Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's Results Conference Call for the Second Quarter of 2020. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Please note the conference is being recorded.

[Operator Instructions] I would now like to turn the conference over to Safae Damir, Head of Investor Relations for Jumia. Please go ahead..

Thank you. Good morning, everyone. Thank you for joining us today for our second quarter 2020 earnings call. With us today, are Sacha Poignonnec and Jeremy Hodara Co-Founders and Co-CEOs of Jumia; as well as Antoine Maillet-Mezeray, CFO. This call is also being webcast on the IR section of our corporate website. We will start by covering the Safe Harbor.

We would like to remind you that our discussions today will include forward-looking statements. Actual results may differ materially from those indicated in the forward-looking statements. Moreover, these forward-looking statements may speak only to our expectations as of today. We undertake no obligation to publicly update or revise these statements.

For a discussion of some of the risk factors that could cause actual results to differ from the forward-looking statements expressed today, please see the Risk Factors section of our recent 20-F filing. In addition, on this call, we will refer to certain financial measures, not reported in accordance with IFRS.

You can find reconciliations of these non-IFRS financial measures to the corresponding IFRS financial measures in our earnings press release, which is available on our Investor Relations website. With that, I'll hand over to Sacha..

Thank you very much. Welcome everyone and thanks for joining the call. I hope that you are all staying safe and well. We are pleased to share with you today results that I think demonstrate meaningful progress on path to profitability.

And before diving into the detail, we would like to acknowledge the hard work and dedication of all our employees, all our logistic partners, all our sellers, restaurants, JForce agents who have been collaborating together in order to keep certain consumers in this very unique and turbulent time.

And we are very thankful and we thank them all for this. Our mission of providing consumers with access to goods and service, helping sellers and SMEs reach consumers and grow, while making a positive impact on the African continent as never been more relevant.

We explained during our Q1 results all the actions that we've been taking to adapt our operating model of course including social distancing, contactless delivery, work from home and many others, as well as all the actions that we've been taking in order to support the community.

For example, introducing price control mechanism on essential goods, supporting the delivery associates throughout the Jumia Heroes Program and many others. It goes without saying that we will continue to carry on with all those initiatives, as long as the situation remains, and we're very happy to take questions on all this at the end of the call.

Now let's talk about the results. And I am now on Page 3 of the presentation. We will start today with the bottom line since it's been a big part of our focus lately, and also something that we all wanted to see. I think in Q2, we made great progress on our path to profitability.

We had set for ourselves a strong objective to deliver a clear trend in reducing our loss in absolute terms. In Q1, we achieved the 10% reduction year-over-year of the adjusted EBITDA. In Q2, adjusted EBITDA was EUR 33 million, a loss of EUR 33 million; this is the best level in absolute terms of the past six quarters.

You may also have noticed in our press release that we have successfully entered into an agreement concerning the settlement of all ongoing class actions, which is also good news. And without the one-off expense related to this the adjusted EBITDA loss would have been EUR 29 million, meaning a 34% reduction year-over-year.

What we are very happy about is that this improvement is driven by strong fundamentals, and those fundamentals are growth of the usage of Jumia orders and consumers, improved unit economics, strong discipline on cost both on marketing and G&A. One very good way to see this is through the evolution of our unique economics, which you can see on Page 4.

Our strategy to increase the focus on what we call the everyday categories, gradually monetize the marketplace, while driving cost savings is really yielding very good results. We are now generating almost EUR 1 per order of gross profit after fulfillment. And, in fact, we are almost breakeven after sales and advertising.

With the business mix rebalancing that we initiated last year, we are shifting more business towards categories like beauty, fashion or fast-moving consumer goods, which have higher commission rates and are less promotionally intensive than categories like phones and electronics.

In parallel, our monetization keeps improving as we rollout new revenue streams. Our fulfillment efficiency keeps improving as we continuously rollout new projects, new technology features as we increase the volumes as well; and you can see this dynamics playing in the average order value, which is now EUR 34.

And in the gross profit after fulfillment which like I said is now EUR 0.9 per order in Q2, If you continue going down the marketing efficiency has never been as good.

