In a heartfelt strategy presentation to investors, media and analysts, Oliver Samwer, CEO of Rocket Internet said Jumia said is outperforming Konga, its closest rival.
While this is not surprising since it is coming from a competitor, Oliver Samwer gave a key reason why his Jumia is ahead of Konga.
According to him, he believes Jumia is outperforming Konga as a result of ‘continuous operational performance’.
“If you compare Jumia and Konga, do a search on Google, that is why we are outperforming the company,” he said.
The statement is coming at a remarkable date in the life of Konga. The company has just announced that it is switching from a pay on delivery (PoD) to a prepaid only model where customers must pay for all products before they are delivered.
Based on their delivered numbers (revenue, gross margin value and EBITDA), Jumia is much larger than Konga, as per performance operational basis, it is neither here nor there as the two companies might be competing in eCommerce but their business units are more diverse on a like for like basis. While Konga is typically a general merchandise business, it is not in foods and travel side of the business which Jumia has invested greatly in.
In his own analysis, Oliver Samwer claimed that Jumia is now out of the trenches and the company is poised to deliver a better result for the full year 2017. P.S. This does not mean Jumia will deliver its first profit.
Oliver Samwer did state emphatically that as a technology company, Rocket Internet is not likely to pay dividends. This might be unsettling if you are new to this company.
The conference call which lasted for more than three hours featured high-level disclosures about the health of Rocket Internet as an eCommerce technology company as well as its selected portfolio companies including Jumia.
Here are some of the interesting takeouts from the conference call:
- Rocket Internet revealed it increased investment in Jumia
- Jumia had EUR3 million rise in revenue for nine months
- Loss reduction in Jumia rose by 81% year on year
- None of the markets outside Western Europe has been tough for Rocket Internet
- Revenue of Jumia fell to rose to 80.7 million growing by 140.9% year on year growth
- The group now has EUR1.6 billion in net cash
- Oliver Samwer said the core of Rocket is to ‘identify opportunities in the technology space’
- Rocket has now been operating for the past 20 years after it sold Alando to Ebay
- The group has over 100 portfolio companies across Europe, Middle East, South Americas and Africa.
- Oliver said he looks for people with vision, good working relationship, analytical skills