E-commerce company losses 35 million Euro in first half of 2016

folarin okunola

September 24, 2016 10:38 AM

Despite the over $300 million it has raised so far this year, Jumia still recorded a 56% drop in revenue.

Jumia rebrands

Jumia has just released its half year consolidated results for 2016 and the highlight of the report is the 35.4 million Euro loss the company recorded in that period.

This is a mixed bag for Jumia especially when considering its loss recorded over the same period last year. In the first half of 2015, Jumia recorded a 43.7 million Euro loss, a figure 19% higher than this year's figures.

While it may look like Jumia is making some sort of progress with cutting down its losses, the story is not so good in terms of revenue. Despite the over $300 million it has raised so far this year, Jumia still recorded a 56% drop in revenue for the first half of 2016.

Compared to the first half of 2015 when it generated 75.8 million Euros in revenue, the company could only manage 33 million Euros for the first half of 2016.

ALSO READ: German tech company lost $690 million in the first half of 2016, blames its fashion arm

About three months ago, Africa Internet Group (AIG) restructured, merging the brand name of all its verticals under the Jumia brand name and also changing its own name from AIG to the Jumia Group.

In more woeful news, the company will also have to figure out how to slow down its burn rate which currently stands at 50% despite the restructuring helping it boost its customer base by as much as 92.2% this year.

As for why the Jumia restructure was important to it, Rocket Internet, Jumia's main backers says it wanted a single brand with significant operating advantages, and leverage its existing customer base across all its verticals.

Rocket Internet is still having a hard time convincing its investors of the sustainability and profitability of the many businesses under its umbrella, after it posted a loss of 617 million Euros.

In Rocket's own words, “as a result of deconsolidation effects group revenues in the first half of 2016 decreased to EUR29 million compared to EUR 71 million in first half of 2015.”

folarin okunola

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