During the quarter, on the one hand we have been very cautious in our investments given the level of uncertainty, as well as some of the disruptions in the operations that we faced in Nigeria, South Africa food delivery and we had mentioned those in Q1.

But most importantly, we are able to meaningfully reduce our sales and advertising expense today because we have spent eight years building one of the strongest brands in Africa. A good example of that is Jumia was featured in the Top 10 of the 100 most admired brands in Africa in May according to the ranking of Brand Africa.

And that is just one example and something which makes us very confident for the future. Finally, our Tech and G&A keeps improving too, thanks to our cost discipline, but also all the restructuring actions that we had initiated last year, and are now starting to pay off.

So overall, very pleased with the evolution of the unit economics and the adjusted EBITDA trajectory.

And what makes us very confident about the future is that those improvements are not caused by a sudden surge or a spike in volume during the quarter; instead they are really driven by improving the underlying drivers of the P&L, and that I think is very important to note.

If we turn to Page 5, we thought it was very important to comment on the measures taken by the governments so far as part of the COVID response in order to understand the behavior of consumers in particular towards e-commerce.

So far what we've seen in is that in most countries of our footprint, they did not implement broad nationwide lockdowns like the ones we have seen in most western countries. In fact, only four countries impose nationwide lockdowns, and these countries represent about 24% of our addressable market.

Everywhere else confinement measures consisted in either localized lockdowns or partial movement restrictions like curfews during evening hours. This is very important consideration to keep in mind because localized lockdowns, partial curfews led to less drastic changes in consumer lifestyles and behavior.

In other words, in those countries, we have not seen a surge in demand. In terms of supply disruptions, certain parts of our business as you know from our Q1 release was strongly impacted mostly Nigeria, South Africa food delivery as well as the cross-border marketplace.

We've been gradually returning to a relatively normal course of business over the course of the quarter.

So once again as you read the Q2 results you have to keep this in mind, and appreciate that our progress on the path to profitability in particular our record gross profit after fulfillment is driven by strong fundamentals rather than the surging volumes, and it's taking place also despite some significant disruptions in some countries.

Where we continue to see positive impact is with the sellers and big brands in particular, and how they look at e-commerce.

If you please turn to Page 6, we have seen both small sellers and large brands turn to e-commerce as a important route to market; on the brand side in particular, we have been deepening our partnerships with many brands and many brands are now putting in place dedicated commercial and marketing strategies for e-commerce in Africa.

We've had very strong engagement from those as part of our Jumia anniversary and more than 100 brands across many sectors joined us for the event.

We're very encouraged of course by this momentum because more sellers means more choice means better prices for the consumers, and it of course validates Jumia as the platform of choice to reach consumers online in Africa. With this let me now hand over the calls to Jeremy who will give you more details on the Q2 performance..

Thank you, Sacha. Hello, everyone. We're now on the Page 7 please. So our focus during the second quarter of 2020 was very much on the financial discipline, and on making progress on our path to profitability. The Usage on the platform was resilient with annual active consumers reaching 6.8 million, and orders up 8% on a year-over-year basis.

While we reduced our sales and advertising expense by more than 50% in parallel on a year-over-year basis. The JumiaPay TPV more than doubled growing by 106% year-over-year, while JumiaPay transactions increased by 36%.

We also made meaningful progress on the monetization front with our gross profits increasing by 38% year-over-year and the gross profit after the fulfillment expense reaching a record EUR million. On the cost efficiency front, we reduced our adjusted EBITDA loss by 26% year-over-year.

Excluding the net settlement expense, we would have reduced our adjusted EBITDA loss by 34%. And we also reduced our operating loss by 44% over the same period showing the meaningful progress on our path to profitability. So overall, we are seeing very good progress across the four pillars of our strategy.

And we are now going to look at the dynamics of the usage on Page 9. So Page 9, what we can see is the fundamental strength of the Jumia brand and the demand it drives made it possible for us to maintain usage with record levels of marketing efficiency. With 51% lower sales and advertising expense, the GMV was lower by 13% compared to Q2, 2019.

Here, I'd like to point out that the effects of the business mix rebalancing initiated at the end of 2019 continue to play out during Q2, 2020 affecting the GMV trajectories.

