Q2 2021 Jumia Technologies AG Earnings Call
[music].
Good morning, ladies and gentlemen, thank you for standing by and welcome to <unk> results Conference call for the second quarter of 2021.
At this time all participants are in a listen only mode.
After managements prepared remarks, there will be a question and answer session.
I would now like to turn the call over to suffer the mirror head of Investor Relations for Julia. Please go ahead.
Thank you.
Good morning, everyone and thank you for joining yesterday for our second quarter of 2021 earnings call with US today are cash up on your neck, and then you know of data goes.
<unk> balance includes the use of <unk> as my life on price, but I see on for this call is also being webcast on the IR section of our corporate website.
I'll start by covering disease Harbor.
We'd 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.
Of date or revise these statements for.
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 annual report on form 20-F as published on March 12.2021.
In addition on this call we will refer to certain financial measures not reported in accordance with <unk> you can find reconciliations of these non <unk> financial measures for the corresponding I asked for as financial measures in our earnings press release, which is available on our Investor Relations website.
I also would like to cover 2 housekeeping important all of our members will be presented in U S. Dollar going forward as a result of functional and presentation of the currency changes from the euro to the use of Thunder effective April 1.2021 for convenience purposes Q2.2021.
Results highlight the noodle has been provided in the appendix of this presentation I also would like to point out that all of our growth rates. We will mentioned in this presentation are on a year over year basis, unless otherwise noted with that I'll hand over to fashion.
Thank you so far welcome everyone and thanks for joining us today.
Our results for Q2 reflects what we have announced during our last call.
<unk> investments in our platform to support our objectives of driving accelerated usage growth as well as Jamaica.
Jeremy will walk you through in a moment of the detailed results, but I can already say that we have started to increase our investments in sales on advertising as well as technology expense to support our long term growth.
We've had the fastest growth of transactions of the last 5 quarters. This is early momentum that we want to build on to accelerate even more.
And we have a great milestone on junior pay that allows us to process third party payments.
This focus on usage growth and junior PE is now possible because our fundamentals of very strong.
Supports our long term growth and also ensure that as the business scales. It turns profitable.
I would like to remind how much of the business has changed over the last years on page for.
First our marketplace has never been more diverse and relevant for our consumers.
Share of G M V from everyday product categories.
Is now 63% it was 41% 2 years ago.
This diversification has been in the making for many years as we've been working on the supply side of our marketplace developing partnerships with brands and sellers, which put us in a position to make significant inroads in those categories.
Secondly.
We have transformed our unit economics.
Gross profit margin.
Of 12% of <unk>, almost doubling over the past 2 years.
We've been generating positive gross profit after fulfillment for.
For now 7 quarters in a row.
And obviously this is very important because we have now that you need to kind of execute at the level that gives us the flexibility to invest much more behind growth.
And finally, we have significantly strengthened our balance sheet raising over $570 million of cash over the past 9 months and this gives us the firepower to fund our growth investments.
Paul This as we've discussed in the past was achieved with no particular tailwind from Covid.
So our focus going forward is very clear scale, the platform and develop junior debt.
On page for here's how we are executing across all areas of the business to serve these 2 objectives we.
We are ramping of marketing investments to drive even more brand awareness so towards.
Towards consumer education, with a view to of course accelerates consumer acquisition and retention.
Here, we want to drive both e-commerce and payment adoption.
Our commercial efforts aim to provide the broadest and most relevant range of products and services with a focus on everyday categories.
Categories cover of physical goods like defense AG grocery fashion beauty, but also lifestyle services, such as food delivery grocery delivery digital services offered on the junior pay up.
Our logistics operations are focused on constantly reducing delivery times and further increasing the network reach and convenience for consumers and last but not least technology is the backbone of on.
All of our operations and key to support user engagement and conversion rates.
We are aiming to increase our tech head count by 40% by the end of the year and in particular expand our newly launched tech hubs in the city of Cairo, Egypt.
It is a very exciting time for us of junior with.
<unk> pipeline of projects and innovation that will significantly enhance each step of the consumer journey and allow us to better serve both consumers and sellers and I'll now hand over to Jeremy who will walk you through the performance of Q2 in more detail and dive deeper into some of the initiatives I just mentioned.
Yeah.
Thank you for Shaw, Hello, everyone and thanks for joining us today.
