Jumia Technologies, Africa’s largest e-commerce group, reported a 21% surge in orders in its first-quarter results this week — a figure that might ordinarily signal robust health. Yet the pan-African retailer, often dubbed the “Amazon of Africa,” continues to bleed cash, with revenues falling sharply and losses widening.
The disconnect highlights the challenges of scaling e-commerce in Africa’s fragmented markets, where currency volatility, logistical hurdles, and cutthroat competition from deep-pocketed rivals such as China’s Temu complicate the path to profitability.
Strong Demand, Weak Returns
Jumia’s operational metrics suggest its core business is gaining traction:
- Orders grew at their fastest pace in two years, up 21% year-on-year.
- Active customers increased by 15%, with Nigeria — its largest market — posting a 22% jump in orders and a 20% rise in gross merchandise value (GMV).
- International sellers expanded product listings by 61%, improving selection and pricing.
Yet revenue fell 26% to $36.3 million, while operating losses more than doubled to $18.7 million. Adjusted EBITDA losses widened to $15.7 million, up from $4.3 million a year earlier.
Where the Money Is Going — and Why It’s Not Enough
Three key factors can explain the mismatch between order growth and financial performance:
a) The Collapse of High-Margin Corporate Sales
Jumia previously relied on bulk B2B transactions, particularly in Egypt, which carried higher fees and better margins than consumer sales.
Economic instability in Egypt has crushed this revenue stream, with no immediate replacement.
b) Currency Headwinds
The Nigerian naira and Egyptian pound have depreciated sharply, reducing the dollar value of local sales.
While GMV fell only 2% in constant currency terms, reported dollar revenue dropped 18% after exchange-rate effects.
c) Pricing Pressure from Competitors
Since entering Nigeria in late 2024, Temu has flooded the market with ultra-cheap goods, forcing Jumia to compete on price.
Rising order volumes may reflect smaller basket sizes and lower take rates, squeezing margins.
Cash Burn Accelerates
Jumia’s liquidity position declined by $23.2 million in the quarter, leaving it with $110.7 million in cash and short-term deposits. At the current burn rate, the company has roughly five quarters of runway before needing additional funding.
Management has cut some costs — fulfillment expenses per order fell 14% — but technology spending rose 6% due to infrastructure upgrades, and inventory buildup drained cash ahead of a key sales campaign.
A Make-or-Break Year Ahead
Francis Dufay, Jumia’s chief executive, struck an optimistic tone, citing “accelerating momentum in our core consumer business.” But analysts remain cautious.
The underlying demand is evident, but Jumia is struggling to monetise it effectively. Unless the company can replace lost corporate revenue and improve per-order economics, growth alone will not be enough to ensure its survival.
The company’s ability to stem losses in 2025 will determine whether it can outlast rivals and finally achieve sustainable scale — or join the long list of African tech ventures that burned bright before fizzling out.