There are two options: rise to the mountaintop or fade into the valley. That is how the stock of Jumia will be as it reports quarterly earnings tomorrow in New York. I will be looking for three things: revenue growth, path to profitability and containment of burn rate. If Jumia delivers on those, the alpha moment will come. But if it fails, it would be ugly.
I hope it delivers because Jumia has added a GREAT mission on its double play strategy: open the logistics infrastructure to 3rd party players: “Put together, Jumia’s logistics arm has been exclusively available to vendors on its marketplace—until now. The company is opening up its logistics services to third party users across 11 countries in Africa”. The implication is huge: Jumia wants to carry other ecommerce companies on its back, for profit, of course. Do not take that playbook for granted because if the friction of logistics is eliminated, for some small ecommerce operators, they will scale.
After eight years of iteration, Jumia’s delivery arm now consists of a network of over 300 courier partners and proprietary technology for tracking optimal delivery routes, inventory, and payments. It also includes over 110,000 sq. meters of warehouse space across the continent as well as a vast network of drop-off and pick-up stations that offer the company a wider offline presence. Fifteen months ago, Jumia partnered with Vivo Energy (owner of Engen and Shell-branded petrol stations across Africa) to set up pick-up stations at Vivo’s over 2,000 fuel station outlets.
Put together, Jumia’s logistics arm has been exclusively available to vendors on its marketplace—until now. The company is opening up its logistics services to third party users across 11 countries in Africa.
It’s a move that sees Jumia instantly become one of the biggest players in e-commerce logistics space across the continent. The company is also likely betting on quickly gaining traction by winning potential customers through its years of experience in logistics, from product handling to last mile delivery.
Logistics, adding gaming in JumiaPay, and JumiaPay itself, are components of the puzzle Jumia is working on as it looks for a path to sustained profitability. Tomorrow will determine how far it is on that trajectory.