Jumia, Africa’s leading online marketplace, recorded a 13 percent decline in Gross Merchandise Value (GMV) from €189.6 million in the first quarter (Q1) of 2020 to €165.0 million in the first quarter of 2021.
This was despite Amazon, Alibaba and other global e-commerce companies posting high GMV due to the surge in online orders because of ongoing movement restrictions in most nations.
Annual Active Consumers rose by 6.9 percent to 6.9 million in the quarter under review, up from 6.4 million in the same quarter of 2020, the leading e-commerce stated in its financial statements.
Orders grew by 3 percent year on year to 6.6 million from 6.4 million posted in the corresponding quarter of 2021.
Gross profit expanded by 10.9 percent from €18.4 million in Q1 2020 to €20.4 million in Q1 2021. While gross profit after fulfillment expense rose by 149.5 percent to €6.2 million, up from €2.5 million achieved in Q1 2021.
Sales and advertising expense moderated to €8.1 million in the quarter under review, representing a decline of 9.1 percent from €8.9 million posted in Q1 2020.
Technology and content expense stood at €6.9 million in Q1 2021, below €7.2 million in Q1 2020. G&A expense, excluding SBC improved from €24.4 million decline posted in Q1 2020 to €20.3 million decline in Q1 2021.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) also improved by 24.2 percent to a €27 million decline in Q1 2021 from €35.6 million.
Similarly, operating loss improved by 23 percent from €43.7 million posted in Q1 2020 to €33.7 million in Q1 2021.
Commenting on the company’s performance Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia, said “Our first quarter results reflect solid progress towards profitability. The drivers remain consistent: selective and disciplined usage growth, gradual monetization and continued cost discipline. The first quarter of 2021 was the sixth consecutive quarter of positive gross profit after fulfillment expense, which reached €6.2 million, more than doubling year-over-year, while Adjusted EBITDA loss contracted by 24% year-over-year, reaching €27.0 million”.
“Our strategy to increase our exposure to everyday product categories continues to yield positive results, enhancing the relevance of our marketplace for consumers. We are making further inroads in payment and fintech with 37% of Orders in the first quarter of 2021 completed using JumiaPay. Last but not least, we have raised over $570 million over the past six months, strengthening our balance sheet and increasing our strategic flexibility.
“We are confident we have all the right ingredients to continue to build a growing business across both our e-commerce and fintech activities.”
Despite Global E-commerce Growth, Emerging Markets Still Off-limits Due to Constraints
E-commerce growth is predicted to reach the pre-pandemic level by the end of this year. However, Fast-Growing and Emerging regions remain excluded from access to global e-commerce due to prevailing constraints on cross-border shopping.
With global e-commerce sales predicted to reach $4.9 trillion by the end of this year, e-commerce has shaped new consumer habits when it comes to shopping preferences. Despite these predictions, e-commerce growth and accessibility in certain regions is still off-limits due to existing constraints that could be solved—with the right timing and approach.
In the first quarter of 2021, global e-commerce recorded $876 billion in sales—up 38% year-over-year, with predictions of a continued growth of 24.5% by 2025. Yet, the surge has not been as widespread as it would seem at a first glance. Huge numbers of the population in Fast-Growing and Emerging markets are unbanked—as many as 50% of Africans are still financially excluded, South and Central Americans following close behind with 38%. Because of this, certain regions are facing limitations when it comes to cross-border e-commerce.
Frank Breuss, CEO and co-founder of Nikulipe, a Fintech company creating and connecting Local Payment Methods to access Emerging and Fast-Growing Markets, points out that, while each Emerging Market has its own specific issues around cross-border payments, there are three main ones that stand out as most prevalent.
“Problems that are stifling growth in Fast-Growing and Emerging markets have been around for ages. Variety of payment cards, country-specific legislation and currency restrictions, as well as logistics are among the key issues hindering e-commerce growth. For example, while payment cards like Visa and Mastercard are widely available in North America or Western Europe, they’re not easily accessible in Fast-Growing and Emerging markets. Even if consumers have payment cards, these are often local ones, intended for domestic use only, meaning they cannot be used to purchase goods from international merchants.”
Breuss elaborates that the situation is similar with bank transfers. For those who have accounts with local banks, these financial institutions, in most cases, are not well-connected to the banking network internationally, making cross-border bank transfers very slow and expensive.
Country-specific legislations or the lack of them are also ongoing struggles for Fast-Growing and Emerging markets. Operational payment limits, where payment orders can be placed only on working days during certain hours, is something that Latin America deals with. Fragmented market is an ongoing headache for Africa—with over 40 different currencies and regulators, it poses hurdles to international merchants. According to Breuss, even if a consumer is able to purchase goods or services off an international website, the merchant might not have easy access to the payment itself.
