Loss-making Jumia Technologies to offer more free shipping

Nairobi  — African e-commerce firm Jumia Technologies will offer more free shipping of goods to its customers in selected locations to boost usage in 2022, it said on Wednesday.

Jumia, which became the first Africa-focused tech start-up on the New York Stock Exchange when it listed there in 2019, offers an online marketplace for vendors and food sellers, as well as associated services.

Its adjusted loss before interest, tax, depreciation and amortisation (ebitda) widened to $196.7m in 2021 from $136.3m in the prior year.

That could widen further to $200m-$220m  this year, the company said in its earnings report, as it focuses on ramping up growth. It has not said when it expects to make a profit.

Annual active consumers increased to 8-million last year,  nearly a  17% jump from the previous period, the company said, while total orders increased by just over a fifth.

Consumers were ordering more everyday products from the platform, Jumia said, helping it to make progress in its aim of increasing consumer orders of household products like cool drinks and soap, from a previous focus on electronics.

The share of fast-moving consumer goods in total merchandise sales during the period rose to 14% from 9% in the previous period, Jeremy Hodara, a co-founder and CEO Jumia, told an investor briefing.

“We are handling more consumers than ever before,” he said.

The firm will increase free shipping of goods to consumers and stock more merchant products in its warehouses so they are readily available, he said.

It will also seek new clients for its logistics business, which already serves firms such as Nigerian Bottling Company, Jumia’s management said.

Investments into its logistics service will rise to $15m-$25m in 2022, up from $7m  capital expenditure last year, the management said.

Reuters