Jumia Technologies partners with Premium Card for flexible payments

CAIRO - Jumia Technologies AG (NYSE:JMIA), a prominent e-commerce platform in Egypt, has announced a strategic partnership with Premium International for Financial Services, known as "Premium Card." This collaboration aims to enhance the online shopping experience by offering exclusive discounts and flexible installment plans to customers through JumiaPay.

The partnership, unveiled today, allows Premium Card holders to access special offers and substantial discounts on a broad range of products on Jumia. Additionally, it introduces installment plans with competitive interest rates, giving customers more payment options.

Francis Dufay, CEO of Jumia, expressed enthusiasm about the partnership, stating that it "represents a significant opportunity to expand our service offerings." He emphasized the goal of making the online shopping experience easier and more convenient, which is expected to further e-commerce adoption in Egypt. Dufay believes this cooperation will bolster Jumia's market position and enhance the overall customer experience.

Jumia's platform serves as a marketplace connecting over 64,000 sellers with consumers and includes a comprehensive logistics network to facilitate package delivery. JumiaPay, the company's proprietary payment service, is an integral part of the platform, enabling secure transactions.

The alliance with Premium Card is poised to provide added value to Jumia's customers, offering them the flexibility to choose their preferred payment method for purchases across various categories. This move is also anticipated to attract new customers by providing more accessible financial solutions for online shopping.

This strategic partnership is based on a press release statement issued by Jumia Technologies AG.

In other recent news, Jumia Technologies AG reported mixed results for Q3 2024. Despite a slight uptick in active customers, the company faced a 13% year-over-year revenue decline, reporting $36.4 million. Jumia's strategic realignment involves expanding its delivery network, streamlining operations, and exiting markets such as South Africa and Tunisia. The company raised $94.7 million through an at-the-market offering, improving liquidity to $164.6 million. However, operating loss stood at $20.1 million, with an adjusted EBITDA loss of $17 million. Jumia anticipates a volume boost from its annual Black Friday sale. These are significant recent developments for the e-commerce giant as it navigates through a period of strategic adjustments.

InvestingPro Insights

Jumia Technologies AG's strategic partnership with Premium Card aligns well with the company's focus on enhancing its e-commerce platform and expanding its customer base. According to InvestingPro data, Jumia's revenue for the last twelve months as of Q3 2023 stood at $181.2 million, with a revenue growth of 3.61%. This modest growth could potentially be accelerated by the new partnership, which aims to make online shopping more accessible and attractive to Egyptian consumers.

InvestingPro Tips highlight that Jumia "holds more cash than debt on its balance sheet" and has "impressive gross profit margins." Indeed, the company's gross profit margin for the last twelve months as of Q3 2023 was a robust 62.2%, indicating strong pricing power and efficient cost management in its core operations. These financial strengths could provide Jumia with the flexibility to invest in and support initiatives like the Premium Card partnership.

However, it's worth noting that Jumia is "not profitable over the last twelve months," according to another InvestingPro Tip. The company's operating income for the same period was -$53.14 million, suggesting that while the gross margins are strong, there are still challenges in achieving overall profitability. This partnership could be seen as a strategic move to boost sales and potentially improve the bottom line.

For investors interested in a deeper analysis, InvestingPro offers 12 additional tips for Jumia, providing a more comprehensive view of the company's financial health and market position.

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