Francis Dufay, Jumia CEO.

After experiencing growing pains, pan-African e-commerce platform Jumia says it is on the mend, plugging revenue leakages, and is aiming to be profitable by the end of the current financial year.

Jumia reported its first quarter 2023 results yesterday, talking up reductions in its losses.

The e-commerce platform has presence in 23 countries and generates revenue from first-party sales, advertising, value-added services and shipping fees. Listed on the New York Stock Exchange, the company reported its performance for the first quarter, ended March.

In the quarter, Jumia’s operating loss was $30.9 million, down 54% year-over-year and 49% on a constant currency basis, as a result of the significant cost decreases over the period.

Adjusted EBITDA loss was $27.0 million, decreasing by 51% year-over-year and 47% on a constant currency basis.

Revenue reached $46.3 million in the first quarter of 2023, down 3% on a year-over-year basis, and up 24% on a constant currency basis; mostly driven by first-party revenue performance.

It reported, first-party revenue was $18.4 million, down 7% on a year-over-year basis, mainly as a result of the scale-back of the grocery sub-category, which was largely undertaken on a first-party basis.

Marketplace revenue reached $27.4 million in the first quarter, up 4% on a year-over-year basis and 21% on a constant currency basis.

Commissions was the fastest growing Marketplace revenue stream, increasing by 40% year-over-year and 61% on a constant currency basis.

The company said this growth was the result of commission fee increases implemented in mid-2022, says the company.

Marketing and advertising revenue was stable year-over-year and up 32% on a constant currency basis.

Value-added services revenue, which predominantly includes logistics revenue from sellers and fulfilment revenue, including consumer shipping fees, decreased by 11% and 21% year-over-year, in parallel with a decline in volumes.

Jumia’s gross profit reached $28.6 million in the first quarter, up 5% year-over-year or 24% on a constant currency basis.

Francis Dufay, Jumia CEO, said the company is placing its fortunes on ‘fundamentals of its business and consumer value proposition’ to capture vast opportunities as it seeks to stabilise the company, which has been bleeding money in the past few years.

“We are committed to taking the business to profitability and the first quarter of 2023 results demonstrate very good progress towards this goal. Operating loss decreased by 54% year-over-year to $31 million, its lowest quarterly level in over four years. Our cost reduction initiatives are clearly bearing fruit, with all operating costs decreasing in the first quarter of 2023, both sequentially and on a year-over-year basis,” said Dufay.

He added: “We are very encouraged by this progress and are now redoubling our efforts to drive sustainable long-term growth for the business. We are equally focused on both cost efficiency and usage growth.

“The macro environment has been challenging over the past few quarters, which negatively impacted our growth trajectory.

“Notwithstanding these temporary headwinds, we have significant growth runway in our markets and are strengthening the fundamentals of our business and consumer value proposition to capture this vast opportunity.”