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Jumia confirms COVID-19 lockdowns did not help e-commerce revenues

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Jumia is optimistic of COVID-19 boost, despite poor Q1 2020 earnings report

Africa’s leading e-commerce firm Jumia released its second-quarter earnings on Wednesday showing it incurred a loss of Eur 37.6 million (N17.1 billion) in the second quarter of 2020 despite the rampaging effect of COVID-19.

According to Jumia, it did not experience any “meaningful change in consumer behavior” following the COVID-19 induced shutdown.

READ MORE: Apapa Command’s revenue rises 10.59% to N227.3 billion in the first half of 2020 – Customs 

Contemporary views suggest e-commerce firms were one of the winners in the ensuing COVID-19 pandemic induced lockdown. However, the company reported significant challenges to its operations. Here is how Jumia responded;

  • In Nigeria and South Africa, we faced significant disruption as a result of movement restriction.
  • This disruption persisted during the early part of the second quarter of 2020, before gradually easing towards the later part of the quarter.
  • Our food delivery business, Jumia Food, which was negatively impacted by restaurant shutdowns starting mid-March, resumed normal operations in late May/early June in most cities where we operate the service.
  • Across the majority of our addressable market, we experienced no meaningful change in consumer behavior, aside from increased demand for essential and every-day products and reduced appetite for higher ticket size, discretionary purchases.
  • The nature of lockdown measures put in place consisted mostly of localized restrictions of movement and partial curfews rather than nationwide lockdowns, with the former leading to less drastic changes in consumer lifestyles and behavior than all-encompassing, nationwide lockdowns.

READ ALSO: Jumia CEOs to take salary cut, create support fund for workers

What this means

Jumia’s revelations confirm fears that the COVID-19 lockdowns may not have positively impacted on the e-commerce sector whose business model requires that their gross merchandise volumes increase for them to improve margins.

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However, by confirming that Nigerians focussed more on essentials, the negative impact of the COVID-19 appears to be more severe than even expected.

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Nigerians are perhaps also cautious about their spending, avoiding expenditures that do not speak to their immediate need such as food supplies, medicare, and utilities.

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    Business News

    NCC discloses application requirements for Proof of Concept trial license

    The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.

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    NCC Building, MTN, Glo, Airtel, 9mobile, NCC, Acquisition, Teleology

    The National Communications Commission (NCC) has released application requirements for trial frequencies in certain spectrum brands under the Proof of Concept (POC) Trial license.

    This was disclosed on Wednesday, April 14, 2021, in a statement signed by the Director of Public Affairs, Dr Ikechukwu Adinde; and made public on the Commission’s verified Twitter account, @NgComCommission.

    The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.

    The requirements listed by the NCC include:

    • The PoC trial license application must only be granted to Original Equipment Manufacturers(OEMS)/Vendors, or operators in conjunction with their Original Equipment Manufacturers.
    • PoC trial shall not exceed a period of three months effective from the date of approval.
    • Equipment for Proof of Concept must be ‘Type-approved’ by the Commission.
    • Appropriate Spectrum fees must be paid in accordance with the NCC’s regulations.

    In case you missed it

    Nairametrics reported that Nigerian telco giant MTN recently announced its acquisition of an additional 10MHZ spectrum in the 800MHz band from Intercellular Nigeria Limited.

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    Business News

    Lagos State residents paid highest price for petrol in March 2021 – NBS

    The NBS revealed that the National Average price/litre of petrol was N172.68 in March 2021 compared to N145.40 in March 2020.

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    Subsidy and PIB, petrol price, PPPRA, We have sufficient PMS stock for 38 days- DPR 

    The National Bureau of Statistics (NBS) has revealed that Lagos State residents paid the highest average price for petrol in the country, in the month of March 2021, at N200.87 per litre; while Adamawa state residents paid the lowest average price in the month of March at N162.17 per litre.

    The NBS also revealed that the National Average price/litre of petrol was N172.68 in March 2021 compared to N145.40 in March 2020 and N166.24 in February 2021.

    This was disclosed in a report by the NBS CEO, Dr. Yemi Kale, yesterday, April 14, 2021, via his verified Twitter account @sgyemikale.

    On kerosene the NBS said:

    • National Average Price/litre at N361.29 in March 2020.
    • The states with the highest average were Taraba (N466.67), Ebonyi ( N450) and Benue (N448).
    • The States with the lowest average prices were Bayelsa (N250), Yobe (N296.43) and Katsina (N318.33)

    On Premium Motor Spirit (petrol):

    • National Average price/litre at N172.68 in March 2020
    • The states with the highest average were Lagos (N200.87), Ebonyi (N184.17) and Niger (N183.50)
    • The states with the lowest average prices were Adamawa (N162.17), Taraba (N162.67) and Bauchi (N164).

    What you should know 

    Recall that Nairametrics reported that the federal government has suspended plans to end its subsidy payments as reports indicate that the FG plans to spend N720 billion for the next 6 months on Premium Motor Spirit (PMS) subsidies.

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