Jumia posted strong third quarter results following a series of adjustments and improvements made to the core units of the e-retail giant.
In the latest third quarter results, the largest e-commerce company in Nigeria grew gross profit by 22 percent to €23.2 million year-on-year.
Gross profit after fulfillment expenses rose to €6.6 million in the third quarter, up from €1.7 million filed in the same quarter of 2019.
Jumia reduced sales and advertising expense by 55 percent to €6.2 million year-on-year, the lowest quarterly amount since 2017.
The e-commerce company continued to deepen marketing efficiency as Sales & Advertsing expense per Order declined by 53 percent to €0.9 in the third quarter, down from €2 recorded in the corresponding quarter of 2019.
Jumia reduced operating loss by 49 percent to a three-year low of €28.0 million while JumiaPay TPV rose by 50 percent to €48 million. More than doubling on-platform TPV penetration from 12.2 percent of GMV in the third quarter of 2019 to 25.6 percent of GMV in the third quarter of 2020.
However, the company’s Gross Merchandise Volume (GMV) declined by 28 percent year-on-year to €187.3 million in the third quarter of 2020. Largely due to the series of adjustments made to the core units last year.
Speaking on the company’s performance, Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers, Jumia, “We are making significant progress on our path to profitability with Adjusted EBITDA loss in the third quarter of 2020 decreasing by 50% year-over-year.”
“Having established Jumia as the leading pan-African e-commerce platform, we have focused over the past 12 months on firmly advancing towards breakeven. The significant progress achieved was mostly attributable to the thorough work we have done on the fundamentals of our business, with limited support from external factors such as COVID-19. The business mix rebalancing initiated late last year has increased our exposure to everyday product categories and, combined with enhanced promotional discipline, supported unit economics.
“In addition, we made multiple enhancements across our logistics and marketing operations that led to a decrease in fulfillment and marketing expenses for the third quarter of 2020 by 20% and 55% respectively, on a year-over-year basis. The portfolio optimization completed last year, along with overhead rationalization, contributed to a decrease in G&A costs excluding share-based compensation of 24% year-over-year in the third quarter of 2020.
“Lastly, we continued to drive robust growth of JumiaPay by more than doubling the penetration of JumiaPay TPV to over 25% of GMV in the third quarter of 2020, a clear sign of our ability to drive pre-payment adoption on our platform efficiently. We believe the fundamentals of our business have never been stronger, setting a robust foundation for the long term, profitable growth of Jumia.”
