Online store Jumia has released its earnings report for the fourth quarter of 2020. The revenue for the fourth quarter of 2020 was €41 million which surpasses the figures of €33.7 million for third quarter. The online store however, suffered operational losses of €40 million. In the third quarter of 2020, figures for operational losses stood at €28.3 million. Although there was an increase in revenue in the fourth quarter compared to the third, it is not quite impressive when juxtaposed with the figures for operation losses from the third to fourth quarter which is almost double.
With all the losses the online store has suffered in 2020, there is still some great news and a little hope that 2021 would be a better year. The online store saw an increase in its Gross Merchandise Value (GMV). Gross Merchandise value is the value of all the goods sold within a period of time and is an important measurement for online stores and e-commerce firms like Jumia.
Let’s examine the figures for Gross Merchandise Value (GMV). In the fourth quarter of 2020, GMV went up to €231.1 million from €187 million in the third quarter of the same year. Comparing these figures with figures from the same period in 2019, while there was an increase from quarter to quarter, there was a reduction in GMV that was as high as 21 percent. The e-commerce company went from selling items with high value in 2019 to selling more of household goods and groceries in 2020. The company says that while there is a change in the business mix which obviously has a big effect on GMV, there is still much to be celebrated when the overall figures are considered.
2020 was a life-changing year. While many companies; especially online stores and companies that were already digitalized took advantage of the pandemic and recorded huge successes, others failed due to the pandemic. One of such companies that was expected to ‘shine’ during this period was Jumia and although the company saw a revenue increase of about 17.8%, what do we say about the figures for operational losses that run into millions of Euros?