Jumia's Q2 2025: Navigating Contradictions in Inventory, Marketing, and Market Expansion Strategies

Inventory and cash management strategy, marketing strategy and focus, expansion into secondary cities, first-party versus third-party sales strategy, and inventory and working capital strategy are the key contradictions discussed in Jumia's latest 2025Q2 earnings call.



Strong Financial Performance and Growth:
- Jumia Technologies AG reported a 25% year-over-year increase in revenue for Q2 2025, standing at $45.6 million.
- The growth was driven by increased usage and stronger monetization of its marketplace, particularly from key international brand partners like Starlink in Nigeria and Kenya.

Order and GMV Growth:
- Physical goods orders grew by 18% year-over-year, with a 10% increase in GMV, excluding impacts from exited markets.
- This trend was supported by strong demand, affordability, and strategic expansion into secondary cities and effective use of marketing channels.

Improved Profitability and Cash Burn:
- Jumia narrowed its adjusted EBITDA loss to $13.6 million and reduced cash burn to $12.4 million, driven by higher revenue and disciplined execution.
- The company achieved this through higher revenue growth across multiple streams and cost reduction initiatives, such as a 5% reduction in overall headcount.

Expansion into Underserved Markets:
- Orders from outside capital cities represented 59% of total volumes, up from 52% a year ago, adjusted for perimeter effects.
- This expansion strategy has delivered high growth with minimal fixed cost investments, contributing significantly to Jumia's revenue.