Shares of African e-commerce giant Jumia (JMIA) soared to $8.67 on Monday, June 10, continuing an unexpected rally that began with positive reactions to its Q1 2024 results. It is the highest the stock has traded in 2024 after beginning the year at $3.36.

While it is shy of unicorn valuation–its market capitalisation is $872 million–it is a huge improvement from where it started the year.

In Q1 2024, it cut its losses by 70%, trimming advertising and sales costs even as revenue grew 18.5%. Jumia has historically struggled with cutting costs despite often talking about a need to be profitable.

Investors reacted positively to those results, delivered despite accelerating inflation and currency devaluation in some of Jumia’s biggest markets. With some fast-moving consumer goods (FMCG) companies in markets like Nigeria for instance reporting losses in the past year, that result was doubly impressive.

CEO Francis Dufay has been a hit with shareholders since he was appointed in 2023. He has engineered an important change in the company’s business model and admitted its economics was unsustainable.

He has shut down Jumia Food, a loss-making vertical, moved UAE-based executives to Jumia’s active markets, and has made the right calls in returning the company to a growth track.

Part of that growth has included the launch of a 30,000 sqm integrated warehouse in Lagos to improve logistics capabilities and reduce delivery time.

As the company looks to get its growth act together, it will be conscious that Amazon has launched in South Africa and could very well have designs in other African markets.

Jumia launched an initial public offering in 2019, listing on the New York Stock Exchange (NYSE) for $14.50 a share. Five years on, much of the early excitement around the business has waned as its share price suffered and profitability remained elusive.

Yet, in a market that is often unforgiving, Jumia is insistent that it will survive and thrive. Will Dufay finally be the man to make it happen?

Olumuyiwa Olowogboyega Newsroom Editor

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