Let's start with the review of the usage trends during the quarter, we are on page 6.
So as I mentioned, we are very focused on accelerating the usage growth and in this context on Q2 of this year was really a transition quarter, where we ramped up our season on advertising expense after 6 quarters of reduced marketing expense.
Now what does 10 versus last year. He does we have built sufficient strength.
You need to economics to allow us to invest more into growth for.
We are seeing early signs of acceleration in the business.
With the orders, reaching $7.6 million, increasing by 13% year over year, which was the fastest volume growth of the first 5 quarters when.
When we look at the duty.
Volume growth by product category, we're seeing areas of strong momentum emerging very clear.
Delivery was the fastest growing category on our platform in volume terms.
Listing to highest ever number of quarterly orders.
Almost 60% and accounting for 22% of total orders on our platform during the quarter.
Delivery is the first area of the business, where we deployed our growth acceleration of false late last year to reignite the use of growth following the disruption on the onset of dependent.
Annual active consumers reached 7 million of 3 per cent as we continue to acquire new consumers and engage at day 1.
M D.
$223.5 million USD down 11% on a currency adjusted basis.
In terms of trends by product category, we continue to see diversification of G. M D in favor of of your Riddick categories.
On page 7 you can see that phone and they.
Went from accounting for 43 per cent of the gym beat in Q2 last year.
<unk> <unk> 3 per cent of the GMB in Q2. This year for the next 20 categories continue to cgmp declined during the quarters due to multiple factors, including supply disruption with global chipset stroke teach alongside muted consumer demand due to high to get tight discretionary nature of these items.
In contrast.
Good day category and lifestyle type of excuse me in particular, alright, Brian things very strong momentum under the lifestyle services umbrella, we could boost for delivery and digital services offered in the junior debt pay up.
These categories are accounting for an increased share of Jim.
Once you between 14% and Q2 this year compared to 9% Q2 last year.
Fastest growing category and Jim view of the financial on digital services offered.
You've got degree of posted the largest ever quarterly GMP in Q2, this year, but more than 60 per cent compared to last year, which access was drunk on water.
<unk> 6 per cent compared from Q2.2 years ago.
On the physical fronts for you.
Goods from sorry, the fastest growing category and Jimmy terms, what session, which continues to be the largest category volume wise on our platform.
I would also like to call out of grocery and consumable category, which is among the categories of focus for us.
Here, we're leveraging both our on demand and e-commerce platforms to meet the variety of consumer need in this space.
Our e-commerce platform catch us larger grocery basket size for plant purchases we.
We have accelerated the pace of stellar on Brent on boarding and just got to go.
In Q2 this year alone we on boarded over 708 key of Mcg brand and sellers, taking account of life product listings and just got degree from approximately 65000.
End of June last year.
Most of the hundred thousand end of June this year.
Through our on demand platform to me of food consumers can make I look for to ease of grocery on this MTGE of items from convenience outlet in supermarket for did you read within 1 hour we're on.
Also piloting the use of dark stores on micro fulfillment centers will kick in of high population density areas for the.
The fulfillment of grocery orders.
He is a strategic category for us because it drives user engagement and stickiness.
And we have the relevant logistics platform and supply relationships will for.
For consumers of companion value proposition and you just get the growth.
What we're encouraged to see early signs of acceleration in the business and multiple pockets of strong momentum, we have significant opportunity to meaningfully accelerate tuesday's Roes on our platform.
And I'd like to give you more color on what we're doing on the marketing and technology fronts to drive usage of acceleration is initiatives are informed by consumer insights as well as multiple pilots under keto certified.
A few months.
On page 8 starting with marketing.
Ramping up our marketing investments across below and above the line to drive consumer acquisition and retention.
We have I like your set of initiatives, we are implementing across these tenants.
Our below the line of activities are focused on online fulfillment channel.
Good on Facebook and over all phases of for consumer journey, starting from brand awareness from a.
Customer targeting up instead of <unk> as well as re targeting of returning consumers, while increasing the overall amount of marketing spend on this channel in 2021 compared to 2020, leveraging efficiency learnings of last year.
We are also we also intend to implement of fulfilling it approach, particularly on Facebook that goes beyond direct response ads and includes more brand awareness campaigns with more engaging video content targeting tau what's relevant audience.
