Jumia Business Analysis: GMV, Top Markets & eCommerce in AfricaTable of ContentsIntroductionJumia Marketplace: An OverviewLargest Markets for JumiaTop-Selling Products on JumiaJumia's Third-Party Marketplace StrategyZando: Jumia’s Extension in South AfricaFinancial Performance and Strategic FocusConclusionFAQIntroductionImagine an online marketplace that connects over 64,000 sellers with millions of customers across a continent as diverse and vast as Africa. This is Jumia, often referred to as the Amazon of Africa. Despite facing numerous challenges, Jumia has carved out a significant presence in the African eCommerce landscape. This blog post will analyze Jumia's business model, its largest markets, top-selling products, and recent developments to provide a comprehensive understanding of its journey and future prospects.By the end of this post, you'll have a clearer picture of how Jumia is navigating the complexities of the African market and what the future holds for this pioneering eCommerce platform.Jumia Marketplace: An OverviewJumia is a pan-African eCommerce platform that operates in 11 African countries, including Nigeria, Morocco, Kenya, Egypt, and Ivory Coast. Headquartered in Berlin, Jumia leverages technology to offer innovative, convenient, and affordable online services. Its comprehensive platform connects sellers with buyers, facilitates efficient logistics, and offers a proprietary payment service, JumiaPay, which is essential for transactions across its markets.Evolution of Jumia's GMVJumia's Gross Merchandise Volume (GMV) experienced significant growth before the COVID-19 pandemic but faced a downturn afterward. Here’s a snapshot of its GMV trajectory:2017: US$547 million2018: US$937 million (71% growth)2019: Minimal growth to US$1.18 billion2020: Decline to US$932 million (-21%)2021-2022: Fluctuating growth with a 28% contraction last year2024 Forecast: A 7.4% decline with a potential 3.1% growth in subsequent yearsThe pandemic severely impacted Jumia’s GMV, but a gradual recovery is anticipated as the company shifts focus towards a third-party marketplace strategy.Largest Markets for JumiaJumia’s largest market is Nigeria, contributing 40% of its GMV in 2023. Here's the breakdown of its top markets:Nigeria: 40.1% of GMVMorocco: 17.9% of GMVKenya: 10.7% of GMVEgypt: 7.5% of GMVIvory Coast: 6.5% of GMVThe remaining 17.3% of GMV is spread across other African countries, showcasing Jumia's extensive reach.Top-Selling Products on JumiaIn 2023, electronics were the top-selling products on Jumia, accounting for 28.4% of the platform's GMV. Other major categories included:Personal care products: 19.1% of GMVHobby and leisure items: 15.2% of GMVFashion: 14% of GMVFurniture and household goods: 9.4% of GMVThis diverse product mix highlights Jumia's ability to cater to various consumer needs across different markets.Jumia's Third-Party Marketplace StrategyOriginally, Jumia operated primarily as a first-party retailer, meaning it sold products directly to consumers. However, in 2016, it began transitioning to a third-party marketplace platform. This shift allowed Jumia to balance between first-party and marketplace channels, adapting to the unique demands of each market:2017: First-party activity was 15% of GMV2020: Declined to 6% of GMV2023: Increased to 13% of GMV2025 Forecast: Expected to rise to 16% of GMVThis dynamic approach has enabled Jumia to scale its operations while creating value for customers and optimizing its category mix.Zando: Jumia’s Extension in South AfricaZando, part of the Jumia Group, is a leading online retailer in South Africa. Celebrating its 12th anniversary, Zando primarily focuses on fashion, which formed 75% of its GMV in 2023. Recently, Zando launched Zando Global, allowing South African consumers to access international products with local reliability, including easy returns and product checks.Collaborations with companies like Buffalo International Logistics ensure seamless deliveries, further enhancing Zando's value proposition.Financial Performance and Strategic FocusDespite various challenges, Jumia reported mixed financial results in the first quarter of 2024:GMV: Increased by 5% to US$181 millionRevenue: Rose by 19% to US$49 millionHowever, the company faced a loss before income tax of US$39.6 million, mainly due to currency devaluations in Nigeria and Egypt, coupled with higher finance costs.Jumia Food: A Discontinued EffortIn December 2023, Jumia discontinued its food delivery service, Jumia Food, across seven African countries. The decision was driven by intense competition and challenging market conditions. Although popular, Jumia Food was unsustainable due to deep-pocketed rivals and irrational market economics.JumiaPay: Driving Cashless TransactionsJumiaPay, Jumia’s proprietary payment service, has become a significant growth driver:Q1 2024: 52% increase in transactions, totaling US$45.4 millionOrder Share: Accounts for 32.5% of Jumia orders on physical goodsExpanding JumiaPay in key markets like Nigeria and Kenya has facilitated cashless transactions, further embedding Jumia into the eCommerce ecosystem.ConclusionJumia’s journey in the African eCommerce market has been a blend of significant achievements and notable challenges. Despite economic headwinds and competitive pressures, Jumia remains resilient, driven by strategic agility and a robust technological framework.Jumia's commitment to connecting urban and rural communities through a diverse and accessible online marketplace positions it for sustained growth. As it continues to leverage technology and enhance its service offerings, Jumia is well-poised to maintain its status as a leading eCommerce platform in Africa.FAQWhat is Jumia’s largest market?Nigeria is Jumia’s largest market, contributing 40.1% of its GMV in 2023.What are the top-selling products on Jumia?In 2023, electronics were the top-selling products, followed by personal care, hobby and leisure, fashion, and furniture and household goods.Why did Jumia discontinue its food delivery service?Jumia discontinued Jumia Food due to intense competition and challenging market conditions, making the service unsustainable.What is JumiaPay?JumiaPay is Jumia’s proprietary payment service, facilitating cashless transactions and driving growth in its eCommerce operations.How has Jumia’s GMV evolved over the years?Jumia’s GMV grew significantly before the pandemic but faced a downturn afterward. A gradual recovery is expected as the company focuses on a third-party marketplace strategy.