Jumia, the top e-commerce platform in Africa, has announced its financial results for the first time with the aim of increasing stakeholders’ confidence.
In 2017, Jumia reported an 80 percent year on year growth despite recording a decrease in gross profit from 30.2 MEUR in 2016 to 27.0 MEUR .
According to Sam Chappatte, MD Jumia Kenya, the company’s shareholders are focusing on the fact that Jumia is growing fast and is progressing towards profitability.
“Jumia’s goal is super long-term in Kenya and Africa and we are operating exactly according to plan. Moreover, we are heading towards profitability,” he said.
Jumia’s gross merchandise volume (GMV) grew by 64.5 percent to 197.9MEUR (+113 percent in constant currency) in Q417, compared to 120.2 MEUR in Q416. Furthermore, Jumia marketplace platforms increased the number of order with a year on year growth of +94 percent in Q417.
Jumia’s gross merchandise volume rose by 41.8 percent year over year to 507 MEUR in 2017 (+79 percent in constant currency) from 357.5 MEUR in 2016. The increase was propelled by better macro-economic conditions and a greater relevance of the marketplace, leading to an increased number of orders and a wider customer base.
Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) was negative 120.1 MEUR while EBITDA margin as a percentage of GMV was negative 23.7 percent compared to negative 25.5 percent in the previous year. This shows continued investment in developing the ecosystem and continuous increase in efficiency.
Sacha Poignonnec and Jeremy Hodara, Jumia co-CEOs said, “We made great progress in 2017 with significant growth of the business driven by technological innovations and improved relevance of the offering of goods and services. This growth is demonstrating the robust momentum in our core businesses and markets, and the increased adoption of online services by African consumers. We are also seeing good results from our strategy to further develop our logistics platform and our payment platform. Our customers continue to benefit from increasing access to great services, quality products, improved customer experience and the tremendous convenience of being able to shop online.”
In 2017, Jumia attained the threshold of 550 million visits across Africa while the number of products increased from 50,000 in 2012 to more than 5 million. Furthermore, Jumia reported great success in its Black Friday segment where the platform received over 100 million visits, becoming the top sales driver compared to new customers, items sold, orders, and visits.
Jumia handled more than 8 million packages through the Jumia logistics platform. Jumia also reduced commissions over the past year to make decrease the cost for customers and for vendors.
Jumia introduced its own payment platform, JumiaPay, to improve transactions between merchants and consumers and tailor its solutions to specific local needs.
Jumia also launched Jumia One, a consumer-facing payment mobile application that allows customers to access digital services such as data, airtime, utilities, and TV with ease. Jumia One is integrating more financial and online solutions to enable consumers to save time and money and access a wide range of services from a one-stop-shop application.
Jumia is also set to introduce geolocation technology to increase its efficiency in delivering products to its customers.
According to Jumia Kenya’s MD, the company plans to double its investment in Kenya in order to grow its business two-fold. The company also has a target of reaching 5 million products and increasing the number of vendors by at least twice the current number.
Additionally, Jumia’s shareholders could potentially consider launching an initial public offering (IPO) in the future.
Jumia is also positive that it will remain on its current growth path which will increase the opportunities for vendors to enhance their businesses.