Pan- African ecommerce giant, Jumia has released its 3rd quarter results for the period ending 30th September 2019.
Its results show an increase in the company’s losses from €40.6 million in Q2 to €54.6 million in Q3, a 34% increase. The company attributes a large portion of the dismal performance to an increase in fulfillment expenses due to more cross-border goods transactions (with higher shipping costs) on its platform in 3Q 2019.
Interestingly, this is in contrast to the revenue and subscribers which witnessed a positive trend. On a year on year basis, revenue grew by 19% (€40 million) while active customer base grew by 56% from 3.5 million to 5.5 million.
Jumia’s Gross Merchandise Value (GMV) — the total amount of goods sold over the period — also grew by 39% to €275 million from €198 million as at the same period last year. The number of orders also almost doubled from 3.6 million in Q3 2018 to 7 million in Q3 2019.
Jumia also experienced a growth in its digital finance product, JumiaPay, with total payment volume growing 95% to €32 million in Q3 2019 from €16.4 million in Q3 2018.
According to the company, “The increase in JumiaPay penetration is driven by a combination of continuous education efforts of consumers on our platform, incentives such as capped cashbacks offered to consumers for the usage of JumiaPay, as well as the roll-out of JumiaPay to more geographies and Jumia properties. We also continued to add relevant digital services to consumers as part of our JumiaPay payment app.”
This is important for the company as it seeks to generate more revenues from digital payment products and offer JumiaPay as a standalone service across Africa.
Jumia pegged a large part of the spike in losses to an increase in fulfillment expenses due to more cross-border goods transactions (with higher shipping costs) on its platform in 3Q 2019.
It has not been hunky-dory for the e-commerce giant since Citron fraud claim after it listed its shares on the New York stock exchange.
This has affected its share price which is now trading at around $6.
Sacha Poignonnec and Jeremy Hodara, Co-Chief Executive Officers of Jumia had this to say about the results; “We are making significant progress in the usage and relevance of our platform for consumers and sellers and are firmly positioning Jumia as the digital destination of choice for everyday needs in Africa. In parallel, we continue to make great strides in our payment and fintech business with JumiaPay showing very strong growth momentum on both volume and transaction metrics.”
“Our financial strategy seeks to balance growth, JumiaPay development, monetization and cost efficiencies. We manage this equation on a dynamic basis and are now placing even greater emphasis on cash discipline and efficiency. Our growth strategy favors business verticals and product categories that drive adoption, repeat purchase and usage. On the cost efficiency front, we continuously seek to optimize our portfolio of assets and geographies to ensure efficient capital allocation. We are confident this strategy will enhance our focus on our core assets and contribute to building a healthy foundation for the long-term growth and success of Jumia.”
