Jumia Plans Strategy Shift to Boost Growth, CEO Says
Mr Francis Dufay, the Chief Executive Officer (CEO), Jumia, a Pan-African e-commerce platform, says the company plans to shift strategy to enhance growth levels for the rest of 2023.
Dufay, on Sunday in Lagos, while reacting to the company’s first quarter financial report, said Jumia’s new approach to growth involved three key elements.
Jumia’s gross profit in the first quarter of 2023 stood at $28.6 million, translating to a five per cent increase.
He said the company would enhance its supply and variety of products by attracting reputable brands and suppliers in important e-commerce sectors such as phones, electronics, home appliances, fashion, and beauty.
Dufay added that the company would improve the tools and processes used to manage vendors on the Jumia platform, thereby enhancing the overall experience for customers.
“Lastly, the company aims to expand its consumer base by effectively targeting underserved markets in urban centres and rural areas, where traditional supply and retail options are limited, and tapping into the large consumer populations in these areas,” he said.
Dufay stated that to achieve Jumia’s first quarter performance, the company redoubled its efforts to drive sustainable long-term growth, building upon the previous management’s blueprint from the fourth quarter of 2022.
This, he said, led to a substantial reduction in losses which decreased by 54 per cent via optimising its revenue streams, enhancing logistics services, and adopting a disciplined marketing approach.
He added that the company’s first quarter results revealed a remarkable 70 per cent reduction in marketing and advertising expenses while still managing to achieve growth in revenue.
“This disciplined approach to marketing investments has led to an improvement in marketing efficiency ratios, with sales and advertising expenses per order decreasing by 58 per cent and as a percentage of Gross Merchandise Value improving by 451 basis points.
“Marketplace revenue, particularly commissions, experienced significant growth, increasing by 40 per cent year-over-year.
“Jumia’s ability to reduce marketing expenses while maintaining revenue growth reflects a fundamental shift in our approach to sustainable and cost-effective growth,” he said.
Dufay said that the company’s focus on cost reduction across various expense categories yielded positive results with fulfilment expenses decreasing by 34 per cent year-over-year.
“The first quarter results demonstrate excellent progress towards the goal of achieving profitability in spite of facing challenging macroeconomic conditions and temporary headwinds.
“With a focus on enhancing the fundamentals of the platform and implementing comprehensive cost efficiency measures, Jumia remains on track to achieve long-term growth and profitability,” he said. # Jumia Plans Strategy Shift to Boost Growth, CEO Says Naira Steadies as Banks Issue Update on FX Purchase