Jumia's Q1 2025 Earnings Call: Unraveling Contradictions in Sales, Inventory, and Cost Management

Corporate sales and their impact on GMV and orders, inventory and working capital strategy, cash management and burn reduction, corporate sales and GMV impact, and cost management and savings initiatives are the key contradictions discussed in Jumia's latest 2025Q1 earnings call.



Reduced Losses and Margin Expansion:
- Jumia Technologies AG reported a significant reduction in loss before income tax for Q1 2025, projected to be $50 million to $55 million, compared to previous guidance of $65 million to $70 million.
- This improvement was driven by decisive cost management initiatives, including cost reductions in logistics, fulfillment, technology, and G&A expenses.

Usage and Revenue Trends:
- Adjusted for perimeter effects, physical goods orders grew 21% year-over-year, while GMV declined 11% due to currency headwinds and reduced corporate sales, particularly in Egypt.
- The decline in GMV was largely due to the impact of currency devaluation and reduced corporate sales, despite healthy order growth in key categories like electronics and fashion.

Cost and Cash Flow Management:
- Jumia achieved a significant reduction in fulfillment expense per order to $2.1 in Q1 2025, down 14% year-over-year.
- This was attributed to operational efficiencies and renegotiations of third-party logistics contracts, which unlocked improved unit economics.

Supply and Market Expansion:
- The company sourced 2.6 million gross items internationally in Q1, marking a 61% increase year-over-year.
- This growth, driven by expansion in the Chinese vendor base, supports Jumia's strategy of enhancing product assortment and affordability.

Geographic Reach and Operational Performance:
- Jumia's physical goods orders from upcountry regions grew sharply and now represent 58% of total volumes.
- This expansion is unlocking low-cost customer acquisition and enhancing fulfillment efficiency through partnerships with third-party logistics providers.