Shares of African e-commerce firm Jumia plunged 28% on Friday as investors reacted to its continued losses in 2024 despite improved cost efficiency. Jumia’s share price declined from $3.88 to $2.82, slashing its market capitalisation to $285.2 million—down from $1.3 billion in Q3 2024.
The company’s revenue declined by 10% to $167.5 million in reported currency in 2024, and in the fourth quarter of 2024, it made $45.7 million, a 23% reduction year over year.
While Jumia’s constant currency metrics show resilience, its decline in USD terms highlights its exposure to macroeconomic instability. Although analysts predict softer currency devaluation in Nigeria and Egypt in 2025, investors typically discount growth that relies on favourable FX movement.
The company’s widening losses also suggest that Jumia’s infrastructure is still inefficient as its logistics costs increased by 11% year-on-year. Global investors favour cash-generating businesses as interest rates rise and the appetite for unprofitable businesses reduces. In 2024, a Goldman Sachs basket of unprofitable tech companies lost 20% of its value as the S&P gained, and Jumia’s inability to turn a profit is placing downward pressure on the stock.
As it exited countries, the company’s active customers fell to 8.3 million compared to 10 million in the previous year. However, its customers’ repurchase rate improved to 40%, signifying a stickier customer base. The company’s orders also grew by 11% to 7.4 million in the fourth quarter. Per its SEC filing, Jumia has 2.4 million quarterly active users, a slight increase from 2.3 million in December 2023.
Jumia projects that its gross merchandise value (GMV), the value of goods ordered on its platform, will reach $795–830 million in 2025 (+10–15% year-on-year), but this assumes stable FX rates, which investors might consider unrealistic given Africa’s macroeconomic headwinds and the company’s 2024 misses.
The company’s GMV fell by 4% to $720 million in 2024 and 12% in the fourth quarter. Currency devaluations in Egypt and Nigeria, its two largest markets, led to a contraction in dollar-denominated GMV.
Jumia’s expansion into second cities in 2024, which now accounts for 56% of its orders, also caused a shift towards lower-value orders. This expansion, combined with a decline in high-margin corporate sales in Egypt, contributed to GMV declines in reported terms.
Until Jumia stabilises its USD-denominated growth, reduces its losses, and shows a viable path to profitability, investor scepticism might persist and today’s 28% drop only reflects a sign of things to come.
