Jumia Technologies still far from profitability, posts $42.7m in Q3 revenue

GMV up 8.1% to $238.1m on order, consumer rise Q4 costs in sales, advertising, technology, staff

JUMIA AG TECHNOLO GIES, THE ONLINE MARKETPLACE and store listed on the New York Stock Exchange (NYSE), reported an 8.5 percent year on year increase to $42.7 million in its Q3 revenue, from $39.3 million recorded in the corresponding quarter of 2020.

It also recorded an 8.1 percent year on year increase in gross merchandise value (GMV) to $238.1 million during the third quarter of 2021, up from $220.4 million recorded during the same period last year. This represents a sign of GMV inflection, initiated by an acceleration in consumers and orders for the period.

The leading Africa e-commerce platform, in its thirdquarter financial statement just released on its website and on the New York bourse, noted that its marketplace revenue reached $25.3 million in the third quarter of 2021, down seven percent on a year-over-year basis. Also, the company’s commission revenue, which is net of consumer incentives in the form of promotional discounts, reached $8.1 million, down 21 percent year-over-year.

Jumia further reported that its fulfillment revenue declined eight percent from last year to $8.8 million as consumer incentives, in the form of shipping discounts and free shipping campaigns, increased from $0.6 million in the third quarter of 2020 to $1.2 million in the third quarter of 2021, while FirstParty revenue accelerated 41 percent year on year to $16.2 million in the review period.

In addition, the company’s gross profit decreased by six percent from $27.1 million in the third quarter of 2020 to $25.5 million in the third quarter of 2021, while the gross profit after fulfillment expense reached $3.5 million compared to $7.6 million in the third quarter of 2020, this being as a result of an increase in consumer incentives, which is regarded as growth investments.

On the other hand, fulfillment expenses increased by 13 percent year-over-year while orders accelerated by 28 percent over the same period, as the company maintained focus on logistics costs efficiencies.

In June 2021, Jumia increased the pace of marketing investments which it maintained on a monthly level throughout the review quarter to reignite the growth engine on the back of 18 months of reduced marketing expense. As a result, Jumia recorded a 228 percent year on year rise in its sales and advertising expenses to $24 million in the third quarter of 2021.

The increase in marketing investments was implemented across marketing channels, with 60 percent of the increase allocated to online perforpartner mance marketing across the full consumer journey funnel. The remaining 40 percent was allocated to offline media and video advertising, which were largely curtailed in 2020.

While the eCommerce giant recorded an eight percent year over year rise in annual active consumer reach to 7.3 million in Q3, which was supported by a strong acceleration in new consumer additions during the quarter, Jumia recorded a 34 percent year over year increase in its JumiaPay transactions to three million during the quarter.

The growth in the transaction was supported by accelerating volume growth across the business, in the Food Delivery category in particular. Consequently, there was a 15 percent and 17 percent rise in constant currency basis in the total payment value (TPV) to $64.5 million as was supported by the growth in gross merchandise value (GMV) and the JumiaPay app services.

During the quarter under review, orders reached 8.5 million, the highest ever number of quarterly orders, up 28 percent year-over-year. The growth trends by product category illustrate the success of the strategic focus on everyday product categories, supported by increased marketing investments: