dufay stated.
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