To support, our path profitability and the long-term usage on our platform, we have deliberately reduced the emphasis on lower consumer lifetime value business, while driving the growth of the everyday product categories.

These categories typically yield lower basket size on the purchase of high ticket items like mobile phone or electronic device, and this proved to be a very good move even given the focus of consumers on those categories as a result of the COVID situation.

Turning to the Annual Active Consumers, we increased annual active consumer by 40% on a year-over-year basis reaching 6.8 million of consumers at the end of Q2, 2020, while reducing the annual savings and advertising expense per annual active consumer by 38%.

The orders increased by 8% year-over-year, while we spent EUR 1.1 of sales and advertising per order, which is 55% less than in Q2, 2019. Throughout the second quarter of 2020, we have been continuously adjusting our sales and advertising expense as we experienced resilient demand in Phase 3 of the reducing marketing expense.

I will also point out that we faced meaningful disruptions in Nigeria, South Africa and in our food delivery business, which was also effected by restaurant shut down for part of Q2, 2020; all three businesses gradually went back to normal levels through Q2, but did not contribute of course to their normal shares overall.

Turning to Page 10, in the early days of Jumia, the mobile phone and the electronics used to be the main e-commerce entry point for consumers, and these categories and products are typically highly priced entities and purchase that drive consumer to do extensive product research and price benchmark, which naturally takes them online.

As we increase the breadth of product category and the assortment on our platform, we’re able to serve consumers across the broader spectrum of their needs. This is evident like the evolution of our category mix, with phone and electronics decreasing from 59% of our GMV in Q2, 2019 to 43% in Q2, 2020.

This is a natural evolution of consumer behavior that we have supported and accelerated to a certain extent as we were able to extract better unit economics out of these categories.

While everyday products tend to be lower average value items leading to 20% reduction in the average order value on a year-over-year basis, we also tend to be more profitable. The gross profit after fulfillment expense per order reached EUR 0.9 compared to a EUR 0.1 less in Q2, 2019.

And as Sacha mentioned earlier, we are also very close to breakeven on a per order basis after fulfillment in sales and advertising expense. These rebalancing which was in the making for few years further increased our relevance in light of the COVID 2019 situation.

Over the past few months, demand was particularly strong across essential and everyday product categories. Our fastest growing category with triple digit growth rates in both GMV and volume terms were the beauty and personal care category supported by the sale of hygiene products.

FMCG also experienced strong momentum as consumer turned to Jumia for the purchase of essential products. We are pleased to see that Jumia is today a household name with strong relevance as part of the everyday life of consumers in Africa. To conclude on the usage dynamics, we’re driving usage at record levels of marketing efficiency.

Thanks to the strength of the Jumia brand, as well as the relevance of our offering. Our aim is to anticipate and meet the evolving needs of our consumers in a way that makes economic sense for us. That's what led to the increased focus on everyday products, which are driving a meaningful step up in our unit economics.

Let's now move to another key focus area for us which are JumiaPay, page 12. We are very pleased with the continuous adoption and the momentum of JumiaPay on our platform.

The TPV accelerated by 106% from EUR 26 million in Q2 2019 to an all-time high of EUR 53.6 million in Q2, 2020, surpassing the record set during the fourth quarter of 2019 of EUR 45.6 million.

On platform penetration of JumiaPay as a percentage of GMV increased to 23.5% in the second quarter of 2020, 2.4x the level of penetration in the second quarter 2019 of 9.9%. On page 13, JumiaPay transactions increased by 36% from EUR 1.8 million in Q2, 2019 to EUR 2.4 million in Q2, 2020.

We’re pleased to see people starting to use JumiaPay beyond micro-transactions, such as air time and utility bill payments and more and more prepayments taking place on our physical goods and Jumia Food on demand platforms.

Transactions of an average value above EUR 10, including pre-paid purchases on the Jumia Physical Good marketplace and Jumia Food platform are enjoying triple digit growth of transactions. Overall, 35.6% of orders placed on Jumia in Q2, 2020 were paid for using JumiaPay compared to 28.3% in Q2, 2019.

With that, I will now hand over to Antoine, who will walk you through our financial performance update starting on Page 15..

