Leading African e-commerce company Jumia Technologies has released third-quarter earnings. Shares fell on a decline in revenue, but the move could be overdone as the company shifts its business to improve profitability.
The gross merchandise value fell 28 percent year-over-year in the third quarter for Jumia Technologies.
Jumia Technologies posted a 49 percent reduction in operating losses to $33 Million. The Nigerian based firm recorded a gross profit of $27.3 Million which is a 22 percent increase while using $7.3 Million on Sales and Advertising, the lowest quarterly amount in three years.
Phones and electronics made up 56 percent of sales in last year’s third quarter. That figure fell to 43 percent in the current third quarter.
According to Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia, the online shopping platform is making significant progress on its path to profitability with Adjusted EBITDA loss in the third quarter of 2020 decreasing by 50 percent year-over-year.
Jumia said that disruptive effects of the COVID-19 pandemic continued playing out during Q3, 2020, but with lesser supply and logistics disruption than was seen in the first half of 2020.
The platform which has a presence in several countries in Africa, including Kenya, said that while the Covid-19 pandemic created economic challenges, consumer behavior was not altered, and neither did it encourage uptake of e-commerce at a pan-African level. Jumia ended the quarter with 6.7 million active consumers, an increase of 22.8pc year-over-year.
The supply and logistics disruption that the platform encountered in selected countries, especially in food delivery, largely subsided in the third quarter.
As part of its plan to reach out to more consumers, Jumia is currently piloting a pre-paid physical and virtual card in Egypt, in partnership with Mastercard and ADIB, a leading bank in the Middle East & North Africa region.
Jumia marketplace is present in 11 countries in Africa, the platform where a large diverse group of sellers offer smartphones, consumer electronics, fashion and apparel, home and living, consumer packaged goods, beauty and perfumes etc, to consumers. Other services include restaurant food delivery, hotel and flight booking, classified advertising, airtime recharge and “instant delivery”.
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