Jumia’s share price surged by 55% over the past five days, closing at $12.08 on Friday, boosting its market value to $1.32 billion. This marks a significant shift for the e-commerce giant, which faced challenges since its 2019 listing on the NYSE, including board-level changes to drive a turnaround.
Operational Restructuring and Financial Performance
Under the leadership of CEO Francis Dufay, Jumia underwent significant restructuring: cutting staff by 43%, exiting underperforming markets, and closing its food delivery business. These efforts led to a 71% reduction in operating losses in Q1 2024, along with an 18.5% revenue growth despite macroeconomic challenges in key markets.
Shift to Third-Party Sellers and Financial Gains
Jumia’s transition to third-party sellers, accounting for over 52% of platform sales, has helped reduce costs and increase commission revenue to $17.3 million in Q1 2024. Despite these positive trends, Jumia faces new competition from social selling platforms and global e-commerce giants like Amazon and local players like Takealot.
Future Outlook and Market Dynamics
Looking ahead, Jumia aims to stabilize its operations before expanding across key markets. As it navigates evolving competition and consumer trends, Jumia’s strategic shifts and financial gains set the stage for a potential growth trajectory in the e-commerce landscape.