Jumia reports 99% drop in EBITDA loss for Q4 of 2023
In the fourth quarter (Q4) of 2023, Jumia reported a significant 90% year-over-year decrease in operating loss and an even more impressive 99% drop in adjusted EBITDA loss. This remarkable progress was not the result of aggressive cost-cutting measures, but rather a holistic approach that focused on enhancing unit economics and operational efficiency.
Reductions in sales and advertising expenses, down 63% year-over-year, as well as general and administrative expenses, down 54% year-over-year, played a key role in the decline of losses. Through the optimization of logistics and marketing strategies, Jumia managed to achieve substantial cost savings while maintaining growth potential.
JumiaPay, the company’s digital payment platform, has been instrumental in streamlining operations and improving the customer experience. Despite a 10% decrease in Total Payment Volume (TPV) to $59.3 million in Q4 2023, the number of transactions increased by 41% to three million. Additionally, 45% of orders on the Jumia platform in Q4 2023 were processed using JumiaPay, up from 31% in Q4 2022.
The company acknowledged the challenges faced in 2023 due to the economic environment and its impact on consumer spending. In response, Jumia made tough decisions to streamline operations, discontinue underperforming activities, restructure its business model, and significantly reduce marketing expenses. While these decisions had short-term effects, they were essential in paving the way for a financially robust and sustainable future.
