Jumia Profitability Outlook: Can Africa’s E-Commerce Giant Rebound by 2027?

Jumia Technologies, Africa’s leading e-commerce platform, announced a loss of just $16.5 million in Q1 2025, a much smaller loss when compared to $39.6 million in the corresponding period last year.

Even though it is an improvement to some extent, the overall outlook for Jumia’s profitability remains cautious given its continued top-line difficulties.

Jumia posted revenue of $36.3 million in Q1 2025, which was down 26% on a year-on-year basis, mostly weighed down by several currency devaluations, a weakening of corporate sales, notably from Egypt.

Currency Pressures and Revenue Decline

Jumia’s profitability outlook has been extremely strained by, especially those of Egypt and Nigeria, adverse currency fluctuations in its key markets. While the company continues to battle these adverse economic conditions in Egypt, in particular, corporate sales decline has been notable.

However, despite all of these setbacks, management remains cautiously optimistic about earning a profit by 2027. The current target is a loss before income tax of $50-$55 million for 2025, representing a 44%-49% improvement on the $109 million loss recorded in 2024.

Rising Orders but Falling GMV (Gross Merchandise Volume)

The key highlight from Jumia’s Q1 2025 performance has been an increase in orders, growing by 12% YoY to reach the 5.1 million mark. Yet, there has been an 11% drop in Gross Merchandise Volume with a value of $161.7 million.

This situation could mean that while customer engagement has been increasing, average order value has been getting lower, in effect perhaps due to Jumia expanding into outlying areas. The profitability outlook for Jumia will weigh on whether or not the company can convert this increasing number of orders into more expensive transactions.

JumiaPay’s Modest Growth

JumiaPay, which is the company’s payment platform, processed 2 million transactions in Q1 2025, indicating a 1% increase over last year.

The big question, though, is: how does the total payment volume behave? It remained steady at $45.5 million. For the platform to impart a decent degree of profitability towards Jumia, it needs to increase its cashless order penetration as well as its volume of transactions.

Strategic Adjustments: Cutting Costs and Improving Efficiency

To address challenges weighing on Jumia’s profitability outlook, the company undertook several cost-cutting measures, including reducing staff costs by 10%.

Besides, Jumia invested in low-cost customer acquisition strategies to help reduce operational expenses. These efficiency measures are necessary to counterbalance the effects of currency devaluations and revenue losses in the main markets.

Liquidity Position and Cash Flow

Jumia’s liquidity position decreased by $23.2 million during Q1 2025, as opposed to a $19.1 million fall during the same quarter last year. Net cash used in operating activities increased to $21.2 million, mainly due to building inventory in preparation for the Jumia Anniversary campaign. These liquidity standing concerns present important considerations for the outlook toward Jumia’s profitability, as the company continues to work through cash flow challenges.

The Road Ahead

Despite these operational hurdles, Jumia still stayed optimistic about the future. The company aims to be profitable by Q4 2026 and expects full-year profitability in 2027. In the near term, Jumia foresees a 10% to 15% increase in GMV for 2025, excluding any impact from foreign exchange fluctuations.

Furthermore, Jumia expects that there will be a growth between 20% and 25% in physical goods orders; this may be an indicator of growth in its core e-commerce business.

Jumia’s Path to Profitability Amidst Challenges

Jumia’s profitability outlook for Q1 2025 looks like a company that is taking steps to strengthen and improve its financials in the face of economic uncertainties.

To profit seems to be a long way ahead, yet a strong focus on cost reduction, new-market entry, and further improvement of the e-commerce position could brighten the future. However, it must continue addressing the effects of currency devaluations and the fall in average transaction value if profitability is to be realized.

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