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Jumia Technologies' Q4 2024: Navigating Contradictions in Order Growth, Inventory Strategy, and Sales Dynamics

Earnings DecryptThursday, Feb 20, 2025 9:25 pm ET
1min read
These are the key contradictions discussed in Jumia Technologies' latest 2024Q4 earnings call, specifically including: Order Growth and Supply Side, Inventory Strategy, 1P and 3P Sales Strategy, Inventory and Volume Growth Strategy, Order Growth and Usage Trends, Inventory Strategy and Cost Management, and Fixed Cost Basis:



Order and Customer Growth:
- Jumia's physical goods orders grew by 18% year-over-year in Q4 2024, with even stronger growth observed in December.
- Quarterly active customers increased by 8%, reflecting the strength of the platform and the value it delivers to customers.
- The growth was driven by strategic initiatives such as expanding upcountry markets, improving product assortment, and enhancing logistics capabilities.

Financial Performance and Currency Impact:
- Jumia's revenue was $45.7 million in Q4 2024, down 23% year-over-year in USD and down 2% in constant currency.
- Adjusted EBITDA was negative $13.7 million, and loss before income tax was $17.6 million.
- The decline in revenue was primarily due to currency devaluations and a reduction in corporate sales, particularly in Egypt.

Cost Management and Efficiency:
- Jumia managed to reduce marketing spend from $6.2 million in Q4 '23 to $4.8 million in Q4 '24.
- Fulfillment expense per order, excluding JumiaPay app owners, decreased to $2.24, down 4% on a constant currency basis.
- These improvements were due to targeted marketing spend and operational efficiencies, including consolidating warehouse footprints.

Strategic Exits and Market Focus:
- Jumia exited nonstrategic markets in South Africa and Tunisia, focusing on operating in 9 countries.
- This strategic move helped consolidate operations and improve efficiency, contributing to a more streamlined business model.
- The decision was part of a broader strategy to build a sustainable and profitable future for Jumia by focusing on core markets.

Comments

Post
Anthony
02/21

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mrkitanakahn
02/21
@Anthony Cool
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rltrdc
02/21
Jumia's growth in physical goods orders is a silver lining. If they can maintain momentum, there's potential for a comeback. 🤞
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vivifcgb
02/21
Jumia's GMV drop hurts, but efficiency gains hope.
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RhinoInsight
02/21
Macro factors are brutal, but Jumia's Black Friday push was lit. Could be a sign of better customer engagement ahead.
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Nichix8
02/21
Holding a small position in $JUMIA. Risky, but if they pivot on inventory and cost, there could be some upside. Not betting the farm.
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The_Sparky01
02/21
@Nichix8 How long you been holding $JUMIA? Curious if you got a target price in mind.
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JSOAN321
02/21
Jumia's gross profit is a lifeline. They need to grab hold and pull themselves up, but it won't be easy.
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bnabin51
02/21
$JUMIA needs to fix its inventory strategy or risk sinking. Cash is king, and right now, they're playing with weak hands.
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Opening-Finger-4294
02/21
@bnabin51 LOL, sinking ship, much?
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hey_its_meeee
02/21
@bnabin51 True, Jumia's inventory management is a concern. They need to tighten up their cash flow or risk drowning in working capital issues.
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Witty-Performance-23
02/21
Jumia's GMV drop hurts, but that 18% order growth in physical goods is a silver lining. Holding long, expecting turnaround.
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yodalr
02/21
@Witty-Performance-23 How long you planning to hold Jumia? Got a target in mind when they might turn around?
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enosia1
02/21
Holding $JUMIA long, betting on African e-commerce growth.
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BoomsRoom
02/21
Currency devaluations wrecked Jumia's USD revenue 😬
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rareinvoices
02/21
Jumia's order growth vs. GMV drop is wild. They need to tighten up their inventory game before things get messy. 🤔
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turkeychicken
02/21
Streamlining warehouses is smart. Cutting costs without sacrificing service could be Jumia's path to stability. Long-term play?
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dantheman2108
02/21
Currency devaluations hit hard, but Jumia's cost management shows promise. Watching how they balance acts between efficiency and revenue.
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kenton143
02/21
Currency devaluations hit hard, but operational efficiency gains are promising. Watching Jumia's inventory strategy closely for future growth signals.
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THEPR0P0TAT0
02/21
@kenton143 Currency devaluations are tough, but Jumia's efficiency gains might help. Watching inventory strategy closely for growth signals.
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smooth_and_rough
02/21
@kenton143 Efficiency gains r cool, but Jumia's still struggling.
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SojournerHope22
02/21
18% order growth is sweet, but that adjusted EBITDA tho... Jumia gotta get its finances in check before it's too late.
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Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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