Looking through the Jumia Q3 result, the outlook seems positive overall. I believe it is safe to say Jumia’s global business has continued to show an improvement quarter on as the Company recorded significant increase across its major financial indices in its Q3 2019 financial result as released yesterday.
From the almost 18-page document on its website, revenue grew by 52% even as it closed its Gross Profit with a 45% increase year-over-year. The Gross profit increased from €12.5 million in the third quarter of 2018 to €18.1 million in the third quarter of 2019, because of increased platform monetization.
While the Company’s Gross Merchandising Volume (GMV) increased by 39% this quarter compared to the third quarter of 2018, the Annual Active Consumers for the 12-month period ending September 30, 2019, grew by 56% and number of Orders for the quarter grew by 95% on a year-on-year basis.
Flipping through the report, from €198 million in the third quarter of 2018, the GMV increased to €275 million in the third quarter of 2019. It also stated that the results were affected by changes in commercial calendar dates, particularly the Jumia Anniversary campaign which is a Tier 1 campaign that took place in its entirety in the third quarter of 2018 while approximately half of it took place in 2019 during the second quarter.
The Co-Chief Executive Officer, Jumia, Sacha Poignonnec and Jeremy Hodara stated in the report that the company is determined to use technology to drive financial inclusion among its consumers even as it keeps reinventing itself to meet up with stakeholder demand. They said they were making significant progress in the usage and relevance of their platform for consumers and sellers and are positioning Jumia as the digital destination of choice for everyday needs in Africa.
They also highlighted the huge success they had recorded with their payment and fintech business with JumiaPay, which according to them, has shown very strong growth momentum on both volume and transaction metrics.
According to the partners, for their financial strategy, their goal is to be able to balance growth, JumiaPay development, monetization and cost efficiencies, with even greater emphasis on cash discipline and efficiency. For their growth strategy, Jumia favours business verticals and product categories that drive adoption, repeat purchase and usage. On the cost efficiency front, the company says it seeks to optimize portfolio of assets and geographies to ensure efficient capital allocation.
According to the report, this strategy is expected to enhance Jumia’s focus on its core assets and contribute to building a healthy foundation for the long-term growth and success of Jumia.
There were particular highlights about JumiaPay as a key focus area to expand into off-platform payments in the future. The report stated that innovation has started witnessing significant appreciation among Jumia consumers as the Total Payment Volume (“TPV”) reached €32 million in the third quarter of 2019. This represents a 95% increase compared to the same period in 2018. Notably, the number of JumiaPay Transactions reached 2.1 million, representing a 262% increase from the same period last year. JumiaPay presently exists in Nigeria, Egypt, Ivory Coast, Ghana, Morocco and Kenya.
As a business enthusiast, although the numbers may not look like it at this time, one thing that warms my heart though is the fact that Jumia is making long-term investment in Africa and charting the future of e-commerce on the continent. It may take a while; probably some long winding years and the road might really be long, however, I think it will be a worthwhile investment in the end.
Toheeb Adeyeju is a financial and business enthusiast, and he writes from Lagos.