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African E-commerce Firm Jumia Takes Lockdown Revenue Hit

A Jumia scooterman tries to speak to clients to be delivered with product at the Ikeja warehouse of the company in lagos on June 12, 2013. JUMIA is a Nigerian based online retail company, where customers purchase their electronics, books, phones, DVDs and other choice products and have them shipped directly to their homes or offices with several payment options to choose from. JUMIA, the fourth largest Nigerian website, which recently turned one years old have hit over half a million customers in the country. Jumia is funded by Rocket Internet, a Germany based Internet incubators globally responsible for starting market leading e-commerce companies. AFPPHOTO/PIUS UTOMI EKPEI (Photo credit should read PIUS UTOMI EKPEI/AFP/Getty Images)

Revenues for African e-commerce heavyweight Jumia slid by 10% in the second quarter, dashing hopes that lockdowns aimed at stemming the spread of the new coronavirus would lead to a flood of online orders.

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The company also said it would pay $5 million to settle class-action lawsuits alleging misstatements and omissions related to its initial public offering.

Shares in the struggling firm were 27% lower by 1350 GMT at $11.82 per share, driven in part by a 13% decline in gross merchandise value (GMV) — a closely watched figure that tallies the total amount of goods sold over the period.

Revenue for the quarter fell to 34.9 million euros ($41.1 million). The company said while there were surges in demand in markets that went into total lockdown, this only happened in four countries, which hold 24% of its adjustable market.

Softer restrictions elsewhere led to “less drastic changes in consumer behaviour”, Jumia co-founder Sacha Poignonnec said on an earnings call, while the surge in some markets was offset by lost revenue due to logistical problems and closed borders.

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Written by PH

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