Jumia records 102% revenue in Q1, gets €50 million investment from Mastercard
For the first quarter ending March 31, 2019, electronic commerce platform, Jumia has a recorded a Gross Merchandise Volume (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.
The eCommerce firm also announced that Mastercard is investing about €50 million, in a partnership initiative into the business.
co-CEOs of Jumia, Sacha Poignonnec and Jeremy Hodara, commented: “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.”
The firm explained that the €50 million investment by Mastercard into Jumia, in a concurrent private placement with the Initial Public Offering, marked another milestone in the development of JumiaPay and a validation of its potential.
Jumia said it is partnering with Mastercard on a number of initiatives, including the development and marketing of co-branded products (i.e., cards, virtual cards and quick response codes).
According to the firm, in the first quarter of 2019, “our marketplace continued to gain depth and diversity as we focused on attracting quality sellers to our platform and providing our consumers with an expanding range of products and services. An example of this strategy is the partnership we announced this quarter with the technology leader Xiaomi. As part of this partnership, we are opening the Mi official store on our platform with the ability to offer a number of Xiaomi products on an exclusive basis.
“This demonstrates the attractiveness of Jumia as a destination of choice for high profile international brands, giving them access to millions of potential consumers in Africa with one partnership.”
Jumia explained that its strong GMV growth combined with the attractive value proposition it offers both sellers and consumers are a key engine of monetisation, “which we derive from diversified revenue streams such as commissions, fulfillment, Value Added Services, marketing and mdvertising services.
According to the firm gross rofit margin as a percentage of GMV increased from 5.6 per cent in the first quarter of 2018 to 6.5 per cent Q1, as a result of the increased GMV monetisaation rate.
“Our Gross Profit also exceeded Fulfillment expense this quarter. We continue to have a strong focus on cost efficiency. Leveraging our strong brand awareness and highly localized marketing approach, we have been able to gain 205bps of marketing efficiency this quarter, bringing the Sales & Advertising expense from 7.2 per cent of GMV in the first quarter of 2018 to 5.1 per cent in the first quarter of 2019.
“Adjusted EBITDA loss as a percentage of GMV improved from negative 19.8 per cent in the first quarter of 2018 to negative 16.4 per cent in the first quarter of 2019,” the firm stated.