Jumia Declares 58% GMV Growth in Q1
Jumia has announced a 58 per cent growth in its Gross Merchandise Volume (GMV). This development was made known in its first quarter 2019 financial results.
As stated by the results, Jumia’s adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) loss as a percentage of GMV, improved from negative 19.8 per cent in the first quarter of 2018 to negative 16.4 per cent in the first quarter of 2019.
Its gross profit margin as a percentage of GMV increased from 5.6 per cent in the first quarter of 2018, to 6.5 per cent this quarter, as a result of the increased GMV monetisation rate.
The Co-CEOs of Jumia, Sacha Poignonnec and Jeremy Hodara, believe the results showed further development of JumiaPay and highlighted its investment and partnership with Mastercard.
“We believe that Jumia is increasingly relevant for consumers and sellers in Africa. Looking ahead, we remain focused on our core operations, driving consumer adoption and engagement on our marketplace, increasing the penetration of JumiaPay, while continuing to improve our financial profile and making a sustainable impact on the continent.”
“Our strong GMV growth combined with the attractive value proposition we offer both sellers and consumers are a key engine of monetisation, which we derive from diversified revenue streams such as commissions, fulfillment, value added services, marketing and advertising services, the Co-CEOs were quoted to have explained in a joint statement.
The result revealed that gross profit margin as a percentage of GMV increased from 5.6 per cent in the first quarter of 2018 to 6.5 per cent this quarter, as a result of the increased GMV monetisation rate. And the company’s Gross Profit also exceeded fulfillment expense this quarter.
Speaking further, they explained: “Leveraging our strong brand awareness and highly localised marketing approach, we have been able to gain 205 basis points of marketing efficiency this quarter, bringing the sales and advertising expense from 7.2 per cent of GMV in the first quarter of 2018 to 5.1 per cent in the first quarter of 2019.”
“The €50 million investment by Mastercard into Jumia, in a concurrent private placement with our Initial Public Offering, marked another milestone in the development of JumiaPay and a validation of its potential. We are partnering with Mastercard on a number of initiatives, including the development and marketing of co-branded products.”
The result also showed that in the first quarter of 2019, Jumia’s marketplace continued to gain depth and diversity owing to its focus on attracting quality sellers to its platform and providing consumers with an expanding range of products and services.
“An example of this strategy is the partnership we announced this quarter with the technology leader, Xiaomi. As part of this partnership, we are opening the Mi official store on our platform with the ability to offer a number of Xiaomi products on an exclusive basis,” the statement added.
Jumia is listed on the New York Stock Exchange (NYSE).
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