Jumia Technologies (JMIA) 2024 RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference summary

Strategic transformation and operational focus

• Over the past two years, the company underwent a major transformation, shifting from a Western e-commerce model to one tailored for African consumers, focusing on affordability, supply, and cost efficiency.

• Workforce was halved and marketing spend reduced by 75%, while the business returned to growth and improved resilience despite challenging macroeconomic conditions.

• Fulfillment was consolidated into single large centers per country to lower unit costs and shipping fees, prioritizing reliability and affordability over convenience.

• Logistics are outsourced to local entrepreneurs, creating an asset-light, scalable, and exclusive delivery ecosystem that serves as a competitive barrier.

• Inventory investment increased, especially for key sales periods, to secure supply and drive growth.

Growth strategy and market positioning

• The company is transitioning from restructuring to a growth phase, focusing on expanding supply, entering new cities, and optimizing marketing efficiency.

• Growth is driven by improved supply from local and Chinese suppliers, with country-level successes expected to aggregate into group-level double-digit growth.

• Marketing spend was cut significantly, yet customer loyalty and repurchase rates have increased, indicating a more efficient and sticky customer base.

• Competition from global players like Amazon, Temu, Shein, and AliExpress is acknowledged, but the company leverages its logistics network and local adaptation to maintain an edge.

• A dedicated sourcing team in China enables direct procurement, offering value-for-money products tailored to African consumers.

Geographic focus and product mix

• Exited South Africa and Tunisia to concentrate resources on nine core markets with higher growth potential and better economics.

• Up-country Nigeria is highlighted as a major growth opportunity, with existing markets providing ample runway for expansion.

• Product mix has shifted toward electronics, phones, fashion, beauty, and home appliances, moving away from low-margin FMCG and staples.

• Average order value (AOV) has risen to around $40 due to this mix shift, but future AOV may fluctuate as supply and category focus evolve.