Lastly, we plan to further scale, our social media Influencers channel on the back of the success of this channel as a consumer education on acquisition tool in certain countries such as Egypt.
Both of the line China's we're increasing our overall investments in offline marketing channel.
Even more brand visibility and consumer education with always on above the line company.
We're also leveraging targeting tools to identify underpenetrated areas and now I'm starting to see the out of home advertising company.
Lastly, we're deploying more targeted consumer incentives enhancing our consumer engagement strategy with the rollout of our new CRM growth towards.
We have developed and piloted the CRM tool based on machine learning algorithm that allows us for more refined for targeting and more tailored push notification from 10th allowing us to both reduce opt out and drive usage of uptick.
There is no single silver bullet with respect of marketing it all comes down to granular and disciplined execution across each and every step of the consumer from that's really the spirit of our approach.
Moving on to take total jumping that page 9.
That.
Is the backbone of our platform and we're increasing our investments in this area to build more products and features to enhance user experience and engagement on our platform.
We're planning to increase of Arctic head count by 40% by the end of the year. We go for.
On our newly launched take pets in Cairo, Egypt, Okay real hub with the host over 100 Tech professionals and will include dedicated teams to front end project.
You highlighted a few examples of such projects on the site.
On to increase the percentage edition of our on site content, including homepage product, we get search et cetera.
Our consumer customers are responding very well to give me say something and.
And we plan to and we plan to enhance our day and weekend emissions with dedicated teams gamification content accretion flush stays on branding campaign.
Last but not least.
We're planning for started looking selected social commerce features such as user generated content, including video picture of floating reviews on multiple features for citizen of nutrients.
These investments are long term in nature, and we expect them to play out over time as we execute on our exit of issue on strategy.
Let's now turn to junior debt on page 11, which from the integral part of our Ax solutions acceleration strategy.
We have been consistent in our vision for <unk> from yesterday, which is the first developed our payments and Fintech solutions within the junior platform and can make he offered them of platform to third parties.
We are pleased to announce a major step to world of platform payment development in Egypt.
Bank of Egypt, the largest state owned bank of <unk>.
And on approval in principle from the Central Bank of Egypt will for certain services and partnerships.
The services of them on service provider payment facilitation and payment Aggregators and they will allow us for sustainment of platform on behalf of third party merchants.
You see the very first step from the expansion of our services of platform and will keep you updated on the relevant developments on this front as we build out these activities.
On the digital and financial services side, we continue to expand the range of relevant services available to consumers on the junior pay up.
In 19, new services in Q2 this year.
In Morocco for example, the West Division is now available to consumers on the junior of the App, allowing them to recharge their highway toll fees on the junior pay up without the need for stuff that physical tours on their terms.
Moving on to the dreamy of bad performance in Q2 on page 12.
<unk> decreased by 4% on both of constant currency on currency adjusted basis in parallel with the decreasing GMB on platform penetration of junior debt as a percentage of GMP increased from 25.3 percentage in Q2. This year from 23, 5% interest to last year and we're pleased to see that multiple countries.
Print of reached significant high up in the attrition rate is Nigeria, and Egypt, So investing 40% of <unk> penetration as a percentage of Jim in the first half of 'twenty 'twenty 1.
Moving on to volumes on page 13, <unk> per transaction increased by 12% the fastest transaction growth rate of the back for quarters.
The transaction growth was supported by accelerating volume growth in the business, particularly.
Particularly strong momentum in the for did you forget to go.
Overall 75 full percentage of orders placed on the junior platform in the second quarter of 2021, we're competing using from yesterday.
Compared to <unk> 35, 6% into second quarter of 2020.
There was meaningful runway for us for the road from yesterday, both on end of platform and our increased investment in marketing and technology include a version for junior debt drive payment adoption and support product development.
Now handover to month, 1 will walk you through our financial performance in more detail.
Thank you Hello, everyone.
I'll start with on monetization metrics.
Q2, 'twenty, 1 marketplace revenue was up 1% and gross profit of 12%.
Our gross profit margin of percentage of DMV continue to expand year over year from 10, 2% in Q2, 2020% to 12% in Q2 'twenty 1.
In fact, these trends by looking at the details of each marketplace revenue streams on page 16.
Having achieved a robust level of do you need to kind of mix with gross profit after fulfillment at 1 U S. Dollar per order, we made the deliberate choice to reinvest some of this profitability back into growth.
