Nigeria: Jumia’s profit expands by 4% to $26.8M; JumiaPay Transactions up by 12%

E-commerce giant, Jumia has declared its financial results for the second quarter ended June 30, 2021. 

Jumia saw its gross profit increased by 4% to $26.8 million in the second quarter of 2021 from $25.6 million in the second quarter of 2020, ahead of marketplace revenue growth as a result of reduced marketplace cost of sales.

According to the report made available, Jumia’s sales and Advertising expense  rose by 115% to $17.1 million in the second quarter of 2021 from $7.9 million in the same period last year, as marketing investments increased across channels to accelerate usage growth. This expense was in line with the Sales and Advertising expense in the second quarter of 2019, which reached $16.7 million.

JumiaPay Transactions shot up by 12% from 2.4 million in the second quarter of 2020 to 2.7 million in the second quarter of 2021, the fastest Transactions growth rate of the past 4 quarters.

JumiaPay Transactions growth was supported by accelerating volume growth in the business, in the food delivery category in particular. Overall, 35.4% of Orders placed on the Jumia platform in the second quarter of 2021 were completed using JumiaPay, compared to 35.6% in the second quarter of 2020.

Technology and Content expense rose up by 8% to $8.4 million in the second quarter of 2021 from $7.8 million in the same period last year, as we increased our technology investments to support the growth of its e-commerce and payment activities.

General & Administrative expenses excluding SBC, reached $26.6 million in the second quarter of 2021, down 15% on a year-over-year basis. This trend was mostly attributable to a decrease in provisions, particularly as the second quarter of 2020 included $5mm of provision for class action settlement.

Co-Chief Executive Officers of Jumia, Jeremy Hodara and Sacha Poignonnec, said“We are executing on our acceleration strategy to drive usage growth on our platform and are encouraged to see early signs of success in our business, including posting our fastest growth rate in Orders in the past five quarters.

“Over the past 18 months, we have significantly diversified our product category mix, improved our unit economics and strengthened our balance sheet. To build on this momentum and drive the long-term growth of our business, we increased investments this quarter in Sales and Advertising and Technology while continuing to expand our Gross profit after Fulfillment expense.” They added

“While we start to see early signs of usage acceleration, these investments are long term in nature and we expect them to pay out over time, as we continue to execute our strategy. Our current focus is on accelerating both e-commerce and fintech adoption, by engaging consumers and sellers into the variety of our services and making our platform even more compelling and relevant as part of their everyday lives.” They concluded