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FASTER SHIPPING

More than half of Jumia’s deliveries are now made within 24 hours

A man drives a motorcycle carrying a box branded with Jumia Food behind him
Reuters/Jean Bizimana
Quick delivery is good for business
  • Alexander Onukwue
By Alexander Onukwue

West Africa correspondent

Published

In its latest earnings call this week, African ecommerce company Jumia reported revenue of $47.6 million in the first three months of 2022, 44% more than in the same period last year. The company said it had 3.1 million active customers and fulfilled 9.3 million orders, each figure being at least 29% higher than the same period last year.

Growth in these metrics can be linked to Jumia’s continued expansion into selling what it calls “everyday” products in fashion, food delivery, fast-moving consumer goods, and the increased adoption of JumiaPay, its payments processing service.

This category of products made up just over half of Jumia’s gross merchandise volume in 2020 but now comprises more than two-thirds. The company added 1 million unique items in the FMCG subcategory in the first quarter.

That helped Jumia sell nearly three times more FMCG items between January and March this year than 12 months ago, with food delivery being the second fastest growing category also in terms of number of items sold.

Improving delivery is work in progress

Jumia said 57% of the packages it shipped in the last quarter reached consumers within 24 hours of order placement. The company’s report (pdf) did not state what the percentages in previous quarters were. CEO Sacha Poignonnec did not clarify in an interview with Quartz, but said the mark has been “growing.”

He attributes the increased pace of shipping to better organization at warehouses in picking and packing items, and coordinating with logistics providers and delivery riders. Trucks from the company’s Lagos warehouse would transfer inventory to less served communities outside the city three times a week. Those trucks now go every night, Poignonnec said.

Delivering orders faster outside major African cities increases Jumia’s pool of future revenue. But the company is not extending all its perks everywhere at the moment. Free shipping is still largely reserved for customers in major cities, and for orders above a certain threshold.

Jumia is set to compete in fintech

As reported before, Jumia is diversifying from being just a marketplace for selling items to also become a logistics and advertising provider. It delivered 3.5 million packages for other companies last quarter, compared to 800,000 a year earlier.

Another diversification drive begins, with JumiaPay now licensed in Egypt, and Nigeria by the central banks in each case.

JumiaPay has been used on Jumia’s checkout pages and as a consumer app for bill payments, but the plan has always been to extend it to third parties. The company will now pitch it to other marketplaces as a payment option, in addition to what already exists in the market. Why should anyone care?

“We believe consumers will want to use JumiaPay because they have used it before and trust it. If you have problems, you can count on Jumia to solve it,” Poignonnec said.

When it rolls out, JumiaPay will store the user’s data to enable what Poignonnec describes as “one-click payment” as a way of relieving the user from not having to re-enter their payment details after the first time. Anticipating data privacy concerns, the CEO said Jumia would comply with data regulations and will communicate what information it collects to users.

Jumia’s first quarter loss is more than $50 million, increasing over 60% year-on-year. It is a key metric for observers seeking clues for the viability of e-commerce in Africa 10 years after Jumia launched. That said, the public market seemed to receive Jumia’s first quarter report well, with the share price increasing from $5.53 to $7.24 at the close of business on May 17.

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