Jumia’s second quarter (Q2) financial results showed improvement with an increase in gross profit and a decrease in operating loss compared to the same period last year, signifying its progress in efforts to become a profitable e-commerce business.
In its results for the quarter ended June 30, 2020, Jumia increased its gross profit by 38 percent to €23.3 million from €16.8 million in the second quarter of 2019, while its operating loss reduced to €37.6 million in the second quarter of 2020, decreasing 44 percent on a year-over-year basis.
The increase in profit, according to the company, as a result of the increase in marketplace revenue, which reached €23.6 million in the second quarter of 2020, up 38 percent from the same period last year.
During the second quarter of 2020, gross profit after fulfillment expense reached a record €6.0 million compared to a loss of €0.7 million in the second quarter of 2019, demonstrating continued unit economics improvement as Jumia grows usage on its platform possibly with the help of the Covid-19 pandemic which pushed more people to online shopping.
“We have made significant progress on our path to profitability in the second quarter of 2020, with operating loss decreasing 44 percent year-over-year to €37.6 million,” Jeremy Hodara and Sacha Poignonnec, co-chief executive officers of Jumia, said.
They said this was achieved thanks to an all-time high gross profit after fulfillment expense of €6.0 million and record levels of marketing efficiency with sales and advertising expense decreasing by 51 percent year-over-year.
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“We are navigating these uncertain times of COVID-19 pandemic with strong financial discipline and operational agility which positions us to emerge from this crisis stronger and even more relevant to our consumers, sellers, and communities,” saidbHodara and Poignonnec.
The e-commerce company also made progress in usage growth as the number of active customers, orders placed and Gross Merchandise Value (GMV) showed a significant increase for the quarter.
The report showed that annual active consumers reached 6.8 million, a year-over-year increase of 40 percent, while orders on the platform grossed 6.8 million, a year-over-year increase of 8 percent. GMV was €228 million, a year-over-year decrease of 13 percent compared to GMV in the second quarter of 2019.
The company’s payment service, JumiaPay, also recorded impressive improvement figures, as Total Payment Value surged by 106 percent from €26.0 million in the second quarter of 2019 to an all-time high of €53.6 million in the second quarter of 2020, surpassing the record set during the fourth quarter of 2019 of €45.6 million.
Likewise, on-platform penetration of JumiaPay as a percentage of GMV increased to 23.5 percent in the second quarter of 2020, more than twice the level of penetration in the second quarter of 2019 of 9.9 percent. Transactions on JumiaPay reached 2.4 million, a year-over-year increase of 36 percent, representing 35.6 percent on-platform penetration in terms of orders.
With sales and advertising, Jumia decreased expenses by 51 percent from €14.9 million in the second quarter of 2019 to €7.2 million in the second quarter of 2020, its lowest level in more than three years. Adjusted EBITDA loss stood at €32.9 million in the second quarter of 2020, decreasing 26 percent on a year-over-year basis.
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