Jumia Shares Drop to $13.47 as GMV Drops by 13% in Q2 2020
Despite some noticeable improvements in Jumia’s second-quarter financial results, investors that jumped on the company’s stock prior to its financial statements release pulled back as the Gross Merchandise Value (GMV) declined by 13 percent even with COVID-19 lockdown.
In the financial statement released by Jumia last week, the company’s operating loss reduce for the first time in six quarters. While revenue declined by 10 percent when compared with the second quarter of 2019 to €34.9 million, better than the 18.7 percent predicted by experts.
Accordingly, the company’s operating losses declined by 44 percent year-on-year to €37.6 million. This is largely due to the company’s new strategy of cutting down costs both in the advertisement and other aspects of the organisation to the lowest levels since 2017.
Also, profit on fulfillment expense rose to €6 million during the quarter, up from €0.7 million decline posted in the same quarter of 2019 and indicated that Jumia is no longer making losses on fulfilling orders.
Jumia GMV declined by 13 percent year-on-year to €228 million in the quarter under review, one of the main reasons investors held back on the stock.
GMV measures the value of goods sold on the platform at a specified period.
Prior to the release, investors had increased their holding of jump shares, saying the company would have recorded substantial sales like its other global e-commerce counterparts due to COVID-19 lockdown that forced most to shop behind the computer.
But the success recorded on JumiaPay during the quarter held few investors back. For instance, the company processed 2.3 million transactions valued at $39 million in the first quarter. This number rose to 2.4 million transactions worth €53.6 million in the second quarter, representing a 106 percent increase.
In general, buyers placed 35.6 percent of their total orders using JumiaPay. Suggesting that JumiaPay is growing among Jumia customers and outside the platform. Also, the company recorded a triple-digit growth for orders above €10.
However, despite reporting lower revenues, the company was able to cut losses and increased gross profit by reducing advertisement costs.
“We have made significant progress on our path to profitability in the second quarter of 2020, with Operating loss decreasing 44% year-over-year to €37.6 million. This was achieved thanks to an all-time high Gross Profit after Fulfillment expense of €6.0 million and record levels of marketing efficiency with Sales & Advertising expense decreasing by 51% year-over-year,” commented Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia.
“We are navigating these uncertain times of COVID-19 pandemic with strong financial discipline and operational agility which positions us to emerge from this crisis stronger and even more relevant to our consumers, sellers and communities.”
The price of Jumia shares declined from $20.50 per share it traded on August 10, 2020 to $13.47 on Monday as at 1:00 am Nigerian time.
Jumia Nigeria Appoints Sunil Natraj as CEO, Outlines Ambitious Expansion Plans
Former Jumia Ghana CEO to Lead E-Commerce Giant as Massimiliano Spalazzi Steps Down
Jumia Nigeria, a prominent player in the e-commerce sector, has announced the appointment of Sunil Natraj as its new CEO.
Natraj, the former CEO of Jumia Ghana, will take the helm of the e-commerce business in January 2024, succeeding Massimiliano Spalazzi, who has been with Jumia Group for 11 years and will be stepping down in December 2023.
The announcement came during a media parley held in Yaba, Lagos, Nigeria, with Francis Dufay, the CEO of Jumia Group, unveiling Natraj as the new leader.
Natraj expressed Jumia’s commitment to becoming a truly Nigerian company and continuing the initiatives started by Spalazzi.
“We want to continue what Spalazzi started,” Natraj stated, emphasizing Jumia’s vision to expand its presence beyond Lagos.
He disclosed plans to extend operations to additional Nigerian cities, with Akure and Ilorin on the radar and a focus on cities en route to Ibadan, Warri, and Benin in the first quarter of 2024.
The overarching strategy is to create a comprehensive network covering the entire country.
Dufay outlined the ambitious goal of targeting cities with populations exceeding 20,000 people, citing successful precedents in Ghana, Cote d’Ivoire, and Senegal.
He acknowledged the challenges faced by Jumia, including a workforce reduction in Q4 2022 and a 73% cut in advertising budgets in Q3 2023.
Despite the hurdles, Dufay highlighted Nigeria as Jumia’s largest market and affirmed the company’s determination to navigate and thrive in the ever-evolving e-commerce landscape.
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Flutterwave Expands Financial Frontier: Acquires Money Transfer Licenses for 13 U.S. States
Africa’s Leading Payments Tech Firm Facilitates Faster, Affordable, and Secure Transfers between the U.S. and Africa
In a significant move towards advancing financial connectivity between Africa and the United States, Flutterwave, Africa’s premier payments technology company, has proudly announced its acquisition of money transfer licenses for 13 key U.S. states.
This strategic expansion aims to expedite, streamline, and secure the transfer of money from the U.S. to Africa and back.
The states covered by the newly acquired licenses include Arizona, Arkansas, Maryland, Michigan, Delaware, Georgia, Maine, Mississippi, Missouri, New Hampshire, Iowa, North Dakota, and South Dakota.
These additions, combined with Flutterwave’s existing partnerships and licenses, now empower the company to serve customers seamlessly across 29 states in the U.S.
Money transfer licenses, issued by state regulators, play a pivotal role in enabling financial technology companies like Flutterwave to engage in the transmission of money.
The acquisition of these licenses fortifies Flutterwave’s commitment to regulatory compliance, safety, and the soundness of its services.
Stephen Cheng, Executive Vice President, Global Expansion and Partnerships at Flutterwave, emphasized the significance of this milestone.
“Getting these licenses expands our regulatory footprint, demonstrates our ability to deliver services with safety and soundness, and fosters trust among regulators, partners, and customers,” stated Cheng.
“We’re growing and are committed to servicing customer needs in as many geographies as possible, particularly with a significant African diaspora.”
Flutterwave’s popular solutions, such as the Send App, are set to benefit greatly from this expansion.
The Send App facilitates easy and secure money transfers between the U.S. and Africa, catering to both individual users and enterprises that rely on Flutterwave for global last-mile payouts.
“Sending money between the U.S. and Africa has been challenging for the African diaspora. These licenses pave the way for Flutterwave to make the Send App available to the African diaspora in the U.S., offering a super user-friendly money remittance experience,” explained Olugbenga Agboola, Founder and CEO at Flutterwave.
“Our mission is to connect Africa to the world and the world to Africa by simplifying payments for endless possibilities. These licenses move us one step closer to our vision, and we will continue to expand this feat to ensure coverage for all states in the U.S. and beyond.”
Flutterwave remains steadfast in its commitment to providing accessible remittance services across the U.S. and has outlined plans for further expansion of licensing coverage in the near future.
This ambitious endeavor reflects the company’s dedication to fostering financial inclusion and creating a seamless financial bridge between continents.
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