Jumia Business Analysis: GMV, Top Markets & eCommerce in AfricaTable of ContentsIntroductionThe Evolution of Jumia MarketplaceJumia's Largest MarketsProduct Categories: What's Selling on Jumia?Jumia's South African Extension: ZandoRecent Developments: Financial Health and Strategic ShiftsClosing ThoughtsFAQ SectionIntroductionAfrica's eCommerce market has been on a rapid upward trajectory, led by pioneers such as Jumia. Often referred to as the Amazon of Africa, Jumia has carved out a significant presence across the continent. However, Jumia's journey has been far from smooth. Overcoming various challenges, including fluctuating economies and intense competition, the company has continually adapted its strategies. This blog post aims to provide an in-depth analysis of Jumia's market performance, GMV (Gross Merchandise Volume) trends, and strategic shifts that are shaping its future.By the end of this post, you'll have a comprehensive understanding of Jumia's largest markets, top-selling products, and recent developments. We'll also examine the company's move towards a marketplace model and its implications, spotlighting Jumia's resilience and adaptability in the ever-changing eCommerce landscape of Africa.The Evolution of Jumia MarketplaceJumia, a pan-African eCommerce platform, operates in 11 African countries. Founded in Berlin, the company's mission is to leverage technology to offer innovative, convenient, and affordable online services across Africa. Jumia facilitates business growth by providing sellers with a platform to reach a broad customer base efficiently.Pre-Pandemic Growth and Post-Pandemic ChallengesJumia's journey began with impressive growth in GMV. In 2017, the company reported a GMV of $547 million, an impressive 71% increase that brought the total to $937 million by 2018. However, this upward trajectory faced a major hiccup post-pandemic. While Jumia managed a modest 26% growth rate in 2019, its GMV declined by 21% in 2020 to $932 million. The subsequent years saw minimal growth, with a significant 28% contraction last year.Shift to a Third-Party Marketplace ModelOriginally a first-party retailer, Jumia pivoted to a third-party marketplace strategy in 2016. This shift allowed Jumia to balance between first-party and marketplace channels, adapting to individual market dynamics. In 2017, first-party activities comprised 15% of Jumia's GMV, but this share dwindled to 6% by 2020 due to the pandemic. However, as conditions improved, first-party activities began to recover, standing at 13% last year. Projections indicate this could reach 16% by 2025.Jumia's Largest MarketsJumia's footprint in Africa is extensive, with Nigeria being its most significant market. Here's a breakdown based on 2023 GMV:Nigeria: Dominates with 40.1% of GMV.Morocco: Contributes 17.9%.Kenya: Accounts for 10.7%.Egypt: Holds 7.5% of GMV.Ivory Coast: Adds 6.5%.Other Countries: The remaining 17.3% of GMV is distributed across other markets, reflecting Jumia's widespread reach.Revenue Performance in Top MarketsNigeria: Jumia’s Nigerian domain (jumia.com.ng) generated US$33.7 million in net sales in 2023, making it the top online store.Morocco: Second with US$15 million in net sales.Kenya: Produced US$9 million.Egypt: Generated US$6.3 million.Ivory Coast: Contributed US$5.4 million in net sales.Product Categories: What's Selling on Jumia?In 2023, electronics was the standout category on Jumia, making up 28.4% of the marketplace's GMV. Other top-performing categories included:Personal Care: Representing 19.1% of GMV.Hobby and Leisure: Holding a 15.2% share.Fashion: Accounting for 14% of GMV.Furniture and Household Goods: Contributing 9.4% to the GMV.Jumia's South African Extension: ZandoZando, a part of the Jumia Group, is a leading online retailer in South Africa, with a focus primarily on fashion. Celebrating its 12th anniversary, Zando continues to expand its market reach, bridging urban and rural divides.Zando’s Strategic MovesRecently, Zando launched Zando Global to compete with fast-fashion giants like Shein and Temu. This new platform ensures South African consumers have access to international products with local reliability, including easy returns and rigorous quality checks. Collaborating with Buffalo International Logistics, Zando enables efficient delivery services. Additionally, the partnership with Brick Up Africa CC to offer Lego products is a testament to Zando's commitment to variety and quality.Recent Developments: Financial Health and Strategic ShiftsFinancial PerformanceJumia's financials in the first quarter of 2024 painted a mixed picture. The company saw a 5% year-over-year increase in GMV to $181.5 million and a 19% rise in revenue to $48.9 million. Nevertheless, a loss before income tax of $39.6 million underscored challenges, notably due to currency devaluations in key markets like Nigeria and Egypt, and elevated finance costs.Discontinuation of Jumia FoodIn December 2023, Jumia decided to discontinue its food delivery service, Jumia Food, across seven countries. This move was driven by intense competition and unsustainable market conditions. While Jumia Food once accounted for 11% of the company’s GMV, its exit marks a strategic shift towards focusing on profitable segments within physical goods eCommerce.JumiaPay: Enabling Cashless TransactionsJumiaPay, the company’s proprietary payment service, has been a significant growth driver. In Q1 2024, JumiaPay saw transactions increase by 52% year-over-year, with a total processing volume of $45.4 million. The service now facilitates 32.5% of Jumia orders on physical goods, up from 20% previously. This growth is pivotal in enhancing cashless transactions across Jumia's key markets.Closing ThoughtsDespite the challenging economic environment, Jumia has demonstrated robust resilience and strategic dexterity. Valued at $1.41 billion, the company is streamlining operations and focusing on profitable segments. Navigating through currency fluctuations and competitive pressures, Jumia continues to leverage technology to connect diversified markets across Africa, ensuring both urban and rural communities benefit from its services.As Jumia advances, its ability to adapt and strategize will likely keep it as a formidable player in Africa's eCommerce scene.FAQ SectionQ: What are the main products sold on Jumia?A: The top-selling products on Jumia in 2023 include electronics, personal care items, hobby and leisure products, fashion, and furniture and household goods.Q: Why did Jumia discontinue Jumia Food?A: Jumia discontinued its food delivery service due to intense competition and unsustainable market conditions. The decision was part of a broader strategy to focus on more profitable physical goods segments.Q: How has Jumia's GMV evolved over the years?A: Jumia's GMV grew significantly pre-pandemic, saw a decline during the pandemic, and is gradually recovering. In 2023, a further decline was noted, but projected growth is anticipated for the coming years.Q: What is JumiaPay and its significance?A: JumiaPay is Jumia’s proprietary payment service, crucial for facilitating cashless transactions. As of Q1 2024, it accounted for 32.5% of Jumia orders on physical goods and continues to grow its transaction volumes.Q: Which are Jumia's largest markets in Africa?A: Jumia's largest markets include Nigeria, Morocco, Kenya, Egypt, and Ivory Coast, with Nigeria contributing the largest share to the company’s GMV.