Thank you, Jeremy. Hello, everyone. We are pleased with the progress on monetization in Q2, 2020 as this is an essential component of our financial strategy and path to profitability. In the context of an 8% year-over- year growth in orders, both marketplace revenue and gross profit posted 38% growth over the same period.

As we grow the usage of Jumia, we seek to gradually monetize this usage through diversified revenue streams that we saw a growing share of our cost base. Taking a closer look at our marketplace revenue streams on Slide 16.

Commissions increased by 68% year-over-year despite a decrease in GMV as a result of an increased proportion in the mix of higher commission rate categories such as beauty, FMCG et cetera.

Marketing and advertising continues to experience robust momentum posting 50% growth as advertisers ship an increasing share of their spend from offline to online favoring direct response formats. Fulfillment which comprises delivery fees charged to consumers increased by 34% on a year-over-year basis for outpacing orders growth.

This was totally attributable to the continuous accumulation of our shipping metrics that allows for more efficient pass-through of our fulfillment expense to both consumers and sellers. Value-added services posted 6% year-over-year growth largely in line with orders growth.

In Q2, 2020 value-added services was negatively impacted by the decline in cross-border volumes, driven by cargo description, which led to lower international logistics revenue receipts from overseas centers.

Moving on to cost efficiencies page 18, one of the key highlight of the quarter was the gross profit after fulfillment expense reaching record level of EUR 6 million compared to a loss of EUR 0.7 million in Q2, 2019, demonstrating continued progress on our path to profitability.

The growth in gross profit alongside the reduction in the absolute amount of fulfillment expense drove this performance. Fulfillment expense decreased by 2% in Q2, 2020 on a year-over-year basis; while orders increased by 8% over the same period.

And number of operational improvements drove fulfillment expense efficiencies including a change in the volume pricing model from a cost per successfully delivered package to a cost per successfully stop.

Our third-party logistics partners are now paid for a successful stop at customer address regardless of the number of packages included in the delivery.

If we are able to generate such efficiencies today, it is partly because we have spent nine years building an asset-light and scalable logistics platform that allows us to constantly adjust and improve our pricing models as we gain scale.

Another contributing factor the fulfillment expense reduction in Q2, 2020 was the change in our mix of packages with reduced proportion of cross-border packages and packages shipped outside primary cities. Moving onto sales and advertising expense, I’m now on Slide 19.

Sales and advertising expense decreased by 51% from EUR 14.9 million in Q2, 2019 to EUR 7.2 million in Q2, 2020, its lowest level in more than three years. We are driving record levels of marketing efficiency across all relevant metrics. Sales and advertising expense per order decreased by 55% from EUR 2.4 in Q2, 2019 to EUR 1.1 in Q2, 2020.

Annual sales and advertising expense per annual active consumer reduced by 38% from EUR 10.8 per annual active consumer to EUR 6.7. And sales and advertising as a percentage of GMV decreased by 249 basis points from 5.7% to 3.2%. These efficiencies are made possible by the strength of our brand and resilience of demand on on-platform.

We also continue to make enhancements to our performance marketing strategy across search and social media channels, notably through more granular segmentation of our target market with differentiated campaigns and content for each segment. Finally, our third major cost area is technology and G&A. I’m now on Slide 20.

Our technology and content expense increased by 5% compared to Q2, 2019 as we continue to invest in our tech infrastructure.

G&A expense excluding share based compensation and the settlement expenses on the class actions settlement reached EUR 24 million, down 2% both on a year-over-year basis compared to Q2, 2019 and on a sequential basis compared to Q1, 2020.

The decrease was mostly attributable to the cost rationalization initiatives undertaken starting from the end of 2019. Moving on to Page 21 on balance sheet. Our path to profitability is further supported by our asset-light business model.

CapEx in Q2, 2020 was less than EUR 0.5 million as we operate Jumia Logistics as a platform with very limited CapEx requirements. Net change in working capital resulted in an inflow of EUR 13 million. We consider a positive working capital effect of this scale to be one-off in nature.

While we are meaningfully improve working capital management over the years, with unusually large working capital inflow was supported by a longer payable cycle and reduce suppliers’ prepayments. As a result cash utilization reached EUR 16.8 million taking all cash position at the end of June 30, 2020 to EUR 174 million.

