Jumia Technologies, the e-commerce firm, said on Wednesday that it had passed its peak losses and would focus on promotions, marketing, and cost-cutting in its quest for profitability, sending its shares up 16% despite a larger quarterly loss.
Jumia is an online marketplace for vendors and food sellers that also offers logistics and payment services. In 2019, it was the first African-focused tech startup to be listed on the New York Stock Exchange.
For the second quarter ended June 30, it reported an adjusted loss before interest, tax, depreciation, and amortization of $57.2 million, up from $41.6 million in the same period last year.
The company did not say when it expected to make a profit but said achieving that would take a combination of measures including promotional discounts, ramping up marketing, and cutting costs at warehouses by reducing consumption of packaging.
“There is not … a silver bullet that will suddenly make it profitable,” Chief Executive Officer Sacha Poignonnec told Reuters in an interview.
The company, which operates in 11 African countries, saw total orders increase 35% year-on-year as customers bought more beauty and cleaning products.
Jumia still expects a full-year adjusted EBITDA loss of $200 million-$220 million, but it reduced its full-year capital expenditure guidance to $10 million-$15 million from $15 million-$25 million.
Its quarterly active consumers rose 25% to 3.4 million, while total revenue for the quarter reached $57.3 million, up 42.5%.
Poignonnec brushed off possible competition from Amazon.com after a news report said that it could make a foray into countries including Nigeria and South Africa, markets where Jumia has a presence.
“If they were to enter those markets, … it would be a great validation of the attractiveness of e-commerce in Africa,” he said.