Jumia has reported a year-on-year gross profit increase of 22 per cent in its 2020 third quarter report released recently.
The report showed an improvement in the operating loss, which decreased by 49 per cent compared to the previous year.
The report according to the company, was an indication that the Jumia brand was making progress towards profitability.
Commenting on the report, Co-Chief Executive Officers of Jumia, Jeremy Hodara and Sacha Poignonnec, said: “Having established Jumia as the leading pan-African e-commerce platform, we have focused over the past 12 months on firmly advancing towards breakeven. The significant progress achieved was mostly attributable to the thorough work we have done on the fundamentals of our business, with limited support from external factors such as COVID-19.
“The business mix rebalancing initiated late last year has increased our exposure to everyday product categories and, combined with enhanced promotional discipline, supported unit economics. We are making significant progress on our path to profitability with Adjusted EBITDA loss in the third quarter of 2020 decreasing by 50 per cent year-over-year.”
Jumia’s fintech solution product, JumiaPay also recorded a year-on-year increase in Total Payment Volume (TPV) by 50 per cent.
“We continued to drive robust growth of JumiaPay by more than doubling the penetration of JumiaPay TPV to over 25 per cent of GMV in the third quarter of 2020, a clear sign of our ability to drive prepayment adoption on our platform efficiently. We believe the fundamentals of our business have never been stronger, setting a robust foundation for the long term, profitable growth of Jumia,” Hodara said.
JumiaPay Transactions increased by six per cent from 2.1 million in the third quarter of 2019, to 2.3 million in the third quarter of 2020, with transactions above €10, which include prepaid purchases on the Jumia physical goods marketplace and Jumia Food platforms, growing by almost 90 per cent over the same period.
Overall, 34.1 per cent of orders placed on the Jumia platform in the third quarter of 2020 were paid for using JumiaPay, compared to 30.6 per cent in the third quarter of 2019.
According to the report, annual active consumers on Jumia reached 6.7 million in the third quarter of 2020, up 23 per cent year-over-year as the brand continued focusing on both consumer acquisition and existing consumers’ re-engagement.
Orders on the platform however reduced to 6.6 million, representing a 5 per cent year-over-year fall. This according to the company, was due to a 20 per cent decrease in digital services transactions on the JumiaPay app, while orders on the rest of the platform were stable.