As part of debt, we took targeted actions to support usage growth, increasing consumer price incentives and shipping discount.
These drove a decrease in commissions and fulfillment revenue by 7% and 2% respectively.
On the other end value of that services revenue increased by 10% the fastest growth rate of the past 6 quarters.
This was the result of increased volumes on our platform, which led to higher shipping contributions collected from Saturday.
It was also supported by increased take up by et cetera for warehousing services.
But particularly cross border sellers, who leverage on all local storage facilities to reduce delivery times for our consumers.
As we use the monetization of intensity on the commissions and fulfillment revenue, we are ramping up new monetization streams to give us further flexibility to invest into growth.
1 of these streams ease of marketing and advertising, which increased by 18% from Q2 'twenty 1.
Bolstered by robust growth of our console product solution.
We are constantly enhancing the user experience and relevant for.
I'd product to drive increased click through rates.
And we do so through better audience segmentation and no debt at placement and overall improve aberrations in the 90 day.
Another key monetization stream for US is all logistics offering to third parties on page 17.
This is on offering where you rolled out in early 'twenty 1 on the back of our successful pilots in 2020.
This activity is experiencing very strong momentum with a record $1.3 million packages delivered in Q2 'twenty 1.
Compared to balance Dominion packages in the full year 2020 on.
On behalf of over 300 clients.
Our clients of.
A very broad range of sectors and we have led out on the base of few examples.
Of logistics of the service clients.
Worked with during the quarter.
<unk>, we collaborated with the UNICEF for the delivery of over $16 million long lasting brick nature must be 2 net 2 out of across over 100 remote.
Great.
In Ghana, we worked with eastern work on sign language, which is a leading distribution company with a portfolio of although 1 for you.
Hi.
Gates queues across Africa.
Collaborated with the group for light OLED services to their customers and again.
In Nigeria, we worked with.
Bank of fully digital bank offering them product delivery to customers across Nigeria via wrote an outbreak.
We are very encouraged.
The strong momentum in all logistics out of service offering and we intend to continue building of this business to meet the logistic needs of a broad range of industries in Africa.
Whether it's advertising logistics of the salaries of payment services in the future we have of competitiveness of.
Assets and services to support the growth of businesses in Africa, and their transition to the digital economy.
And building on these services into sustainable monetization streams provides us with the flexibility of your entire power to further into the growth of for consumer facing activities.
Moving on to growth on page 19.
For the past 2 years, we have transformed all you need to kind of meat and the economics of fulfillment in particular.
Gross profit after fulfillment expense reached 7.7 million USD of 16%.
This is our seventh consecutive quarter of positive growth growth.
After fulfillment expense.
What was the amount of expense remained stable in Q2, 'twenty 1 versus Q2 'twenty. Despite an acceleration in orders as the increase in freight and shipping costs was offset by cost savings and increased efficiency of fulfillment centers.
In addition, we are able to pass on an increasing proportion of whole foods and rent expense.
The combination of consumers and sellers.
Fulfillment on value added services revenue streams, respectively.
The pass through of thoughtful finance expense.
Measured at as the ratio of the sum of fulfillment on the value added services revenue on the fulfillment expense.
Increased from 73% in Q2 'twenty 2.
75% in Q2 'twenty 1.
This ratio may fluctuate in the near term as we intend to use targeted shipping subsidies to support usage growth.
Moving on to sales and advertising cost page 20.
We are also increasing of thousand advertising investment to support <unk> growth.
Sales and advertising expense reached $17 million in Q2 'twenty 1.
In Q1 more than doubled the spend into 'twenty 1.
However, it is largely in line with the amount of debt in Q2.2000.
When you read through on to more historical levels of marketing investment after a period of significant reduction of Nova for Iot coauthors.
And these marketing investment are deployed across all relevant customer acquisition and retention channel.
Outlined by Jeremy earlier.
Turning to technology on G&A expenses page 22.
Technologies, another area of increased investment with technology and content expense, reaching $8.4 million USD of 8%.
General and administrative expense, excluding SBC reached.
Reached $26.6 million USD down 15%.
The trend was mostly attributable to a decrease in provision.
Particularly as the second quarter of 2020 included 5 million USD of.
Provision for class action settlement.
