Jumia to cut products and overheads as new management chase profits
By Editor - Fri Nov 18, 7:45 am
Last Monday, Jumia co-founders Sacha Poignonnec and Jeremy Hodara resigned from their roles as co-CEOs, just ten days before the company’s third-quarter 2022 financial report. The end of their tenure, therefore, marked the first time a new face — Francis Dufay, the ex-chief at Jumia Ivory Coast and now acting CEO of Jumia — took charge of the investor briefing. On the call, Dufay was quick to emphasize why the e-commerce giant’s supervisory board decided to install new management, stressing that Jumia’s approach to turning a profit after half a decade of successive losses on the NYSE (as Africa’s first publicly traded company ) required more deliberate execution and a return to basic e-commerce fundamentals. Jumia’s third-quarter report showed a glimpse into what this new approach could offer. For instance, the company’s operating loss and adjusted EBITDA loss fell double-digits year-over-year. Its operating loss declined 33% from $64 million to $43.2 million, while adjusted EBITDA losses were trimmed 13% from $52.5 million to $45.5 million; their lowest level in six quarters. This reduction in losses is driven by a material decline in marketing costs in the form of sales and advertising expenses, which decreased 31.5% from $24 million to $16.4 million year-over-year, and an improved monetization plan that saw gross profit increase of 29.2% within the same period. “We want to significantly improve our unit economics and create the right fundamentals for long-term growth.
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