Technology

Jumia: Gross Merchandise Value Rises by 58% in Q1 2019

Published

5 years ago

May 20, 2019

Jumia: Gross Merchandise Value Rises by 58% in Q1 2019

Jumia, the largest e-commerce in Africa and the first African startup to be listed on the New York Stock Exchange market, has finally released its financial results for the first quarter of the year.

Mrs. Juliet Anammah, the Chief Executive Officer, Jumia, shared the details of the company’s performance in Lagos.

According to her, the company grew its Gross Merchandise Value (GMV) by 58 percent during the first quarter of the year to €240 million.

“Other highlights included marketplace revenue growth of 102 percent to €16m, and gross profits as a percentage of GMV growth of 6.5 percent in Q1 2019 versus the same period in 2018.

“Overall, Jumia’s operating losses for the period widened to €45.4m from €34.3m and negative EBITDA increased to €39.5m from €30.2m”, Anammah said.

Speaking on the allegations levied against the e-commerce giant by Citron Research, she simply stated that “being tagged as a Nigerian Company did not make us a fraud.”

The research company accused Jumia of hiding important information and some cases inflating numbers. The accusation has led to over 51 percent drop in Jumia market value, currently down from $46 a share to $19.91.

It’s market value now stood at 1.53 billion, down from $3.29 billion recorded in April.

“We will not be distracted by those who look to create doubt, to profit at our expense and that of our long-term stakeholders,” Jumia Nigeria CEO stated.

Anammah said the company grew its active users by 1.3 million in a year, between the first quarter of 2018 and first quarter 2019.

“Citron Report is misleading and mischievous because it focused on a month period as against the 12 months stretch. We look at our GMV the same way Alibaba looks at theirs. Gross Merchandise Value is gross prior to cancellation and returns in a twelve month period and that is the way we disclosed this,” she noted.

Sacha Poignonnec and Jeremy Hodara, who are both co-CEOs of the company, said: “Jumia delivered excellent results during the first quarter of 2019: strong GMV growth of 58 per cent leading to 102 per cent growth in marketplace revenue, year-on-year improvement of 356 basis points of Operating loss as a percentage of GMV and further development of JumiaPay, highlighted by the investment by 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.”

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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E-commerce

South Africa, Tunisia Record Job Losses as Jumia Shuts Down Outlets Over Diminishing Returns, Hopes on Nigeria, Others

Published

19 hours ago

October 17, 2024

Ugwoke Ogbodo

Africa-focused e-commerce retailer Jumia Technologies has announced its decision to shut down its South African online fashion retailer Zando and its Tunisian operations by the end of the year.

The development, Investors King gathered, followed diminishing returns in the countries which has been having significant impacts on the firm.

Francis Dufay, the Chief Executive Officer of the retailer giant, expressed strong confidence in Nigeria’s market, saying the firm will refocus on more profitable markets such as Nigeria.

Dufay said Jumia is aiming at more profits, hence, its decision to implement aggressive cost-cutting measures, which include reducing its workforce, exiting the everyday grocery and food delivery sectors, and scaling back delivery services unrelated to its core e-commerce business.

He said the trajectory of the South Africa and Tunisia did not align with the strategy of the group, citing complex macroeconomic conditions, a competitive landscape, and limited medium-term growth potential in these regions.

Stressing that the group’s exit plan is the right decision, Dufay emphasised that the move will allow the company to concentrate its resources on the other nine markets including Nigeria, where growth prospects are more promising.

Jumia’s remaining markets include Egypt, Kenya, Morocco, and Nigeria.

Dufay maintained that success in these regions could help recover volumes lost from the closures in South Africa and Tunisia.

Giving more facts on the level of shortage Jumia incurred in South Africa and Tunisia, he noted that Zando and the Tunisian operations contributed only 2.7% of total orders and 3% of Gross Merchandise Value during the first half of the year.

Zando.co.za, founded in 2012, has established itself as a prominent online fashion platform in South Africa. Meanwhile, Jumia’s Tunisian operations have been running under the Jumia brand for a decade, offering general merchandise.

Dufay confirmed that there are no plans to sell either operation, which will hold clearance sales before their shutdown.

Findings by Investors King revealed that no fewer than 110 persons will lose their jobs in the affected countries once the closures take effect.

Although some employees may be relocated within the company’s other divisions.

This decision comes shortly after South Africa’s largest online retail group, Takealot, announced the sale of its fashion subsidiary, Superbalist, amid rising competition from fast-fashion e-commerce giants like Shein and Temu. Dufay acknowledged that the growth potential in South Africa is increasingly challenging due to the highly competitive environment.

Telecommunications

MTN, Telecom Firms Urge Government Support for Tariff Hike Amid Economic Downturn

Published

21 hours ago

October 17, 2024

Yetunde Olugbenga

MTN Nigeria and other telecommunication companies have requested that the federal government support their plan to increase tariffs to ensure business continuity.

The request was made due to the current economic downturn that has hindered the operations of many companies.

During a panel session at the 30th Nigerian Economic Summit on Tuesday in Abuja, titled Navigating Business Growth in a Volatile Environment, MTN’s Chief Financial Officer (CFO), Modupe Kadri, highlighted that Nigeria’s economy, impacted by foreign exchange fluctuations, has affected the effective functioning of the telecommunications industry, including MTN.

Kadri noted that with the current economic situation, the electricity and fuel sectors have experienced increases.

He therefore said for the telecom sector to remain viable, the federal government must allow similar adjustments in the telecom industry.

According to him, the telecommunications industry is also facing challenges because much of their equipment is heavily import-dependent. Despite this, the sector has not received regulatory approval to adjust its prices for over a decade.

“For ten years now, telecommunication companies haven’t been permitted to increase prices, and this regulation is not providing us with a level playing field to operate. If we are to stay in business, this policy must be reviewed, similar to how electricity and fuel prices are adjusted to reflect current economic realities,” he stated.

“Our business is mainly dependent on foreign exchange, so customers need to understand that for them to receive the services they desire, it costs money,” he added.

He noted that just like the electricity and fuel industries contribute to the nation’s GDP, the telecommunication industry also contributes to the nation’s GDP, and similar measures should be applied across sectors.

“The telecommunications industry contributes 16 percent to the GDP, and it is not something that you can mess around with,” he reiterated.

Kadri therefore sought government intervention to increase tariffs to ensure business continuity.

Technology

EU Raises Tariff on Chinese Electric Vehicles by 35%

Published

2 weeks ago

October 4, 2024

Samed Olukoya

In an effort to slow down Chinese infiltration of the European market with more affordable options, the European Union has hiked tariffs on electric vehicles from China by 35% to 45% from the usual 10%.

According to people familiar with the situation, ten member states voted in support of the new tariff while Germany and four others voted against it. The remaining 12 states reportedly abstained.

Last month, the former European Central Bank President Mario Draghi warned that Chinese state-sponsored competition was a threat to the European Union and could leave the region vulnerable to coercion.

The bloc had claimed that China unfairly subsidized its industry to have an edge over EU businesses, a claim Beijing denies and has threatened retaliatory action on European dairy, brandy, pork and automobile sectors.

However, given the size of trade between the bloc and China, €739 billion or $815 billion in last year, it’s believed the two parties will continue negotiations to find an alternative to the tariffs.