Moving on to adjusted EBITDA loss of page 22, we have clear objectives of usage growth acceleration and Jimmy assay development and capital allocation to reflect debt.
Adjusted EBITDA loss increased by 15% total income.
Recent growth investments.
Sales and advertising and technology expenses was larger than the expansion of gross profit after fulfillment expense.
Savings generated in G&A expense excluding SBC.
Let's now turn to balance sheet on cash flow.
We are increasing on growth investment in an asset light manner, leveraging specific benefits of our operating model.
Capex in Q2, 'twenty, 1 was 1.5 million USD as we operate <unk> logistics of the platform with very limited capex requirements.
Net change in working capital resulted in an inflow of $12.6 million USD in Q2 'twenty 1.
Debt was mainly attributable to an increase in payables associated with the Jimmy on anniversary campaign, which took place on June 21.
Cash utilization for the quarter day.
Cash used in operations and investing activities was 27.4 million weighted in Q2 kind of Q1.
That is significantly lower on the adjusted EBITDA loss of 42 million USD. Thanks to the working capital inflow during the quarter.
The cash on cash equivalent position at the end of June 'twenty, 1 was $637.7 million USD.
This stronger balance sheet position gives us the firepower to increase in a disciplined manner.
Investments in use age acceleration in Germany, I think development.
With that I'll hand over.
Especially for concluding remarks.
Thank you on try and thank you very much.
In summary, Q2 was a transition quarter.
We ramped up our sales and advertising expense after 6 quarters of reduced marketing spend.
Starting to see some early positive signs and we are confident about the impact of those investments on usage growth acceleration.
As we have highlighted the past 2 years of being transformational for junior and have set a strong foundation for us to accelerate execution on our priorities.
We're very excited by the new phase, we're entering we see a vast and untapped market opportunity both on the E Commerce and Fintech France.
And we believe that we are uniquely equipped to capitalize on the simple change.
Key objectives for us going forward.
Very clear.
Accelerate usage growth.
<unk> of GMP.
We're deploying more capital, particularly in marketing and technology to achieve these objectives.
And as we mentioned also during the last call the acceleration will not happen overnight, we accept we expect it to be gradual.
We have already seen from early signs of success in Q2 with accelerating holders of growth buckets of very strong momentum, whether it's for delivery or as of June Fas services and.
And we plan to continue sharing with your milestones of success as we execute on our strategy.
Many of the investments, we're making now and that Jeremy told you more about earlier are long term in nature.
And we will take no short shortcuts in pursuit of quick wins, we are committed to building the <unk>.
Successful business and a thriving ecosystem for our consumers and partners for decades to come.
And of course, while we are currently very focused on growth acceleration, reaching breakeven remains very much on the agenda.
Our capital allocation approach to cost will continue to be disciplined.
We may see some fluctuation in unit economies in the near term as we ramp up of investments that we see.
Nathan you expect usage growth and the diversification of our monetization stream to support our path to profit.
Thank you very much for your attention and operator, we are now ready to take questions.
Ladies and gentlemen, the floor is now opened for questions.
If you have any questions or comments. Please press star 1 on your phone at this time.
We ask that while posted on your question you. Please pickup your handset is listening on speaker phone to provide optimum sound quality.
Please hold while we poll for questions.
Yeah.
Your first question for today is coming from Aaron Kessler. Please announce your affiliation then pose your question.
Great. Thank you Aaron Kessler Raymond James.
Just quickly if you can discuss maybe of the Covid impact you're seeing in the quarter, maybe end of Q3 as well obviously still of top of mind for a lot of investors and then secondly on the marketing side.
What are some of the key measures, but we should be watching to analyze the success there or is it more focused on user growth near term GMB.
1 of the key metrics are going to be looking at to analyze the success and should we start to expect to benefit in Q3 or is this more of a multiyear quarter of multiyear journey on the marketing side. Thank you.
Thanks, very much on for the questions.
On the Covid impact and.
As you all know and as you know we've been commenting quite of notes on that for US it's been more of a disruption.
And then of tailwind and this has been largely because of the in Africa with 19.
Knockdowns the same way we have seen in for example, Europe or the U S and people could deal shop could still go to the stores and only during the day and what we have seen on the contrary is a lot of restrictions of movements things like for a few preventing our delivery of partners from doing deliveries at nice preventing restaurants from opening.
