Jumia Technologies Q1 earnings show e-commerce boom in Africa

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Jumia Technologies recently announced its financial results for the first quarter ended March 31, 2022, as the e-commerce company was able to grow investor revenue by 44% year-over-year. Similarly, it recorded a gross merchandise value (GMV) increase by 27% while orders increased by 40% year-over-year respectively.

The African e-commerce company listed on the New York Stock Exchange continued executing its growth acceleration strategy building on the momentum of the second half of 2021, by continuing to scale the business towards profitability.

According to the logistics company, the key levers of its growth acceleration plan remain consistent, as it was able to sustain marketing investments on a multi-channel basis, to drive consumer awareness, adoption and retention.

This resulted in enhanced assortment relevance with a focus on everyday product categories; improved pricing and shipping policy; improved customer experience and convenience through platform enhancements.

Jeremy Hodara and Sacha Poignonnec, the co-chief executive officers of Jumia, disclosed in a statement that the company kicked off the year 2022 with strong growth momentum, closing the first quarter with the highest GMV and Order growth rates of the past nine quarters, up 27% and 40% year-over-year respectively.

“In parallel with accelerating usage growth, we continued driving platform monetization, with revenue growing by 44% year-over-year, which was also a nine-quarter high. We remain focused on taking the business forward on our path to profitability, driving faster usage growth with improved levels of marketing efficiency.

Sales and Advertising expenses per Order and as a percentage of GMV decreased sequentially, both reaching their lowest levels in the past four quarters, at $2.0 per Order and 7.5% of GMV respectively. We are executing on our strategy with discipline and consistency. Our focus continues to be on making Jumia a compelling destination for the everyday needs of African consumers and a growth engine for sellers and businesses in Africa and beyond,” Hodara and Poignonnec stated in the Q1 2022 results.

The Q1 result also revealed Jumia is not slowing down on its marketing drive as the e-commerce company considers brand awareness and consideration as core pillars of its marketing strategy and key to foster customer trust.

Jumia was ranked no.6 in the 2021 Most Influential Brands survey in Egypt released by Ipsos in March 2022. In 2021, Jumia progressed from the 7th to the 6th position of the ranking, maintaining its leadership within the digital and e-commerce category of the survey.

As part of efforts to become the digital destination in Africa for everyday needs, Jumia is expanding its assortment in the everyday categories and further enhancing partnerships with sellers and brands. Between December 31, 2021 and March 31, 2022, the company added about one million stock keeping units (SKUs) in the FMCG category, the highest number of SKU additions in this category in the past eight quarters.

“Price competitiveness is a key component of the Jumia value proposition for consumers, particularly in a more challenging macro environment that drives increased consumer price sensitivity. We are upgrading our price benchmarking tool into an automated system covering the full product assortment of Jumia, incorporating data from both online and offline channel checks,” Jumia stated.

According to the company, the new system leverages machine learning algorithms to match images and product features enhancing the speed and accuracy of screening and matching.

The new algorithm also allows for real-time price adjustment with dedicated modules for margin optimization.

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