E-retailer Jumia Technologies plans to focus on Nigeria, Africa’s most populous nation, as part of a bid to turn profitable.

The Nasdaq-listed e-commerce firm will consolidate its three warehouses in Nigeria to one, 30 000sq m depot in Lagos in an effort to cut costs, CEO Francis Dufay said in an interview. The company will also add more cities it services in the West African nation, he said.

Jumia, which has yet to report an annual profit, expects Nigeria — home to 200 million people — to give it scale and help break even. It’s a gamble because lack of dollars and rising cost of living have forced multinational companies including Procter & Gamble, GSK and Bayer to exit.

“We want to be sized and organised for significant growth,” Dufay said. “Jumia sees the macro situation in Nigeria as temporary and expects it to turn positive in the medium term.”

Jumia reported an operating loss of US$8.3-million in the first quarter of the year, while revenue rose 5.7% to $48.9-million. The company’s shares have plunged about 90% from a record reached in the middle of the pandemic, when people were relying on e-commerce services.

“We need to build scale,” Dufay said in a separate interview at the Qatar Economic Forum in Doha with Joumanna Bercetche. “We know that customers are heavily price-conscious, so we need a very lean structure on our end, so we can deliver very low prices on everything, including delivery and all services.”

Naira devaluation

In Nigeria, Jumia’s biggest market, the central bank has devalued the naira twice in a year. Most Nigerians struggle with electricity supply and congestion at Nigeria’s ports have compounded its economic woes.

Jumia is betting on economic revival in the West African nation as President Bola Tinubu and the central bank try to introduce policies to slow inflation and lure investors.

Read: Jumia to halt food delivery operations

For now, Jumia is preserving its cash reserves. It has also introduced buy-now-pay-later financing options to woo customers struggling with rising prices.