Jumia, an NYSE listed e-commerce platform for Africa backed earlier on by MTN and Rocket Internet, is mulling spinning-off its fintech arm JumiaPay to focus on payments, microloans, and ticketing as its new sources of revenue.
Though the firm announced a continued strong growth of topline drivers and 94% increase in Gross profit, the firm’s losses still mean e-commerce in Africa still has a long way to go.
“During the second quarter of 2019, our GMV increased by 69% year-on-year and our Gross profit grew by 94%. Our Adjusted EBITDA loss as a percentage of GMV decreased by 562 basis points (5.62 percentage points) and our Operating loss, amounting to €66.7 million, decreased as a percentage of GMV by 148 basis points (1.48 percentage points)” commented Sacha Poignonnec and Jeremy Hodara, co-CEOs of Jumia. “We remain focused on all aspects of our growth strategy, particularly JumiaPay, as we continue to drive its usage in our markets.”
The firm says, this quarter, its GMV increased by 69% compared to the second quarter of 2018, due to a strong marketplace growth and robust consumer acquisition and re-engagement momentum. It’s Active Consumers stood at 4.8 million, up from 3.2 million a year ago and 4.3 million at the end of the first quarter of 2019.
JumiaPay, which is now offered in Nigeria, Egypt, Ivory Coast, Ghana, Morocco and Kenya, remained a key focus area for the firm and has been expanded beyond the marketplace.
“We have also expanded the scope of JumiaPay beyond our physical goods marketplace. As of December 31, 2018, JumiaPay was only available within our physical goods marketplace. It is now also available within our on-demand services, Jumia Food, and hotel booking portals, Jumia Travel, in selected countries,” said Sacha Poignonnec and Jeremy Hodara, co-CEOs of Jumia.
The firm also said it’s continuing to expand the range of financial and digital services available from third parties, powered by JumiaPay, offering its consumers every day services such as micro-loans, event tickets and deals vouchers.
According to the firm, GMV increased by 68.9% from €166 million in the second quarter of 2018 to €281 million in the second quarter of 2019, on the back of the growth of Active Consumers and spend per Active Consumer. GMV is the total value of orders including shipping fees, value added tax, and before deductions of any discounts or vouchers, irrespective of cancellations or returns.
The number of Active Consumers as of June 30, 2019 was 4.8 million, up from 3.2 million a year ago and 4.3 million at the end of the first quarter of 2019. Jumia’s First Party revenue increased by 39.2% in the second quarter of 2019 compared to the second quarter of 2018. Jumia undertakes first party activity to fulfill unmet consumer demand but its being reduced.
Gross profit increased by 93.6% from €8.9 million in the second quarter of 2018 to €17.3 million in the second quarter of 2019, as a result of increased platform monetization. Operating loss increased from €41.9 million in the second quarter of 2018 to €66.7 million in the second quarter of 2019 mainly due to an increase in SBC expense.
Jumia has removed sellers, terminated employees and JForce agents who collaborated with employees in order to benefit from differences between commissions charged to sellers and higher commissions paid to JForce agents.
Jumia also added that the several class-action lawsuits filed against it and certain of its officers in connection to its initial public offering remain in their preliminary stages.