Jumia to partner NIPOST, reports 94% increase in Gross Profit

The foremost e-commerce company, Jumia has announced its possible partnership with Nigerian Postal Service (NIPOST) to effectively improve and expand its services nationwide.

The Jumia Nigeria Chief Executive Officer, Juliet Anammah who made this disclosure while speaking with press men in Lagos said the potential partnership will most importantly help in serving the remote areas across the country.

According to her, Jumia will also be working with a network of small logistics service providers across the country to power delivery in certain locations in Nigeria.

In her presentation of Jumia Q2 2019 report, Anammah highlighted that the company has recorded €17.3 million, a 94 per cent year-on-year (YoY) increase in gross profit for the second quarter (Q2) ended June 30, 2019.

While the number of Jumia active consumers as at June 30, 2019 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, the company also revealed that the technological firm’s Gross Merchandise Volume (GMV) increased this quarter by 69 per cent compared to 58 per cent in the second quarter of 2018.

Anammah explained that, the improvement is as a result of a variety of factors; such as strong marketplace growth, robust consumer acquisition and re-engagement momentum while its gross profit soared to €17.3 million as against €8.9 million recorded in the corresponding period of 2018.

Furthermore, she noted that its Adjusted EBITDA loss as a percentage of GMV improved from negative 21.4 per cent in Q2, 2018 to negative 15.8 per cent in the Q2, 2019.

Speaking on this, the Co- Chief Executive Officers, Jumia Technologies AG, Sacha Poignonnec, and Jeremy Hodara stated that, “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)”.

“These results reflect our continued focus on offering a relevant and engaging online shopping and lifestyle destination for consumers, while providing our sellers with an attractive value proposition and a platform to grow their businesses.

“Despite the challenges in the economy, we remain focused on all aspects of our growth strategy, particularly JumiaPay , as we continue to drive its usage in our markets”, they said.

However, Anammah confirmed that the company has sacked three top management staff after discovering inflated sales figures in its Nigerian business.

Explaining the reason for the move, she disclosed that it was discovered that some third-party salespeople on its JForce programme were engaging in improper practices by conniving with sellers as well as Jumia staff. This practice allowed merchants to get better commissions from the platform.

Jumia says it has since delisted affected JForce consultants and merchants while firing employees that were part of the illegal business practice.

Jumia also claimed that the activities only generated approximately 1% of its Gross Merchandise Volume (GMV) and these transactions have no effect on the company’s financials.

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On its 490% year-on-year growth on the revenue generated from the advertising in Q2 2019 which also represented 8% of marketplace revenue as against 2% in Q2 2018.l, Anammah assured that Jumia will keep its focus on its marketing & advertising revenue stream by providing an avenue for brands to advertise on the platform.

“JumiaPay remained a key focus area and it is now offered in six countries – Nigeria, Egypt, Ivory Coast, Ghana, Morocco and Kenya.

“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.

“In Nigeria for instance, consumers can now access micro-loans offered by a local fintech startup, alongside event tickets offered by a local event ticketing provider”, she said.