This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, e-commerce, telcos, and financial institutions. A new edition drops every Monday.
Jumia is losing less money; this is good. But Jumia is also making less money, which is bad in a market where competitors are scaling aggressively with deep pockets and subsidised models. This raises a key question: Is the e-commerce giant on the path to profitability or just survival?
According to Jumia’s Q1 2025 financial report, revenue fell to $36.3 million in Q1, a 26% year-on-year decline (18% in constant currency). Yet it also posted its lowest after-tax loss since its 2012 launch, and reiterated its target of achieving profitability by 2027.
The numbers reveal a central tension in Jumia’s current strategy: while losses are shrinking, so is the revenue. The company is cutting costs, but the more urgent question is what it’s cutting, and whether that tradeoff is sustainable in the face of rising competition and a high inflation rate.
Leaner, but not necessarily stronger
To get closer to profitability, Jumia has slashed marketing spend, exited unprofitable markets like South Africa and Tunisia, and shifted focus from high-margin Business-to-Business transactions to everyday, low-ticket consumer purchases. It’s also doubling down on cost-effective channels like Search Engine Optimisation (SEO), Customer Relationship Management (CRM), local radio, and the JForce agent network — its grassroots sales force targeting rural and underbanked populations.
“We are getting more business-to-consumer (B2C) orders now, and even though the revenue might not be as large, at the end of the day, it is translating into a cleaner balance sheet for us,” a Jumia spokesperson told . The company also highlighted solid performance in Côte d’Ivoire, Ghana, and Kenya, in addition to its largest market, Nigeria.
But this leaner strategy is unfolding amid a fiercer battlefield, one where Jumia no longer faces just local or regional competition, but global platforms like Temu operating at a scale and subsidy level it may not match.
The Temu effect
Temu, a Chinese e-commerce giant, is fast becoming Jumia’s most disruptive challenger. With ultra-low prices, a direct-to-consumer shipping model, and a massive marketing budget, Temu is not just competing — it’s reshaping the rules of the game.
“Jumia’s path to profitability appears challenging due to a lack of clear catalysts for growth,” said Oluwatobi Akapo, a former business development manager at Jumia Nigeria. “Increased competition in Nigeria and economic headwinds like high inflation and currency devaluation in Egypt complicate matters.”
Temu’s model connects African consumers directly to Chinese manufacturers, bypassing local intermediaries, and relies on Chinese state-subsidised shipping and a vast manufacturing ecosystem to drive prices down. While deliveries can take 10 to 15 days, the cost advantage is often too large to ignore.
Is faster delivery enough?
Jumia’s logistics are among the most robust on the continent, with same-day or two-to-five-day delivery across most Nigerian cities. Temu, on the other hand, often takes up to two weeks. But consumers are making calculated tradeoffs.
Temu, which started operating in Nigeria in November 2024, often sells the same category of products for 30–70% less than Jumia. A Bluetooth earpiece priced at ₦15,000 ($9.35) on Jumia might cost just ₦8,000 ($4.99) on Temu — shipping included.
“I bought a smartwatch on Temu for ₦11,000 ($6.86) at a discount price that would’ve cost me almost ₦20,000 ($12.47) on Jumia,” said Ibukun Adebayo, a student in Osun state. “It took 15 days, but I planned ahead. I’d do it again.”
This kind of logic is hard to combat with speed alone. In non-urgent categories like fashion, electronics accessories, and household goods, Jumia’s logistics edge becomes a nice-to-have, not a decisive factor.
Jiji: The informal contender
While Jumia and Temu duel in the formal e-commerce space, Jiji — a classifieds platform — is dominating the informal end. Jiji claimed over $50 billion in Gross Merchandise Value (GMV) across seven African markets in 2024, up from $10 billion the year before.
These figures reflect listing values, not completed transactions, but they signal a shift in consumer behaviour. Jiji appeals to budget-conscious buyers by enabling direct negotiation with sellers over WhatsApp or in-person meetings, especially for high-ticket items like electronics, furniture, and vehicles.
In contrast, Jumia’s GMV dropped four percent to $720.6 million across its nine markets. That drop highlights a critical reality: Jumia’s competition isn’t just coming from global tech giants — it’s also coming from local platforms operating entirely outside the traditional e-commerce value chain.
Mixed fortunes across markets
Jumia’s regional performance shows diverging trends. Marketplace revenue dropped 30% to $18.1 million and first-party sales declined 21% to $17.8 million, driven by corporate demand softening and steep currency depreciation in Egypt.
Nigeria, however, continues to offer hope. Jumia is expanding into northern Nigeria, where e-commerce penetration is still relatively low. Orders from outside major cities now account for 58% of total volume, up from 50% a year ago — a sign of real traction in rural areas.
Jumia also launched a new business line: Jumia Delivery, a third-party logistics service in Nigeria. The company plans to scale it to Kenya, Ghana, and Senegal. It’s a strategic move to diversify revenue beyond its core e-commerce operations and potentially unlock more margin-efficient growth.
But whether this logistics play can scale without soaking up capital remains to be seen.
More orders, less value
Jumia processed 5.1 million orders in Q1, a 12% increase from the previous year. But average order value fell, and GMV declined 11% to $161.7 million. That drop reflects a deliberate shift toward smaller purchases — a volume game.
“It’s a classic tradeoff: high-ticket items for high-frequency, low-ticket transactions,” said Lagos-based analyst Abimbola Adewale. “It’s a retention bet.”
That bet may be paying off as Jumia’s repurchase rate rose to 45% in Q4 2024, up from 40% a year earlier, a sign of increasing customer stickiness. But sustaining that momentum requires ensuring the customer experience doesn’t degrade as costs are cut.
Speed vs price: What matters more?
Despite Temu’s disruptive pricing, some users still prefer Jumia for reliability and speed.
“Jumia delivers in days, not weeks,” said Temitayo Paul, a graphic designer in Lagos. “With Temu, most orders take two weeks or more. I only use them when I don’t need something urgently.”
This preference gives Jumia a short-term window. But if Temu continues experimenting with faster shipping—such as air cargo or local fulfillment partnerships—even that advantage could erode.
Akapo warned, “If Temu localises operations, even partially, it could radically shift the balance. They see Nigeria as a market worth investing heavily in.”
Eyes on 2027
Jumia’s Q1 numbers tell the story of a company tightening its belt, simplifying its model, and aiming for profitability, but doing so in a marketplace that’s being reshaped at breakneck speed. The company’s strategic exits, frugal marketing, and rural push show it’s playing the long game.
But long games require stamina and funding. If Temu continues to compress delivery timelines and Jiji scales its informal marketplace reach, Jumia could find itself squeezed from both ends.
Jumia may be bleeding less, but in today’s African e-commerce battlefield, that’s not enough. It must defend its territory with more than discipline, it needs defensibility. Otherwise, profitability by 2027 may remain just a projection, not a destination.
