Jumia, the Nigerian eCommerce giant, released its financial report for the first quarter of 2022 on Tuesday, May 17, 2022.
Orders, revenue, and gross merchandise value (GMV) increased significantly compared to the previous nine quarters, according to co-CEOs Jeremy Hodara and Sacha Poignonnec. Orders increased from 6.6 million to 9.3 million in Q1 2021, GMV increased from $198.9 million to $252.7 million, and revenue increased from $33 million to $47.6 million.
Despite this expansion, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) loss was $53 million. Poignonnec told TechCrunch on a conference call that the company intends to keep its EBITDA loss under $70 million in Q1 2021.
JumiaPay, the company’s fintech product, has obtained a payment service solution provider (PSSP) license, allowing it to process payments for third-party businesses in Nigeria. This advancement pits it directly against Paystack, Flutterwave, eTranzact, and Remita. It also provides an additional revenue stream when the company desperately needs to increase revenue.
PSSPs typically make money by charging a transaction fee for each transaction they facilitate, and these fees frequently vary depending on the value of the transaction. According to the report, JumiaPay was used to complete 34% of orders placed on Jumia, and with its license, JumiaPay’s numbers could significantly increase in the coming quarters.
Perhaps the most intriguing aspect of the developments detailed in the report is Jumia’s decision to enter the healthcare market. The company is testing a service that will allow users to access doctors for $1 per month through a partnership with Consultative Group to Assist the Poor.
In isolation, this is a fantastic move that could allow Jumia to leverage its existing customer base and infrastructure. It is also a more formidable rival for existing healthcare startups.
The World Health Organization (WHO) recommends one doctor for every 600 people, but Nigeria has one doctor for every 5,000 people. Furthermore, the Nigerian Medical Association reports that only 35,000 of the 72,000 registered doctors in Nigeria are practicing, despite the healthtech industry’s growth.
Although little information was provided about the move, its foray into an area that is notoriously difficult in Africa and has nothing to do with its core business raises some concerns.
CribMD, iWello, and WellaHealth are examples of existing telehealth startups in the country. As private companies, their records are often not public, but iWello reported 140 clients in a 2021 interview with Techpoint Africa, and CribMD reportedly served 2,800 patients as of 2021. The CEO of WellaHealth also revealed that the company reached 10,000 unique users in 2017, with thousands more on the waitlist.
These companies have received far less funding than Jumia, with Africa’s healthcare sector raising $392 million in 2021. However, these businesses must contend with low Internet penetration, declining household incomes, and other challenges.
Furthermore, Jumia has no prior experience operating in the healthcare sector and would most likely need to go through a learning curve in order for this venture to succeed. Even if they hire experienced professionals, things are unlikely to go their way right away.
Another challenge that existing players face is the fragmented nature of the healthcare space. There are only a few hospitals that have digitized records, and even fewer that share this information. As a result, healthtech startups must develop solutions for this purpose.
