Jumia posts 11% increase in gross profit as monetization drives growth in Q1

Africa’s e- Commerce market leader, Jumia has released its 2021 first quarter report, recording 11 percent year-on-year ( YOY) gross profit increase, as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss decreased by 24 percent over the same period. The report also showed a sixth consecutive quarter of positive Gross Profit After Fulfillment Expense, which reached €6.2 million, more than doubling YOY.

According to the e-commerce company, the report is a reflection of a solid progress towards profitability, with gradual monetization and cost discipline as major drivers.

“Our first quarter results reflect solid progress towards profitability. The drivers remain consistent; selective and disciplined usage growth, gradual monetization and continued cost discipline.

“Adjusted EBITDA loss contracted by 24 percent YOY, reaching €27.0 million. Our strategy to increase our exposure to everyday product categories continues to yield positive results, enhancing the relevance of our marketplace for consumers,” said Jeremy Hodara and Sacha Poignonnec, CoChief Executive Officers of Jumia.

As contained in the report, Jumia is making significant inroads in payment and fintech, with 37 percent of Orders in Q1 2021 completed using Jumiapay. The report revealed that Total Payment Volume on Jumiapay increased by 21 percent from €35.5million in the first quarter of 2020 to €42.9million in the first quarter of 2021.

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On a constant currency basis, TPV increased by 35 percent YOY. On-platform penetration of Jumiapay as a percentage of gross merchandise value (GMV) increased to 26.0 percent in the first quarter of 2021 from18.7 percent in the first quarter of 2020.

Jumiapay Transactions increased by 7 percent from 2.3 million in the first quarter of 2020 to 2.4million in the first quarter of2021. Overall, 36.7 percent of Orders placed on the Jumia platform in the first quarter of 2021 were completed using Jumiapay, compared to 35.5 percent in the first quarter of 2020. Jumia Food and on- demand services accounted for 22 percent of orders and 9 percent of GMV in the first quarter of 2021.

“We have raised over $570m over the past 6 months, strengthening our balance sheet & increasing our strategic flexibility. We are confident we have all the right ingredients to continue to build a growing business across both our e-commerce and fintech activities,” said Jumia disclosing that it made significant steps towards the $ 10billion market capitalization.

Likewise, annual active consumers reached 6.9 million in the first quarter of 2021, up 7 percent YOY, as the platform continued to acquire new consumers and engage existing ones. Orders reached 6.6 million, up 3 per cent YOY, a reversal of the declining trend observed over the prior two quarters.

Jumia also recorded operating loss of € 33.7million in the first quarter of 2021 decreasing by 23 percent on a YOY basis demonstrating meaningful progress on the brand’s path to profitability. GMV was €165.0 million, down 13 percent on a YOY basis and 5 percent on a constant currency basis.