Jumia, Rocket Internet’s eCommerce group in Nigeria and Africa has just released its 2016 half year consolidated result showing the company recorded EUR35.4 million loss within the period.
When compared to its net loss recorded in last year, the company has managed to reduce its loss by 19%. In the first half of 2015, the company recorded EUR43.7 million loss.
Also on the topline, Jumia’s revenue also fell by 56%. With the first half of this year, net revenue was EUR33.0 million compared to last year when it recorded EUR75.8 million f0r the first half of 2015.
Another metric that shows the company is facing tougher times it is EBITDA margin when compared on a year-on-year basis. For the first half of 2015, the Jumia’s margin fell by 57.6% compared to 107.5% for the first half of this year.
Three months ago, Rocket Internet had scrapped its Africa Internet Group holding company for all its eCommerce verticals in Africa, restructuring everything into Jumia.
**[quote=“wontiboje, post:1, topic:8544, full:true”]
Jumia, Rocket Internet’s eCommerce group in Nigeria and Africa has just released its 2016 half year consolidated result showing the company recorded EUR35.4 million loss within the period.
When compared to its net loss recorded in last year, the company has managed to reduce its loss by 19%. In the first half of 2015, the company recorded EUR43.7 million loss.
Also on the topline, Jumia’s revenue also fell by 56%. With the first half of this year, net revenue was EUR33.0 million compared to last year when it recorded EUR75.8 million f0r the first half of 2015.
Another metric that shows the company is facing tougher times it is EBITDA margin when compared on a year-on-year basis. For the first half of 2015, the Jumia’s margin fell by 57.6% compared to 107.5% for the first half of this year.
Three months ago, Rocket Internet had scrapped its Africa Internet Group holding company for all its eCommerce verticals in Africa, restructuring everything into Jumia.
Amazon is designed to take advantage of tax laws and accounting loopholes.
They invest to grow their assets. Cash flow is a better metric to track that GAAP Net income.
$ 6 billion in operating cash flow. Yikes!
Amazon has essentially been profitable from an operating standpoint since 2001
Oh my, if any other business lost that much money, it would be a major scandal, but since it’s an e-commerce platform, we’re somehow supposed to turn a blind eye? It’s 35.4 million euros in half a year! That’s insane, and considering their revenue has also dropped by 56%, so the ‘investing in growth’ excuse doesn’t hold water here. This is a zombie business, just meandering till it dies off one day. We really need better poster child businesses in tech. We can’t be having incompetent money burning companies getting all the tech hype
The challenge for some of the major eCommerce startups is that they over-estimated the Nigerian market. Retail is still majorly offline even among the core target audience. You see multitudes of people trooping into shopping malls daily to buy just about anything.
Perhaps Jumia and Konga can take a second look at their business model. eCommerce is less than 1% of total daily retail sales. The change in their business model from inventory to merchant (marketplace) model might not turn the tide positively.
Competition does not drive innovation. Competition drives competitors into the ground.
This is an industry that both did not invent and both do not have a defensible edge over the other. Economically, this is a nightmare. They should merge.
“Valuable companies create value”
It is that value that becomes the engine for further innovation in the quest for remaining valuable. Competition erodes possible value by attrition.
Bad: Revenue loss( Marketing and Ops Team need to go back to the drawing board).
Again Jumia and co should have an offline presence( Use Targets model) and open Major Malls like Shoprite has done, i mean if you read their annual and half year reports then you see their Revenue has been very high here, for Amazon to open physical bookshops it still shows you cant ignore the offline market. Jumia and Co should first see themselves as a one stop shopping solution before seeing themselves as online, Operations and Marketing geared towards that…helping you shop fast, cheap n seamsless, till then…
I don’t think Konga or Jumia needs to set up a physical store. That would multiply demand on capacity for no immediate or certain gain.
In reality if in the last 2 yrs not one buyer had complained of the disparity btw what s/he saw online and what was delivered, or even when they did they were fully covered by a robust refund policy, then Nigeria’s ecommerce would have justified POD and can move to euthanize it.
Disincentivize POD by offering expedited delivery for prepaid orders by several days as against POD eta. When people have no more cause to be worried about the quality of what they ordered and what they will be delivered, why would they want to agonize with optional delayed delivery? POD will die a natural death and ecommerce 2.0 would have been born.
If they have to invest in any physical infrastructure, it’d rather be fulfilment centers to expedite delivery time and reduce overall logistical inefficiencies to make sure they are right on delivery every time. The latter too is a cause for major concern when buying online.
**[quote=“wontiboje, post:1, topic:8544, full:true”]
