Still burning cash, Jumia positions itself as an online bridge to Africa

Africa-focused internet retailer Jumia saw its revenue rise at an annual rate of 19.4% during Q3 2019, to €40.1 million, while its operating loss widened by 34.6%, to €54.6 million. Gross merchandise volume (the total value of orders, including those of third parties using its platform, before the deduction of any discounts or vouchers and irrespective of cancelations or returns) increased at an annual rate of 38.8%, to €275 million during the quarter.

The company attributed a slowdown in revenue growth to the fact that its “Jumia anniversary” marketing campaign, which was concentrated in Q3 during 2018, was spread out across Q2 and Q3 this year. It claimed that “without this change in calendar, the growth rate would have been around 50%.” The number of active customers on Jumia in Q3 (those who placed an order during the 12 months to September 2019) rose by 57.1% (its fastest rate of growth in five quarters), to 5.5 million.

Sacha Poignonnec, co-founder and co-CEO of Jumia, claimed that the mid-September launch of Jumia Mall would be a driver of growth. He described it as “a dedicated space within the Jumia platform for brands to better engage and reach online users. Brands can now create a tailored online store with customised content to tell the story of their brand.”

Poignonnec noted that “Less than two weeks after its launch, Jumia Mall was home to 500 e-shops, representing about 50% of Forbes top 100 consumer brands and approximately 35,000 live product listings.” These brands include Nestlé, Unilever, Procter & Gamble, Johnson & Johnson, Coca-Cola, L’Oréal, Samsung, and Microsoft.

He added that “One of the main mental barriers that we repeatedly hear from our African consumers is the inability to check product quality when making an online purchase. Jumia Mall is very much about addressing this mental barrier, as we give consumers direct access to the brand.”

Once feted as Africa’s first unicorn (a private company with a valuation of more than USD1 billion), Jumia has been ravaged by short sellers since floating on the New York Stock Exchange earlier this year and currently has a market capitalisation of less than USD450 million.

If you want to read more, click here (Jumia results announcement) or here (results presentation)