Jumia Technologies, an African e-commerce firm, said it was past peak losses and would focus on promotions, marketing and cost cutting in its quest to profitability, driving its shares up 16% despite a wider quarterly loss.
Jumia is an online marketplace for vendors and food sellers, with associated services including logistics and payments. It was the first African tech startup to list on the New York Stock Exchange in 2019.
It reported a loss before interest, tax, depreciation and amortisation of $57.2 million for the second quarter ended June 30, from $41.6 million in the same period last year.
The company did not say when it expected to make a profit, but said that it would take a combination of measures, including promotional discounts, ramping up marketing and cutting costs at warehouses, and reducing packaging.
Sacha Poignonnec, Chief Executive Officer, told Reuters in an interview that there isn't a silver bullet that will make it profitable.
The total orders of the company, which operates in 11 African countries, increased by 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.
The quarter's active consumers rose 25% to 3.4 million, while the 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 it could make a foray into countries like 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.