Jumia, a leading pan-African e-commerce platform, has linked its revenue increase from more purchases made to its free delivery service.
Early in the year, Jumia launched its free delivery service to consumers in Lagos and Abuja, with expansion to Ibadan in Q2 2022.
According to its Q1’22 financial report, orders on Jumia experienced a 40 percent year-over-year (YoY) compared to Q1 2021. Revenue increased by 44 percent YoY, while its quarterly active subscribers increased by 28.7 percent, from 2.4 million in Q1 2021 to 3.1 million in Q1 2022. Its gross merchandise volume (GMV), i.e. the total value of products sold, also increased by 27 percent YoY.
While growth in these metrics can be linked to its fast-moving-consumer-goods and food delivery category, which grew by 180 percent YoY and 86 percent YoY, respectively, Jumia explained that it is important to note that fast and free shipping plays a significant role in repeat purchases.
The company said 57 percent of the packages it shipped in the last quarter reached consumers within 24 hours of order placement.
This was attributed to a better warehouse organisation in picking and packing items and coordinating with logistics providers and delivery riders.
These free shipping perks from online retailers are mostly available to consumers in big cities due to the high rate of e-commerce activities.
Olajide Akeem, a Jumia consumer, acknowledged that since the introduction of free delivery in January 2022, he now shops more for his groceries while paying less.
“The free delivery incentive offered by Jumia allows me to shop more for my everyday items like semo, oats, sardine and spaghetti. Rather than going to a physical market and pricing from one shop to the other, I can sit in the comfort of my home and have my items delivered to me without having to pay for shipping. The convenience of shopping online is truly amazing and to top it with free delivery means I will keep coming back to the platform”, he said.
“Now that Jumia has normalised the concept of fast, free delivery, with its improved logistics services, businesses in Nigeria need to do more to meet consumer demands for fast shipping at no extra cost,” Jumia stated.
Free shipping has become one of the top three factors affecting consumers’ decision to purchase online, closely followed by same-day delivery and free returns.
With subscription plans like Jumia Prime paving the way for free delivery, consumers in Nigeria are now more expectant of the same from every online retailer.