Jumia's market takes a nosedive due to high inflation
The skyrocketing rates of inflation in Nigeria, Ghana,
Egypt and other African countries have been attributed to the market fall of the popular e-commerce
store Jumia, the company's financial report for the second quarter of 2023
has revealed.
The report from Jumia sighted by ghlense.net indicates that
the company has recorded an unprecedented decline of 1 million active customers
as the company achieves a significant reduction in operational losses in the
second quarter of 2023.
In Ghana, the inflation rate has hit 43% while
in Egypt it has risen to around 35% causing a fall in the company’s income
from $57.3 million in the second quarter of 2022 to $48.5m in the second quarter
of 2023 and the volume order from 10.3million in Q2 2022 to 6.5 million in Q2
2023 while the value of all goods sold on the Jumia platform reduced to $202
million.
Jumia recorded a reduction in its operating losses from
$23.3 million in the second quarter of 2023, as a result of cutting down on
sales and marketing.
On advertising, the reports indicate that in the second
quarter of 2022 Jumia spent $ 22.2 million on advertising while in the second quarter
of 2023, the company spent $5.8 million on advertising.
The economies of host countries continue to have a
significant impact on the company, the online store is losing customers due to
the harsh realities of the economies.
The purchasing power of people has been
greatly lowered which in turn affects the company’s customer base and revenue.
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