Financial report for the second quarter of 2023 has shown that Jumia's active client base fell by one million, now amounting to only 2.4 million customers.
Similarly, the total value of all items sold on the Jumia platform, or gross merchandise value, also decreased to $202 million.
This comes after the corporation reportedly reduced 20% of its workforce through layoffs, which resulted in the departure of 900 employees.
The company noted that the staff reductions which took place in Q4 2022 is part of its initiatives to minimize expenses and reduce losses.
As e-commerce continues to develop across the world, Jumia remains one of the top online shopping sites in Nigeria, according to a Legit.ng analysis.
A reduction in loss for the period
The recent report demonstrated that the business was successful in reducing losses, a goal it set when it decided to lay off employees a year ago.
The company noted in previous report.
We anticipate that these headcount reductions will enable us to save over 30% in monthly staff costs beginning in March 2023, as compared to the staff cost baseline in October 2022.
According to the Q2 report however, a significant decrease in sales and advertising expenses caused the company's operating losses to reduce to $23.3 million in Q2 2023, the lowest recorded figure in four years.
Jumia spent $22.2 million on advertising in the second quarter of 2022, but only $5.8 million in the same period in 2023. Due to layoffs earlier in the year, its general and administrative costs were also lower, and its technology costs were lower compared to Q2 2022.
However, the deteriorating macroeconomic environment had an adverse effect on sales as it led to $48.5 million in revenues for the quarter, down from $57.3 million in Q2 2022, and a lower order volume of 6.5 million vs. 10.3 in Q2 2022.
The company commented on the performance, pointing out that the challenging operating environment continues to have an influence on use performance, with record levels of inflation having an impact both on consumer spending and sellers' capacity to obtain goods.
Jumia's shares plunge as Amazon announces Nigerian expansion.
Newsmen earlier reported that Amazon is coming to Nigeria, and this has sent shivers down the spine of Jumia investors.
Africa's leading online marketplace, Jumia's shares dropped almost 10 per cent on Thursday, June 16, 2022. for step-by-step guide on how to order on Jumia.
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