Shares of African e-commerce agency Jumia plunged 28% on Friday as buyers reacted to its continued losses in 2024 regardless of improved value effectivity. Jumia’s share value declined from $3.88 to $2.82, slashing its market capitalisation to $285.2 million—down from $1.3 billion in Q3 2024.
The corporate’s income declined by 10% to $167.5 million in reported foreign money in 2024, and within the fourth quarter of 2024, it made $45.7 million, a 23% discount yr over yr.
Whereas Jumia’s fixed foreign money metrics present resilience, its decline in USD phrases highlights its publicity to macroeconomic instability. Though analysts predict softer foreign money devaluation in Nigeria and Egypt in 2025, buyers usually low cost development that depends on beneficial FX motion.
The corporate’s widening losses additionally counsel that Jumia’s infrastructure continues to be inefficient as its logistics prices elevated by 11% year-on-year. World buyers favour cash-generating companies as rates of interest rise and the urge for food for unprofitable companies reduces. In 2024, a Goldman Sachs basket of unprofitable tech firms misplaced 20% of its worth because the S&P gained, and Jumia’s lack of ability to show a revenue is inserting downward strain on the inventory.
Because it exited international locations, the corporate’s lively clients fell to eight.3 million in comparison with 10 million within the earlier yr. Nonetheless, its clients’ repurchase price improved to 40%, signifying a stickier buyer base. The corporate’s orders additionally grew by 11% to 7.4 million within the fourth quarter. Per its SEC submitting, Jumia has 2.4 million quarterly lively customers, a slight improve from 2.3 million in December 2023.
Jumia tasks that its gross merchandise worth (GMV), the worth of products ordered on its platform, will attain $795–830 million in 2025 (+10–15% year-on-year), however this assumes steady FX charges, which buyers would possibly contemplate unrealistic given Africa’s macroeconomic headwinds and the corporate’s 2024 misses.
The corporate’s GMV fell by 4% to $720 million in 2024 and 12% within the fourth quarter. Forex devaluations in Egypt and Nigeria, its two largest markets, led to a contraction in dollar-denominated GMV.
Jumia’s growth into second cities in 2024, which now accounts for 56% of its orders, additionally brought about a shift in direction of lower-value orders. This growth, mixed with a decline in high-margin company gross sales in Egypt, contributed to GMV declines in reported phrases.
Till Jumia stabilises its USD-denominated development, reduces its losses, and reveals a viable path to profitability, investor scepticism would possibly persist and right this moment’s 28% drop solely displays an indication of issues to return.
