The impact of high inflation on Jumia is underscored by the loss of a staggering one million customers in Nigeria to 2.4m in Q2 2023 from 3.4m in Q2 2022. The value of goods sold on the platform declined by 25.1% to US$202.3m in Q2 2023. Despite the decline in revenue and customer numbers, the company is making progress in its bid to reduce losses. The company achieved a 50% reduction in fulfilment costs by optimizing its logistics chain, primarily through a substantial increase of 42% in deliveries made through pick-up stations. Jumia was affected by worsening macroeconomic conditions in Nigeria, one of its biggest markets, grappling with over 20% inflation due to soaring food costs. The removal of fuel subsidies further burdens consumer purchasing power. The challenge is not exclusive to Nigeria; Ghana contends with a 43% inflation rate, and Egypt’s rate is 35%.
Across all Jumia’s markets, Jumia faces a 14% average. Inflation and currency depreciation in nine of its ten markets explain the difficulty of its goal of moving towards profitability. Jumia was the first African Start-up to list on the New York Stock Exchange (NYSE). It overhauled its board late last year, and co-CEOs Jeremy Hodara and Sacha Poignonnec stepped down as the company reset its focus on reducing losses and setting the business on a clear path to profitability. Despite the obvious brilliance of the former CEO, Juliet Anammah, analysts still debate whether Jumia can thrive in an emerging market economy if the Q3 and FY 2023 results do not stir optimism
