Jumia Spent More Than $51 Million To Market Its eCommerce Services

Jumia published its fiscal year-over-year report that revealed the fluctuating growth based on the period business period since 18 months ago.  Jumia’s Q2 2020 report revealed the eCommerce Giant spent more than $51.6 million on sales and advertising, despite the change of business schemes.

Several months ago, the African-based eCommerce Giant revamped its business schemes to be more effective while accounting for profits. Jumia focused on minimal marketing expenditure that helped the eCommerce Giant survive accounting for the excessive loss up to date.

In the space of six business quarters, Jumia neither accounted for excess loss nor a surge in profit — the eCommerce giant focused on both low-value and high-value products that bolstered an increment on its YoY gross profit margins. Although that wasn’t enough whereby the expected growth fluctuated.

For contrast, Jumia’s eCommerce business has attracted over 1.3 million active users on a YoY basis at the time. After the change in business schemes, Jumia then recorded 500,000 extra active users — including users to place orders that ended up being cancelled in 2020.

Jumia’s current business productivity has attracted experts consent that questions the effectiveness of Jumia’s supposed business schemes that are expected to influence the entire African eCommerce industry, per the Co-Chief Executives of Jumia.

Both Jeremy Hodara and Sacha Poignonnec represent the eCommerce company as chief executives — Jumia’s change of business schemes intended to encourage several buyers and sellers to swerve with its diversified product categories while adding figures to its balance sheet.

Jumia embarked on a marketing campaign targeting users on social media with geotargeted ads via Facebook and Google. The eCommerce Giant sought for more patrons aggressively to increase its number of active users that sprung up to 6.9 million active users in the Q1 of 2021 — a 12.8% extra from last year’s business rankings.

In the first quarter of 2021, the eCommerce giant process less than a million orders due to the iterative decline in purchasing gadgets and electronics. Still, “food delivery posted the highest ever the number of quarterly orders, up almost 60% year-over-year and accounting for 22% of total orders on our platform during the quarter.”

The Q2 of 2020 appears to be lucrative than the Q1 of 2021 — the Gross Merchandise Volume, GMV, of 2021 ended with $223.5 million while the current quarter is valued at $200 million. Meanwhile, the foreign exchange also influenced Jumia’s GMV against the American dollar.

On the other hand, the eCommerce fintech platform dubbed JumiaPay also recorded a significant increase from $24 million to 27 million dollars in this current Q2. Apparently, Jumia experience a healthy gross profit after accounting for series of expenditures including, picking, packing, shipping, and advertisements cost — Jumia recorded $7.5 gross profit.

“At the end of June 30, 2021, we had $637.7 million of cash on our balance sheet. Cash used in operating and investing activities was $27.4 million.” Despite all the accumulated figures, Jumia recorded a $51.6 million loss in the Q2 of 2021, when taxes, interest, and other expenditures are accounted for.

During the first quarter of 2021, the eCommerce giant reportedly sold a portion of its shares to generate revenue to administer Jumia’s business. Although the implications for selling their shares were not revealed. Still, the eCommerce company is expected to encounter a slight decline in revenue which was fulfilled.