Jumia, the eCommerce giant often referred to as the "Amazon of Africa," has reported a 5% growth in gross profit and a 54% reduction in operating losses in the first quarter of 2023. After facing financial difficulties in the past year and failing to achieve profitability by 2022, Jumia seems to be making progress. The company's operating loss in Q1 2023 was $30.9 million, marking a 54% decline compared to the previous year and the lowest quarterly level in over four years. While its revenue fell by 3% year-over-year to $46.3 million, the gross profit increased by 5% to $28.6 million.

Jumia's liquidity position has been a challenge for the company, impacting its ability to raise funds and reduce costs. With new CEO Francis Dufay at the helm, Jumia aims to transform its business from one struggling with losses to a thriving and profitable enterprise through optimized internal operations. Dufay emphasized the need for strategic and operational changes to achieve profitability.

The report highlights a decline in quarterly active consumers and orders by 22% and 26% respectively, compared to the same period last year. Gross merchandise value (GMV) and total payment value (TPV) also experienced decreases of 22% and 31.3% respectively. The decline in GMV and TPV can be attributed to the drop in active consumers and orders.

JumiaPay, the company's payment platform, witnessed a 31% decline in TPV to $48.6 million in Q1 2023. The decrease was primarily due to Jumia's decision to move away from highly promotional services on the JumiaPay app, which impacted consumer lifetime value. Transactions on JumiaPay also decreased by 38% year-over-year to 2.0 million.

Despite these challenges, Jumia remains committed to achieving profitability by focusing on cost efficiency and driving usage growth. The company aims to reshape its strategy and make better use of its cash reserves to navigate the tough macroeconomic environment it operates in.

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