Home Business Jumia reports €17.3 million profit - Q2 2019

Jumia reports €17.3 million profit – Q2 2019

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Jumia Technologies AG has announced that it recorded €17.3 million, a 94 per cent year-on-year (yoy) increase in gross profit for the quarter ended June 30, 2019.

We continue to deliver on our financial strategy of generating strong growth of our topline drivers, while accelerating monetization, driving cost efficiencies and developing JumiaPay. During the second quarter of 2019, our GMV increased by 69% year-on-year and our Gross profit grew by 94%. Our Adjusted EBITDA loss as a percentage of GMV decreased by 562 basis points (5.62 percentage points) and our Operating loss, amounting to E66.7 million, decreased as a percentage of GMV by 148 basis points (1.48 percentage points) commented Sacha Poignonnec and Jeremy Hodara, co-CEOs of Jumia. These results reflect our continued focus on offering a relevant and engaging online shopping and lifestyle destination for consumers, while providing our sellers with an attractive value proposition and a platform to grow their businesses. We remain focused on all aspects of our growth strategy, particularly JumiaPay, as we continue to drive its usage in our markets.

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Meanwhile the number of active consumers as at June 30, 2019 stood at 4.8 million, up from 3.2 million a year ago and 4.3 million at the end of the first quarter of 2019 while its Adjusted EBITDA loss as a percentage of GMV improved from negative 21.4 per cent in the second quarter of 2018 to negative 15.8 per cent in the second quarter of 2019.

  • Increased monetization
    • In parallel with the strong increase in GMV and Active Consumers, Marketplace revenue increased by 90% compared to the second quarter of 2018 as we continued to drive monetization from diversified streams of revenue including Commissions, Fulfillment, Value Added Services and Marketing & Advertising services.
    • Gross profit also grew faster than GMV, increasing by 94% compared to the second quarter of 2018, as a result of the increased monetization rate.
    • We continued to drive monetization in a gradual manner, introducing attractive services to our sellers aimed at supporting the growth of their businesses. In the second quarter of 2019, we placed a particular focus on our Marketing & Advertising revenue stream by continuing to develop an attractive suite of marketing products. Marketing & Advertising revenue grew by 490% year over year and represented 8% of Marketplace revenue in the second quarter of 2019 compared to 2% of Marketplace revenue in the second quarter of 2018.

“These results reflect our continued focus on offering a relevant and engaging online shopping and lifestyle destination for consumers, while providing our sellers with an attractive value proposition and a platform to grow their businesses. Despite the challenges in the economy, we remain focused on all aspects of our growth strategy, particularly JumiaPay, as we continue to drive its usage in our markets”, they said.

The company further revealed that it had received information alleging that some of its independent sales consultants, members of the company’s JForce programme in Nigeria, might have engaged in improper sales practices, while adding that it identified several JForce agents and sellers who collaborated with employees in order to benefit from differences between commissions charged to sellers and higher commissions paid to JForce agents.

JForce is a decentralised sales force with dozens of thousands of agents which allows Jumia to physically interact with consumers.

According to the company, the transactions in question generated approximately 1 per cent of its GMV in each of 2018 and the first quarter of 2019 and had virtually no impact on the firm’s 2018 or 2019 financial statements.

“We have terminated the employees and JForce agents involved, removed the sellers implicated and implemented measures designed to prevent similar instances in the future. The review of this matter is closed. More recently, we have also identified instances where improper orders were placed, including through the JForce programme, and subsequently cancelled.

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