e-Commerce giant Jumia’s third-quarter results are out. The Africa-wide country reported impressive profits amid huge operating losses. $25.5 million was recorded as gross profits, according to the company, while operating losses for the third quarter went up to $64 million.
Operating losses for the quarter is about 250 per cent greater than gross profits. Jumia recorded a 5.7 per cent decrease in YoY gross profit from the same quarter from the previous year,
Irrespective of the figures it published and the huge operating losses incurred, Jumia witnessed increased growth during the quarter. All key pointer indicators showed the company saw increased growth in the quarter. Jumia recorded an all-time high order record of 8.5 million, the figure is up 28 percent YoY, and is the company’s fastest growth rate in the last seven quarters. According to Jeremy Hodara and Sacha Poignonnec, co-CEOs of Africa’s e-commerce platform, the growth acceleration strategy the company unleashed during the second quarter’s end had a great effect on the third quarter. “Our growth acceleration strategy, initiated at the end of the second quarter of 2021 is starting to pay off. We are making investments in Sales & Advertising and Technology to further enhance consumer education, brand consideration as well as the relevance and convenience of our platform”, they said.
They also emphasized that although the growth rate is starting to change, there is more to come and this is just the beginning and that these changes would become more evident over the course of the next few months. “We believe that these investments are long-term in nature and that accelerating growth will ultimately contribute to profitability, leveraging the strong efficiency gains achieved throughout 2020 and the first half of 2021. We are more confident than ever about the strong growth potential of our markets and our ability to build a growing business across e-commerce and fintech activities”, they added.
Active customers increased to 7.3 million in the third quarter, up 8 percent YoY. The fast-moving consumer goods category was the company’s fastest-growing category in terms of sales. In the third quarter, the category recorded its largest-ever sales volume. Growth in the demand for groceries contributed to this milestone. Food delivery followed the FCMG category as the second-fastest-growing category on the basis of sales. Food delivery was up almost 40 percent YoY. The third quarter saw more than 2 million orders, surpassing the previous milestone recorded in the fourth quarter of 2020.
Jumia’s Gross Merchandise Volume (GMV) was up 8 percent YoY at $238.1 million recorded in the third quarter. GMV in the second quarter was 223.5 million. According to the third quarter result published, JumiaPay was the fastest growing area, and consumer electronics and gadgets accounted for 36 percent of GMV. The FMCG category was the second-fastest-growing area in GMV.