Sylvia Duruson
In a strategic move towards profitability, eCommerce giant Jumia has announced plans to consolidate its three Nigerian warehouses into a single 30,000-square-meter depot in Lagos. This initiative, part of the company’s cost-saving strategy, aims to enhance operational efficiency and reduce expenses.
According to Jumia’s CEO, Francis Dufay, the consolidation is a key element of their profitability plan. Additionally, the company is exploring opportunities to expand its presence across more cities in Nigeria, capitalizing on the country’s vast market potential.
Jumia’s Q1 2024 report revealed a significant reduction in operating losses, falling from $28.4 million in Q1 2023 to $8.3 million. The improved financial performance was attributed to substantial cost reductions and increased gross margins. The company remains committed to further reducing losses and achieving cash efficiency and profitable growth.
Dufay highlighted the positive trajectory, stating that order volumes and average order values increased across Jumia’s markets, including Nigeria. He emphasized the company’s strong start to the year, with a key focus on creating a leaner organization primed for growth.
Despite acknowledging challenging macroeconomic conditions, including currency depreciation in major markets like Nigeria, Dufay expressed confidence in the temporary nature of these challenges. He assured that Jumia has maintained sufficient inventory and diverse product offerings at competitive prices, keeping customers engaged on its platform.
In a separate interview at the Qatar Economic Forum, Dufay reiterated the need for a lean structure to deliver low prices, catering to the price-conscious Nigerian consumer market. “We are very reactive in pricing as Nigeria remains a huge market for consumer demand, and our business is not stopping,” he affirmed.
Furthermore, Jumia has partnered with Newedge (Easybuy), a finance company, to introduce a “Buy Now, Pay Later” model for Nigerian consumers. This initiative allows customers to purchase desired products and make payments over an agreed period, eliminating the need for immediate payment in full.
