Jumia Technologies AG, a Nigerian-based online shopping platform with a presence in several countries in Africa, including Kenya, has posted a 49% reduction in operating losses to $ 33 Million.
Gross profit reached US$ 27.3 Million, an increase of 22%, while Sales & Advertising expense was US$ 7.3Million, the lowest quarterly amount in three years.
According to Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia, the platform is making significant progress on its path to profitability with Adjusted EBITDA loss in the third quarter of 2020 decreasing by 50% year-over-year.
Considered one of Africa’s leading e-commerce platforms, Jumia said that disruptive effects of the COVID-19 pandemic continued playing out during Q3, 2020, but with lesser supply and logistics disruption than was seen in the first half of 2020.
Jumia said the pandemic created economic challenges that negatively impacted consumer sentiment in countries where it operates.
While there were limited options to nationwide lockdowns across its footprint, Jumia said the pandemic did not alter consumer behavior or encourage uptake of e-commerce at a pan-African level.
The supply and logistics disruption that the platform encountered in selected countries, especially in food delivery, largely subsided in the third quarter.
But Jumia warns that the virus’s development remains a fluid situation and expects the pandemic to drive continued macro and operating environment uncertainty.
Its food delivery business recovered in Q3, 2020, after being severely hit by COVID-19 related restaurant shutdowns during Q2, 2020 period.
In its outlook, Jumia said the ongoing COVID-19 pandemic and the ensuing economic challenges have resulted in substantial uncertainty concerning its operating environment and financial perspective.
This situation has been further exacerbated by social protests, as experienced in Nigeria throughout October as part of the End SARS campaign.
Considered a prime destination of choice for brands in Africa, Jumia onboarded over 60 brands on the platform during Q3, 2020.
As part of its plan to reach out to more consumers, Jumia is currently piloting a pre-paid physical and virtual card in Egypt, in partnership with Mastercard and ADIB, a leading bank in the Middle East & North Africa region.
During Q3, the platform also launched the pilot of Jumia Games on its JumiaPay app across some five countries in partnership with Mondia- a leading marketing and digital content distribution firm.
Jumia Games- a subscription-based service offering unlimited access to over 500 games, including in-app purchases, aims to provide consumers with a varied range of digital services and engaging experiences while creating more payment use cases for JumiaPay.
JumiaPay was live in 8 markets- Nigeria, Egypt, Morocco, Ivory Coast, Ghana, Kenya, Tunisia, and Uganda at the end of Q3, 2020.
Jumia marketplace is present in 11 countries in Africa, the platform where a large diverse group of sellers offer smartphones, consumer electronics, fashion and apparel, home and living, consumer packaged goods, beauty and perfumes etc, to consumers. Other services include restaurant food delivery, hotel and flight booking, classified advertising, airtime recharge and “instant delivery”.