African e-commerce giant Jumia cuts costs, hopes for lockdown boost

By Libby George
LAGOS, May 13 (Reuters) - Struggling e-commerce platform
Jumia Technologies reported an almost 7 percent fall in first
quarter revenue due to supply chain disruptions, particularly in
China, but saw lower cash burn and signs that lockdowns were
hastening a shift towards online shopping in Africa.
Jumia 4JMAy.DE JMIA.N was the first Africa-focused tech
start-up to go public on the New York Stock Exchange and reached
a market capitalisation of over $1.5 billion just days after it
listed last April.
But the company has struggled to find its way, and its share
price has tumbled some 90% from its peak a year ago. On
Wednesday, its shares traded down around 24% from the previous
close, at $3.98 at 1159 EST.
The results, which caught the beginning of the coronavirus
outbreak on the African continent, showed the lowest losses in
earnings before interest, taxes, depreciation and amortization
in six quarters, at 35.6 million euros.
But revenue fell to 29.3 million euros. China is a a key
supplier of electronics and mobile phones sold on the platform.
Still, during an earnings call on Wednesday, founders Sacha
Poignonnec and Jeremy Hodara said they saw opportunities amid
the pandemic.
"We are seeing unprecedented demand to join the Jumia
platform, especially for named brands," Poignonnec said. "We
believe those dynamics will help accelerate the shift towards
online."
The company has recently unveiled deals with major brands
including Unilever ULVR.L , Procter & Gamble PG.N , Reckitt
Benckiser RB.L , Nestle NESN.S , Carrefour CARR.PA in
Algeria and grocery provider Twiga in Kenya.
The company is hoping virus containment measures as
lockdowns ease will increase the allure of its business model,
bypassing crowded shops and offering cashless payment.
Though it presented data showing a drop in items sold amid
lockdowns in key markets including Nigeria and South Africa in
March and into April, the company said figures in both markets
had begun rebounding by the end of April.
In South Africa, a strict lockdown barred delivery of
fashion items for several weeks, while in Nigeria, measures made
it impossible for some vendors to access their inventory.
Revenue in Morocco and Tunisia increased by contrast, and
sales were slightly higher on a group level by mid-April.
The figures also showed 28% orders growth, 77% year-on-year
growth in transactions using its JumiaPay payment platform and
gross profit per order climbing to 40 cents, up from breakeven a
year ago.