The stock market reacted positively after Jumia shared its financial results for the first quarter of 2024, with shares of the Africa-focused e-commerce company opening at $6.45 on Wednesday, a 17.92% jump from the $5.47 share price it traded yesterday.

Jumia narrowed its operating loss in Q1 2024 by 71% after several cost-cutting measures, including a 30% reduction on advertising expenses compared to Q1 2023.  However, challenging macroeconomic conditions across its African markets continue to dampen consumer spending.

The ecommerce giant reported growth in key metrics such as Gross Merchandise Value (GMV), order values, and revenue compared to Q1 2023. This growth underscores investor confidence in CEO Francis Dufay’s strategic direction, which prioritizes cost discipline and a shift towards higher-margin products.  Jumia increased revenues by 15% driven by a company wide effort to focus solely on the sales of big-ticket items such as electronics and home and living items, reducing spending on customer incentives and promotions. 

“In the first quarter, we saw tangible results that our strategy is working. We can grow at scale without spending heavily. Our efforts are delivering real tangible results,” said Dufay during the company’s earnings call.

CEO Francis Dufay emphasised the need for a leaner, agile and more focused company. 

“To date, we have reduced overall headcount by 43% since the end of 2022. In Q1, we made further reductions. These actions translate to a leaner organization that can support future profitable growth.”

While the company looks to offer a diversified product assortment, it is aware of the macroeconomic headwinds that affect consumer spending. The company shared plans to expand to more cities on the continent while optimizing operations in existing markets based on learnings from its decade long expertise.

“We are acquiring high-quality consumers while spending less in growing our business amidst challenging macro environments.”

Joseph Olaoluwa Senior Reporter, TechCabal

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