By Dipo Olowookere
Africa’s leading e-commerce platform, Jumia, has shown significant progress on the path to profitability as reflected in its recently announced financial results for the quarter ended June 30, 2020.
In the period under review, the company increased its gross profit by 38 per cent to €23.3 million from €16.8 million in the second quarter of 2019.
It was observed that the rise in the profit was as a result of the increase in marketplace revenue, which reached €23.6 million in the second quarter of 2020, up 38 per cent compared to the second quarter of 2019.
In the period under consideration, Jumia recorded a 44 per cent year-on-year decrease in operating loss to €37.6 million when compared with the figures in the second quarter of last year.
Also, the company made progress in usage growth as the number of active customers, orders placed and gross merchandise value showed a significant increase for the quarter.
The report showed that annual active consumers reached 6.8 million, a year-over-year increase of 40 per cent, while orders one the platform grossed 6.8 million, a year-over-year increase of 8 per cent.
GMV was €228 million, a year-over-year decrease of 13 per cent compared to GMV in the second quarter of 2019.
The company’s payment service, JumiaPay, also recorded impressive improvement figures, as total payment value surged by 106 per cent from €26.0 million in the second quarter of 2019 to an all-time high of €53.6 million in the second quarter of 2020, surpassing the record set during the fourth quarter of 2019 of €45.6 million.
“Likewise, on-platform penetration of JumiaPay as a percentage of GMV increased to 23.5 per cent in the second quarter of 2020, more than twice the level of penetration in the second quarter of 2019 of 9.9 per cent.
In addition, transactions on JumiaPay reached 2.4 million, a year-over-year increase of 36 per cent, representing 35.6 per cent on-platform penetration in terms of orders.
Furthermore, sales and advertising expenses decreased by 51 per cent from €14.9 million in the second quarter of 2019 to €7.2 million in the second quarter of 2020, its lowest level in more than 3 years.
Adjusted EBITDA loss stood at €32.9 million in the second quarter of 2020, decreasing 26 per cent on a year-over-year basis.
Commenting on the results, the co-CEOs of Jumia, Jeremy Hodara and Sacha Poignonnec, stated that, “We have made significant progress on our path to profitability in the second quarter of 2020, with operating loss decreasing 44 per cent year-over-year to €37.6 million.
“This was achieved thanks to an all-time high gross profit after fulfilment expense of €6.0 million and record levels of marketing efficiency with sales & advertising expense decreasing by 51 per cent year-over-year.”
“We are navigating these uncertain times of COVID-19 pandemic with strong financial discipline and operational agility which positions us to emerge from this crisis stronger and even more relevant to our consumers, sellers and communities,” they said further.
