Jumia Technologies eyes free shipping, logistics service to boost income

Workers are seen inside an Africa-focused tech startup Jumia Technologies, pickup station in downtown central business district in Nairobi, Kenya November 16, 2021. REUTERS/Monicah Mwangi/File Photo

NAIROBI, Feb 23 (Reuters) – African e-commerce firm Jumia Technologies will offer more free shipping of goods to its customers in selected locations to boost usage this year, it said on Wednesday.

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

Its adjusted loss before interest, tax, depreciation and amortisation (EBITDA) widened to $196.7 million last year from $136.3 million in the prior year.

That could widen further to $200-220 million 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 8.0 million last year, a near 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 soft 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 chief executive of 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 by stocking 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 like Nigerian Bottling Co, Jumia’s management said.

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

Reporting by Duncan Miriri
Editing by Mark Potter

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