Pan-African e-commerce company Jumia has released its first-quarter (Q1) 2022 financial performance.
In the report, the company highlighted consistent growth but had lapses in some areas compared with Jumia’s previous quarter. Like with every other report by the business, the first page of the Q1 2022 report highlights its year-over-year wins.
How did the business fare?
The company’s orders increased by 40% year-over-year. Also, gross merchandise value (GMV) increased by 27% year-over-year. Also, revenue increased by 44% year-over-year.
Compared to the first quarter of 2021, the business recorded double-digit growth in orders, GMV and revenue. Orders grew by 40% year-over-year from 6.6 million to 9.3 million. GMV itself jumped by 27% year-over-year from $198.9 million to $252.7 million. And Jumia’s revenue reached $47.6 million, a 44% rise from Q1 2021’s revenue of $33 million.
In a statement accompanying the report, co-CEOs Jeremy Hodara and Sacha Poignonnec said the e-commerce giant saw its highest GMV, order and revenue growth rates of the past nine quarters in Q1 2022.
But these numbers fell well below how the e-commerce giant ended 2021, with the last quarter recording GMV sales of $330 million, $62 million in revenue and 11.3 million orders made.
With the report influencing business, shares rose by some 16% in early trading after the report went live. That’s despite the company’s sequential-quarter decline in growth, as Jumia’s growth in Q1 2022 — in GMV, orders and revenue — comfortably outclassed what it recorded last year.
In the report, fast-moving consumer goods or FMCG and food deliveries show the fastest growth among its quarterly active customer base of 3.1 million. It’s up 28% year-over-year.
FMCG was Jumia’s second-largest category for items sold during Q1 2022. However, it was the fastest growing category, posting 180% year-over-year expansion. The company said this growth was supported by the momentum of “the grocery sub-category which we are currently developing.”
Food delivery, a core part of the company’s offerings, improved 86% year-over-year, while phones and electronics grew 19% year-over-year despite “continued global supply chain volatility for these categories.”
The business also recorded growth with its fintech arm, JumiaPay. The total payment value (TPV) of JumiaPay, grew by 36.7% to $70.7 million in the first quarter, primarily supported by solid growth in GMV. Total transactions on JumiaPay reached 3.2 million in Q1 2022, indicating a 32% year-over-year increase.
Most of these transactions were from the food delivery category, with JumiaPay completing 34% of the orders on the platform throughout the quarter.
In April, JumiaPay was granted a Payment Service Solution Provider (“PSSP”) license by Nigeria’s apex bank, the Central Bank of Nigeria, to process payments for third-party businesses. The license offers a long-term and compounding growth avenue for JumiaPay.
The company’s logistics business has faired well too. Last quarter, Q4 2021, the e-commerce platform shipped 3.3 million packages for 996 partners, up from 2.9 million packages for 766 clients the previous quarter. In Q1 2022, the pan-African e-commerce giant reached new highs, shipping over 3.5 million packages for 1,250 clients.
Jumia’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) loss was $53 million in Q1 2022, a 70% year-over-year increase. But it’s a sequential-quarter drop from the $70 million recorded in Q4 2021.
The e-commerce company traded at $5.53 per share before its earnings call, a significant drop from the $25 range it traded in on the bourse this time last year. Mounting losses with profitability far in the future, blended with continued share sell-offs of tech companies from Q4 2021 up until now, has contributed to its depressed valuation compared to historical levels.
Jumia hopes to take the business forward on the path to “profitability, driving faster usage growth with improved levels of marketing efficiency”.
However, this is dependent on how well the e-commerce giant meets the everyday needs of African consumers and sustains a growth engine for sellers and businesses on the continent.
What this means
A 40% increase in Jumia’s orders in the first quarter of 2022 suggests that more people are still keeping their faith with shopping from the comfort of their homes and offices. This is despite a return to normal physical activities.
With the company’s revenue growing 44% year-over-year during the quarter, a steady increase in orders will keep the numbers growing.
However, as purchasing power decreases, more people may be forced to find cheaper alternatives.
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