Africa's largest e-commerce platform, Jumia, faced another challenging year in 2024, reporting a $64.7 million loss amidst currency devaluations in its two largest markets, Nigeria and Egypt. Despite aggressive cost-cutting measures, the company remained unprofitable, citing shifting consumer trends and rising fulfillment costs as major challenges.

The company's gross merchandise value (GMV) fell 4% year-over-year to $720 million in reported currency, but rose 28% in constant currency, a metric that strips out the impact of devaluations. Revenue dropped 10% to $167.5 million, though it grew 17% in constant currency. The decline in GMV was attributed to a higher volume of low-value transactions, particularly in smaller urban centers across its core markets, where Jumia now generates 56% of total orders.

Jumia's marketplace revenue (from third-party sellers) declined 31%, while first-party sales fell 14%. Gross margins also contracted by 12%, reflecting weaker unit economics. The company's advertising and sales expenses declined 24%, aligning with its cost-efficiency drive, but fulfillment costs rose 11% due to a surge in orders, increasing pressure on margins.

The company exited South Africa and Tunisia, reducing its operational footprint but incurring $10 million in one-time expenses. While this move contributed to a decline in total customer numbers, Jumia's active customer base fell to 8.3 million from 10 million in 2023, reflecting market exits and economic headwinds. However, quarterly active users rose slightly to 2.4 million from 2.3 million in December 2024, and its customer repurchase rate improved to 40%, signaling stronger retention among its remaining users.

Jumia closed the year with $133.9 million in cash, providing a liquidity buffer but underscoring the need for careful cash management given sustained losses and FX volatility. A key cash drain was $13.5 million in supplier prepayments, which contributed to the company's operating cash burn. If losses persist, Jumia may need to raise additional capital or accelerate efficiency measures to extend its cash runway.

JumiaPay transactions grew 11% year-over-year, reaching $3.3 million by December 2024. Adoption increased for food and product deliveries, reinforcing Jumia's long-term bet on embedded financial services. CEO Francis Dufay continues to push for cashless transactions, with JumiaPay positioned as a key pillar of future growth. However, it faces competition from fintech players like Flutterwave, Opay, and MTN's MoMo, which dominate digital payments in Jumia's key markets.

As Jumia enters 2025, the company is expected to continue cost-cutting while fine-tuning its unit economics in key markets. Analysts believe profitability remains distant unless Jumia substantially increases customer spending or reduces fulfillment costs. CEO Francis Dufay expressed optimism about Jumia's future, citing the company's strengthened business and improved operational efficiencies. However, the company's ability to preserve cash, refine its marketplace model, and grow high-margin segments will determine if it can finally achieve sustainable profitability.