Assuming a neutral working capital effect, cash utilization from the quarter would have been around EUR 13 million, which is still a very good performance, if we compare it to the quarterly cash utilization of the past 18 months. It is a saving of more than EUR 10 million.

The EUR 3.6 million net settlement expense for the class actions will likely be disbursed early Q4, 2020. You may have noticed that we made a shelf-filing on July 22nd, which went effective on July 30th allowing us to issue up to 18 million ADS over the course of the next three years.

This is a matter of good corporate housekeeping to allow us to take advantage of opportunities in the market to raise capital in the future. With that, I hand the call back over to Sacha..

GMV, active consumers and orders. Over time, we want to see all metrics going up even if in some quarter’s one metric or the other is going down or growth is higher or lower but over time we want to see those going up. On JumiaPay, our main priority today is to gradually increase penetration within our platform.

You've seen that JumiaPay transactions accounted for 36% of orders in H1, almost 10 points more than H1 last year. We still see of course cash on delivery as a key part of our value proposition going forward, but we aim to try the on-platform penetration gradually.

And we also want in the months to come to start expanding our payments and fintech solutions of platform. On the path to prosperity, we will continue to focus on gradual increase monetization, as well as cost efficiency.

I think the key term here is gradual, when you -- our marketplace we think that it's very important to maintain strong attractiveness through the participants and to drive monetization together with increased volumes and business.

As we enter what looks like a severe economic crisis across the world, it will become increasingly important for us to offer the best prices and value to the consumers and the sellers, so we need to be very careful with our pricing. Last but not least, we are starting to monetize our platform with the third parties.

Some of you have picked up that we are opening up our logistics to third party customers that we are opening up or so Jumia advertising platform to non-sellers, and we will gradually see more of that in the future. And third and last remark to conclude the call, we want to reiterate that we are still at the very beginning of e-commerce in Africa.

In the recent months pretty much everywhere in the world, we are seeing how relevant e-commerce payment technology are to people, businesses and governments. In Africa, we are still in the early days of this journey with less than 1% penetration of e-commerce, and we certainly see a huge opportunity ahead of us.

We have built a very efficient, a very scalable platform for the years and decades to come.

We operate in asset-light marketplace very relevant, food delivery service, a unique logistics platform, JumiaPay which we think has the potential to become the leading payment system on the continent, and we really believe there is a lot of potential ahead for Jumia. And that we are very well-positioned.

Thank you again for attending the call and your attention. And we are now ready to open up the call for Q&A..

[Operator Instructions] The first question comes from Mark Mahaney of RBC Capital Markets. Please go ahead..

Okay, thanks. If I could throw in three questions, please.

Is it a reasonable expectation that gross profit after a fulfillment can continue to rise? Do you have enough structural improvements and as the mix shift do you have enough visibility into the revenue mix shift, if that's a probability that gross profit after fulfillment can continue to rise? Secondly, you on that slide 6, you listed a series of large number of pretty large brands, are there brands that are missing, I'm sure there are some, but there are a couple of key brands that you would really like to bring in that you think would be could really move the needle for Jumia? And then finally could you talk about if there's been a change in your customer acquisition channel strategy, are you finding part of that advertising efficiency, is it driven by the fact that you found more efficient advertising channels than you had discovered in the past and what are those? Thank you very much..

Thanks, Mark, very good questions as always. And I think, I mean the first one on the gross profit after fulfillment, the answer is, yes, definitely, right. And then -- and here to give you some color, of course, the gross profit after fulfillment is the sum of our revenues minus the fulfillment expense.

If you look at our monetization streams and their level of maturity, you can see how much potential we are still seeing ahead of us both for the existing monetization stream as well as new ones. If you look at for example marketing and advertising, we’ve barely started, right.

Many marketplaces around the world are very lengthier and for us this is something that we started a year ago, and we are seeing a lot of good traction and we are just at the very early days of that. We have also been talking in the past about Jumia Express, which we have barely started to monetize, and many more with our existing sellers.

Then there is all the monetization from the new revenue streams, which today we are not doing yet at all. And here I'm talking about monetization of JumiaPay as a payment platform. Monetization of Jumia Logistics as a third-party logistic platform as well as, I think we can side those two for now. And this is not even yet today in our P&L.

