Jumia Has A Future in JumiaPay

Jumia has done well and the new CEO has executed a solid business playbook, exiting markets and focusing on areas of potential growth.  Within quarters, they have reduced operating loss from about $50 million to $22.1 million per quarter. 

However, by cutting out some units like Jumia Foods, revenue has dropped, from $44m (in Q2 2023) to now $36.5 million. The GMV also dropped, 5% year-over-year to $170.1 million.

But interestingly, Jumia has a great future and that future is in JumiaPay. Yes, Jumia needs to execute the double play strategy where Jumia ecommerce will be used to feed customers to JumiaPay, and if that happens, JumiaPay becomes the core product, while Jumia ecommerce is a supporting component. B2C commerce is challenging in Africa due to lack of postal systems, increasing marginal cost with growth.

JumiaPay has solid numbers, and if that company was the one being reported, the business would have done better at least on the valuation: “JumiaPay Transactions reached 1.9 million, an increase of 31% year-over-year mainly driven by increased penetration of JumiaPay on delivery as well as the implementation of cashback campaigns and incentives conducted in the second quarter of 2024. Ongoing efforts to streamline the user experience and the continued rollout of JumiaPay on delivery to increase cashless orders positions JumiaPay as a strong enabler of the Company’s e-commerce platform.”

In other words, if the focus is JumiaPay and it is open for all ecosystems, the market cap of JumiaPay should be more than about $530 million Jumia is trading today.

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