Jumia Business Analysis: GMV, Top Markets & eCommerce in AfricaTable of ContentsIntroductionJumia Marketplace: An OverviewGMV Evolution: A Rollercoaster RideTransition to a Third-Party MarketplaceTop Markets: Where Jumia ThrivesProduct Categories: What Sells the Most?Zando: Jumia’s South African VentureRecent Developments and Strategic MovesConclusionFAQ SectionIntroductionImagine a marketplace that connects over 64,000 sellers with millions of customers, providing seamless deliveries across the African continent. This scenario isn't a mere utopia; it's Jumia—a pan-African eCommerce platform that's been referred to as the Amazon of Africa. Over the years, Jumia has seen remarkable highs and challenging lows, carving its niche in the African online retail space. In this blog post, we delve into Jumia’s Gross Merchandise Volume (GMV), its top markets, and how it is evolving amidst both opportunities and challenges. Whether you are an investor, an entrepreneur, or simply someone fascinated by global eCommerce trends, understanding Jumia’s trajectory offers invaluable insights.Jumia Marketplace: An OverviewJumia operates in 11 African countries and uses technology to provide innovative, convenient, and affordable online services. Apart from a marketplace, Jumia also has a comprehensive logistics network and a proprietary payment service known as JumiaPay, which collectively offer an ecosystem that facilitates online trade. This approach enables Jumia to support business growth and reach a wide customer base, hence acting as a catalyst for eCommerce in Africa.GMV Evolution: A Rollercoaster RidePre-Pandemic GrowthJumia’s GMV showed significant growth before the pandemic. In 2017, Jumia's GMV stood at US$547 million. By 2018, this increased by 71% to US$937 million. In 2019, the growth rate slowed but still saw a 26% increase, reaching US$1.18 billion.Pandemic and Post-Pandemic ChallengesHowever, the advent of the COVID-19 pandemic posed considerable challenges. In 2020, Jumia's GMV declined by 21%, dropping to US$932 million. This downward trend persisted into 2021 and 2022, with a contraction of 28% noted last year. The forecast for 2024 also showed a further 7.4% decline in GMV.Gradual RecoveryDespite these setbacks, a recovery is in sight. Jumia is expected to see a modest 3.1% growth next year due to shifts in strategic focus and operational changes.Transition to a Third-Party MarketplaceOriginally a first-party retailer, Jumia began transitioning towards a third-party marketplace strategy in 2016. This evolution has been marked by a decreasing reliance on first-party sales.Declining First-Party ActivityIn 2017, first-party activity accounted for 15% of Jumia’s marketplace GMV. By 2020, this had plummeted to just 6%. However, recent years have seen a revitalization, with first-party activity climbing back to 13% in 2022. Projections suggest this share could reach 16% by 2025.Country-Specific StrategiesJumia customizes its approach on a market-by-market basis, balancing between first-party and marketplace channels to maximize customer value. This dynamic strategy enables Jumia to adjust quickly to market conditions and customer preferences.Top Markets: Where Jumia ThrivesNigeria: The PowerhouseNigeria is Jumia’s largest market, accounting for 40.1% of its GMV. The Nigerian domain, jumia.com.ng, led the marketplace with net sales of US$33.7 million in 2023, dominating the local eCommerce market.Other Key MarketsMorocco follows, contributing 17.9% of GMV, with net sales amounting to US$15 million in 2023. Kenya and Egypt also play pivotal roles, contributing 10.7% and 7.5% of GMV respectively. The Kenyan domain reported net sales of US$9 million, while the Egyptian platform earned US$6.3 million. Lastly, Ivory Coast, with 6.5% of GMV, generated net sales of US$5.4 million. Broader ReachThe remaining 17.3% of Jumia’s GMV is spread across other countries, underscoring its extensive footprint on the African continent.Product Categories: What Sells the Most?Electronics Lead the PackIn 2023, electronics were the most popular products on Jumia, accounting for 28.4% of its GMV. This significant share is reflective of the growing appetite for technology and gadgets in Africa.Other Top CategoriesPersonal care items came in second, contributing 19.1% of GMV. Hobby and leisure products also had a substantial share at 15.2%, followed by fashion items at 14% and furniture and household goods at 9.4%.Zando: Jumia’s South African VentureA Leader in FashionPart of the Jumia Group, Zando stands as one of South Africa's premier online fashion retailers. In 2023, fashion products constituted 75% of Zando’s GMV, making it a dominant player in the sector.Zando GlobalTo counter competitors like Shein and Temu, Zando launched Zando Global, offering South African consumers a wide array of international products. This move is tailored to meet local demands while ensuring reliability through easy return policies and meticulous product checks.PartnershipsMoreover, Zando has formed strategic alliances with companies like Buffalo International Logistics for efficient deliveries and Brick Up Africa CC to diversify its catalog with Lego products, enhancing customer engagement.Recent Developments and Strategic MovesFinancial PerformanceIn the first quarter of 2024, Jumia reported a 5% year-over-year increase in GMV to US$181.5 million and a 19% rise in revenue to US$49 million. Despite facing a loss before income tax of US$39.6 million due to currency devaluations in Nigeria and Egypt, Jumia remains resilient, focusing on strengthening its core business and improving cash efficiency.Discontinuation of Jumia FoodIn a strategic move, Jumia discontinued its food delivery service, Jumia Food, in December 2023. This decision was influenced by intense competition and unsustainable market conditions, pushing Jumia to focus on its more profitable physical goods eCommerce segment.JumiaPay: Revolutionizing TransactionsJumiaPay, Jumia's proprietary payment service, has been a significant growth driver. In Q1 2024, JumiaPay saw a 52% year-over-year rise in transactions, with total processing volume hitting US$45.4 million. The service now accounts for 32.5% of Jumia orders on physical goods, making it a cornerstone of Jumia’s eCommerce ecosystem.ConclusionDespite facing multiple challenges, Jumia continues to build on its strengths and adapt to the ever-changing African eCommerce landscape. From shifting its business model to focusing on core markets and innovative services like JumiaPay, the company exhibits resilience and strategic agility. With a market cap of US$1.41 billion, Jumia stands strong, leveraging technology to connect both urban and rural communities across Africa.As Jumia navigates through economic fluctuations and competitive pressures, its commitment to providing a diverse and accessible online shopping experience remains unwavering. The future outlook suggests that while the road may be bumpy, Jumia’s strategic initiatives position it to capitalize on the growing digital economy in Africa.FAQ SectionWhat is Jumia's Gross Merchandise Volume (GMV)?GMV represents the total value of goods sold through Jumia’s platform. It saw significant growth pre-pandemic, faced declines during the pandemic, and is now on a path to a gradual recovery.Which markets are the largest for Jumia?Nigeria is Jumia's largest market, followed by Morocco, Kenya, Egypt, and Ivory Coast.What are the top-selling products on Jumia?Electronics lead Jumia's sales, followed by personal care products, hobby and leisure items, fashion, and furniture and household goods.Why did Jumia discontinue Jumia Food?Jumia Food was discontinued due to intense competition and challenging market conditions, allowing Jumia to focus on its more profitable eCommerce segment for physical goods.What is JumiaPay?JumiaPay is Jumia's proprietary payment service that facilitates cashless transactions across the platform and has become a significant growth driver for the company.