Logistics issues like shipment restrictions or custom hold ups are another additional battle for many Emerging markets, adds Breuss. International merchants have to figure out ways to get goods to their clients in these regions in time, as well as overcome customs holdups, which add up to delays.
To help solve these issues for international Merchants and at the same time include as many consumers in global e-commerce as possible is not an easy task—it takes time, local know-how and perseverance, Breuss notes.
“A certain lack of clear regulations and laws in Emerging Markets up the complexity of introducing new solutions. First of all, it’s key to understand the markets and their nuances, in order to offer relevant local payment methods that are suitable for consumer needs in each market. Partnering up with reliable payment solutions providers could aid in handling money flow from Fast-Growing and Emerging markets back to the merchant.”
With issues like payment and card limitations as well as logistics, Fast-Growing and Emerging Markets are ripe for new solutions. Helping solve the long-lasting issues, could eventually draw exclusion from global e-commerce to a close. If consumers continue to show their wish to shop internationally, more merchants will try to find a solution to meet the demand—and consequently, bring more pressure on legislation to adopt the needed changes. Now, with the consumers in Emerging Markets doing exactly that, it seems to be the right time to start solving the complexities.
Konga Offers Discount On Back To School Items
Konga, one of Nigeria’s leading e-commerce giants, has rolled out a mouth-watering 60% discount offer for students, parents, educational institutions and other categories of shoppers for its Back to School promotion.
The Konga Back to School promo runs from Monday, August 23 through Sunday, September 19, 2021.
The promotion has witnessed a throng of excited shoppers besieging the Konga website, and its network of retail stores spread across Nigeria for the month-long deals.
Checks indicate that early bird shoppers had quickly rushed to both platforms, including Konga Bulk from Monday morning when the promotion kicked off, with the majority of bargain-hunters comprising a mix of students, most of whom are set to return to school for the resumption of classes as well as other individuals and business owners looking for bulk purchases.
A number of inquiries have also been received by Konga from parents searching for specific items for their children and wards, in addition to concrete interest from schools and other educational institutions eager to close deals on computer systems, laptops, printers, stationery and other accessories.
Konga Last Price Promo Holds On The Last Day of the 9th Anniversary Sales
Shoppers are in for more excitement as Konga, Nigeria’s foremost composite e-Commerce giant, prepares to draw the curtains on its 9th Anniversary sale with a special edition of its monthly online auction tagged – Konga Last Price.
The July edition of Konga Last Price holds on Monday, July 5, 2021.
Held on the first Monday of each month, Konga Last Price is a live auction pioneered by the e-Commerce group and held digitally across the company’s social media platforms, including Instagram, Facebook and YouTube, among others. Interestingly, this edition of the special online auction will coincide with the climax of the 9th Anniversary sale, which kicked off on Friday, June 25 and which comes to an end on Monday, July 5.
To this effect, the management of Konga says it has put together a massive rollout of products for the online auction, with bid prices expected to start from highly discounted ranges.
Furthermore, Konga says it is using the auction, which will mark the end of the highly successful anniversary sale, as a final opportunity for shoppers who missed out on the special deals and offers that marked the promotion to grab some exciting deals. Top on the bill for items expected to go on auction on Monday are genuine products from Konga’s wide-ranging suite including Home & Kitchen, Fast Moving Consumer Goods (FMCG), Computing, Electronics, Fashion, Wine & Spirits and much more.
Also adding to the excitement for this special edition of Konga Last Price is the plan to make it a discount party to mark the end of the company’s anniversary sale.
‘‘The July edition of Konga Last Price is special for a number of reasons,’’ disclosed Kenny Oriola, VP, Konga Online. ‘‘Apart from the fact that it is clashing with the end of the 9th Anniversary sale – which has been a very successful outing for us – it is also the last chance for many shoppers who missed out on the anniversary deals.
‘‘Therefore, we are making it a discount party and an all-comers affair on Monday. The products have been carefully selected and we are offloading huge quantities on the day instead of single units. Those with the fastest fingers and quickest to make payment for the products on offer will benefit. You don’t want to miss it.
‘‘Interested shoppers are also advised to download KongaPay for seamless payments,’’ he enthused.
Continuing, Oriola expressed gratitude to Nigerians for the success of the 9th Anniversary sale, even as he revealed that many more exciting innovations are underway at Konga.
‘‘We are grateful to Nigerians for their patronage and loyalty to the Konga brand. Also, we are determined to keep justifying the faith reposed in our services with the rollout of more exciting innovations, some of which we will be unveiling soon,’’ he concluded.
The July edition of Konga Last Price goes live by 12 pm on Monday, July 5, 2021.
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