So we see a lot of upsides in revenue. Then in terms of fulfillment expense, I think here we are consistently seeing improvements quarter-over-quarter based on number of drivers.

Of course, one is the increase of volume because the more volume we have, the more partners we are able to use, and the more competition between them; and the more scale they get. So it's really a volume gain and then a lot of operational improvements.

In the press release, we gave you two examples of projects that we did during this quarter, but there are many others. For example, one of the projects was around the fact that we changed the cost model with the partners, and we were before the project paying them per package delivered, and now we are paying them per stock.

This is one example but there are a lot of initiatives both technologies driven but also just scale and efficiency and operational excellence to reduce the fulfillment expense for order, so certainly very confident about that.

In terms of brands, not really, there are so many brands that are looking today at Africa, and they are looking for ways to answer the continent.

And in the past for a brand to answer new emerging market, the brand you need to think about finding a distributor, establishing local presence, building marketing campaigns, multi-millions of dollars of marketing campaigns to build the brand and build a local present and our goal with the cross-border marketplace and with the marketplace in general was to really provide an efficient route to market for all the brands, which are not present in Africa to start serving the consumers and building their presence.

So it's not like there is one name that comes to my mind where it would be a game changer. And because the consumers they have alternatives for many things, but certainly the more we bring, the better. But there’s not like one particular game changer that comes to mind.

And in terms of consumer acquisition, it’s been -- the marketing efficiency has been driven by rather a lot of discipline and improvements across the board rather than one particular channel, which showed different efficiency or a surge in efficiency improvements rather across the board.

The hard work of the Jumia team and Jumia data and technology to just optimize our online channel, as well as leverage the offline channel that we use like JForce, telesales and all those, so it’s really across the board more general improvement and efficiency than anything else.

And yes and that also makes us confident because all those improvements there, they’re not relating to one particular change, but rather like across the board improvements..

The next question comes from Aaron Kessler of Raymond James. Please go ahead..

Great. Thanks a lot. A couple of questions; first, just any further details maybe GMV growth by category across the electronics versus kind of others, but if there’s any more details and some of the trends you're seeing there. Also maybe on the commission rate, look like it mostly maybe a change of mix that drove the higher kind of commission dollars.

Was there also any change of commission kind of rates in absolute as well and maybe how much room do you think there is to increase kind of commission rates longer term as well? Thank you..

Yes, very good questions. And at this stage we'll have to kind of stick to page 10 where we provided the breakdown by category per Q2 in 2019 and 2020 where you can see that the share of the fashion, beauty and FMCG has grown to 57% from 41%.

And certainly those have been the ones growing the fastest both in volume and value, and we'll try to provide more color or more break down as the quarters keep developing. In terms of commission, it's a very important question and something that we very often discuss a lot also internally.

And we are of the view that as a marketplace, it's very important to be attractive to the sellers and in our history every now and then, we went on and increased commissions. And most of the time when we did that the sellers was completely fine with it.

But some of those sellers were just re-impacting their selling prices with the commission increased impact. And they were accepting completely the increase, but essentially we were changing the price of the product they were selling on Jumia.

And that is not really the direction we want to go, especially now with the economic crisis that we think is likely to unfold. We want to make sure that we are able to be very competitive for the sellers, so that the sellers can offer very low prices.

And part of our monetization strategy is to drive revenue streams, which are both outside commission, right. So if you remember two years ago, we were almost only commission and we started to introduce more streams, so that we didn't have to raise those commissions but instead we're selling more services to the sellers.

And secondly, also leverage our platform to generate revenues from third parties. And as we are able to monetize JumiaPay or Jumia Logistics in the future, we may decide to actually reduce the commissions, and by doing that we think that our marketplace is going to be even more competitive.

So again here it doesn't mean that every now and then we don’t increase commission on a given category. We try to find the right balance.

But certainly it's not something that we want to drive brutally or in general we see more value long-term in reducing commissions and increasing commission even though on the face of it we have the power to do that..

Got it. Great. And quickly on the JumiaPay transactions, it looks like it was up nicely year-over-year but more flattish sequentially.

