Month: May 2020

Jumia is the probably most famous Africa startup in the past few years and went IPO last year.

I wrote about the potential e-commerce giant in a few blogs before.

• Jumia And Africa E-commerce (1)
• Jumia And Africa E-commerce (2): GMV And Consumers’ Online Spending
• Jumia And Africa E-commerce (3): JumiaPay
• Jumia And Africa E-commerce (4): Citron, Net Merchandize Value
• Jumia And Africa E-commerce (5): Delivery In Africa, Jumia Prime

On May 13, Jumia reported its 2020 Q1 earnings, which also provides a glimpse into African cities under coronavirus.

The market didn’t react positively after the earnings, but some opportunistic expectations had been built in before.

Although some numbers are not ideal and growth seems lackluster, I would argue in the next blog that Jumia has become a very different company than two years ago.

This post summarizes things that appear to be positive for Jumia, from its Q1 earnings and the shareholder letter in April, among other communications:

• Partnership with Reckitt Benckiser, a global health products manufacturer selling through Jumia,  is financing free shipping nationwide (8 markets that Jumia operates) on all listed products; Jumia takes 0% commission. -> free marketing / user acquisition that ensures a good first online shopping experience; keep logistics team operate
• Focusing on contactless delivery options & online payments. -> accelerating JumiaPay adoption when cash is still considered important; building trust, also encouraged by governments
• Providing affordable basic foods and sanitary essentials. -> shaping perception on online shopping to everyday purchases
• In South Africa, it launched Jumia platform with an assortment of essential products (Reckitt Benckiser and P&G) that can be delivered despite the lockdown (was selling fashions via Zando which is shut down).
• Jumia Food pivots to grocery delivery
• Increased demand from sellers to join the Jumia platform as offline distribution channels are largely disrupted – high-profile brands on Jumia Mall, including Coca-Cola and Nigerian Breweries in Nigeria, PepsiCo and Nivea (Beiersdorf) in Egypt.
• Launched JumiaPay in Tunisia
• Consumers can purchase game subscriptions or credit for in-app purchases on the JumiaPay app for popular games
• Advertising services were available across 9 out of 11 countries, compared with 5 at the end of 2019 – in Q1 run campaigns for high-profile brands including Adidas, L’Oreal, Microsoft, Sensodyne and Mondelez
• Volumes surged in some markets, such as Morocco and Tunisia, while limited in countries such as South Africa and Nigeria
• The countries that have been the most severely affected by confinement measures have experienced a gradual volume recovery since mid-April, while the countries that saw a surge in volumes continued to experience robust momentum throughout April. Overall, in terms of items sold, we ended the month of April c.3% above the first week of March levels.
• The United Nations Development Programme (UNDP) in partnership with Jumia Uganda, have launched an online platform – to enable small and medium enterprises to connect with consumers
  • Jumia will use its infrastructure which includes riders trained to provide safe and contactless deliveries, to provide a platform for the vendors to reach customers who are currently under lockdown.
  • Consumers will have the option of giving feedback on the level of satisfaction of both the product and the service through the Jumia Vendor App.
• Jumia and Mastercard announced a partnership to incentivize the use of cashless payments platforms – consumers who purchase essential products using their Mastercard on the Jumia platform will receive up to a 10 per cent discount on their order

Things that are implying negative developments:

• The early signs of the COVID-19 disruption were felt in our cross-border operations as a result of manufacturing facility shutdowns in China. Supply chain disruption in China also impacted our local sellers, many of whom source their goods from China.
• Different forms of confinement measures have been affecting operations to varying degrees, food delivery business, brief closures of warehouse, sellers’ inability to deliver, etc.
• Currently expect continued GMV weakness over at least the first half of 2020, with better Order and Annual Active Consumers growth, on a year-over-year basis.

to be continued…