Is there any sort of maybe near term ceiling on JumiaPay transactions that would just give more penetration insertion of your markets and you need to open up more to get that penetration higher or was that just maybe just not a linear growth there?.

Yes. I think on this that the penetration of JumiaPay is a function of the penetration of JumiaPay both for the countries where it operates but also the different platforms. We have Jumia Food for the food delivery and the Jumia e-commerce and we have the JumiaPay app with the digital transactions.

So I think it's a function of all this and something in here we have been very clear also that it's not our goal to be 100% JumiaPay in the short-term or even in the mid term, right. We think that our success with JumiaPay and with Jumia in general have been to also recognize that cash on delivery is key, and is very important.

So we certainly want to maximize the penetration of JumiaPay, but we in a way want to go with the market and drive the adoption efficiently. And right now we're at 36% overall as a group of transactions.

And it’s 10 points more than a year ago; there are many countries where we still don't operate JumiaPay, and still many consumers who don't want to transact online; and we just want to recognize that. So we're pretty comfortable with the level where we are now.

We think it's going to continue where we live plateau or where will we be in two years, we'll see Certainly, it’s been going up and up; at some point, we're not solving for a 100%, but we know that in Nigeria and Egypt we are well above 50%, right; and we’ve published that in the past.

So we feel pretty confident that mainly two-thirds of the transaction in the mid term will be on JumiaPay, I am talking really 18 month from now or two years from now because this is what we have seen in Nigeria two years after the launch. So that's how you have to look at it I think, Aaron..

Next question comes from Ralph Schackart of William Blair. Please go ahead..

Hi, guys. Good morning. Thanks for taking the questions. Two calls or two questions, if I could please. I jumped in on the call a little late, so I apologize if you have touched in this, but maybe if you could share some perspective given the dynamics of the pandemic.

How the business has trended up post quarter? Any color for us on fulfillment expense initiative for the progress there, customer additions, anything you could add would be helpful? And maybe Sacha, just kind of taking a step back, I know you called it out in the prepared remarks in the letter about being able to emerge from the crisis stronger.

Just curious in your perspective on the business going forward with an unfortunate event, the pandemic, but how the business may strengthen going forward as a result? Thank you..

Thanks Ralph. I think the situation has been pretty stable for -- from a business perspective in relation to the pandemic for the last two months. We had team in April, a mix of quite strong disruptions in some markets and some parts of the business, right, and we have published that.

And some countries, where especially those where there was like a real lockdown where we’re seeing a bit of a surge in volume. And then throughout the quarter, throughout Q2 and also in July things went back to normal pretty much everywhere, right.

Being I mean normal -- I mean the normal -- that the same level of business that we had before the beginning of the crisis.

Of course, there's a lot of question marks around what will the country do? What will the countries do in terms of back to school and so on so forth? So there's a lot of uncertainty about it but from a Jumia business perspective things went we can say back to normal sometime during Q2, and since then I think pretty steady with no significant disruptions and no significant surge.

So I would say normal business. And what makes us feel good and I think I was listening to Jeremy and Antoine, I was hearing a lot of word, please, please and is really that I think if you consider the improvement of the P&L across the board, and you put it in relation with the growth of the business of 8% of the orders.

It does mean that the improvement is driven by fundamental actions on the key drivers of the P&L, right.

And that’s for us makes us very confident in a way because it's not -- we're not able to deliver this gross profit after fulfillment, which is like by far our record because we have seen like a big surge and now it’s happening because we are doing the hard work on monetization, cost efficiency, restructuring, sales and advertising and all that.

And I think that we made lot of choices like I said last year and some of them were not easy, closing countries, exiting travel, doing the rebalancing and so on. And that in a way we entered the crisis, right; already with all these actions well executed or almost done.

And for that we’ve been in a way luck to make those decisions ahead of what has come because no one could have predicted this crisis. And now we are very agile and very nimble. So in a way it’s something that is causing further development of Jumia that we made those decisions by then.

Any more questions?.

No. This concludes both our question-and-answer session and Jumia’s second quarter 2020 conference call. Thank you for attending today’s presentation. You may now disconnect..

Thank you, all. Stay safe and take care. Bye-bye..

Once again the conference has ended. You may disconnect your line. Thank you..