At night, and even for delivery and so it's been it's been a lot of that.
And there are still some of that happening here in there right. So in the last few weeks of few big cities of announced curfews on APM for example.
Our ability to do night deliveries and of course of the meeting the restaurants from doing it for delivery at home.
So look we still see some of that spread.
I would call those.
Rather minor.
We believe that we are operating more normally right now right as we have been over the last few months. So.
No particular change.
Change in the last few weeks, some rather minor here and there, but again keep in mind that for us it's been over on more of a disruption on a net basis and on a tailwind.
When it comes to.
2 marketing it for very good question.
And of course as you start to see there's obviously some lag between the investments that we're doing it sounds on advertising and some of the benefits that we're seeing in terms of Skus age acceleration and over time, what we want to see obviously is an acceleration of the of the 3 use edge matrix that we that we see a return of the <unk>.
The holders and the active consumers right, given our focus and given our priorities.
On the older is the metric that tends to grow the fastest because we're focused on driving the everyday categories in there.
Engaging with the consumer so we think debt.
On this metric of holders will be the 1 to watch a bit more than the others, but again over time, we want to grow the various use age metrics.
And the Kpis that we want to look at over time and of course the ratio of debt.
The growth acceleration I would say year over year of those 3 metrics as well as the efficiency of the marketing both over <unk> over the number of holders as well as then.
For active consumer on an annual basis right.
And then.
When can we see those benefits I think there will be gradual so again, we start to see some of that in Q2.
And we are very confident that we will see more and more of them gradually in the next few quarters.
Great. Thank you Sasha.
Your next question is coming from Sarah Simon. Please announce your affiliation then pose your question.
Yeah, Hi, Sarah from there on back.
2 questions. Please first 1 was on.
Do you have ramped up our marketing investment.
Can you give us a bit of color on what youre seeing in terms of the evolution of customer acquisition costs.
On the second 1 is if we look at slide 7.
And that is obviously, becoming quite familiar in terms of the shift away from guidance on electronics.
So you've talked about FMC AG.
Build outs on is keeping the FMC is growing faster than Haverhill fashion. You said, it's the biggest it's growing fast and FMC G because that would be physical goods.
And food deliveries up from 9 to 14.
I'm just wondering what's the cash degree which is within.
The Blue section.
Isn't growing or is maybe shrinking if you can just give us a bit more color that.
Of course, thanks, Eric on the customer acquisition cost. It's a tricky question because it's a tricky for us, but it's tricky because right now we're doing a lot of investments on on and on consumer education on.
And then as we call them in an offline activities like Billboards and Youtube videos, and so on and so forth.
And then 1 has to be careful when you decided to make some of that location about how much goes to new consumers versus how much goes to returning consumers right and so depending on the assumptions you can you can really.
Have very different view of how the customer acquisition cost is looking so this is why we like to look at the.
The efficiency of our marketing dollars over a period of for 4 quarters and I'm looking at the LTM last 12 months' active consumers and the marketing that we invest in order to engage those consumers. So I think with time, we'll see we'll see this metric continued to trend in the right direction at the same time.
Given how much we have reduced marketing investments over the last few quarters and over the last 6 quarters with reduced on reduced and now we have brought the sales on advertising back to the level of 2019, I think we will deviate from the last 12 months efficiency right. So they will have to see all of the next few quarters shape up.
But.
I think that the efficiency will not be as good of the last 12 months of your state because they were quite unique and that over time of or over a longer period of time multiple years I think it will keep trending in the right direction and become.
More efficient with time as consumers get comfortable with the with you on 9 transactions in E Commerce in general.
Now.
On slide 7.
On.
It is hard to just tell you here and I think it's.
It's.
Overall.
The trend is that fashion beauty and <unk> are doing well I think faster fashion is doing well I think last year in Q2, maybe we were having a lot of sort of masks and <unk>.
And COVID-19 related items for the first time, so maybe that just changing here, but there's not 1 big trend or 1 big category debt.
I could name that is not doing well I think of it.
More generally try and perhaps there is some of that.
From last year, specifically Q2, because it's when it started to happen and it seems to be the mix because of that but that's the only thing that can come to mind right. Now there is not something that is major of there.
Okay, and then within digital I think last quarter, you highlighted for you actually scaled back some of the digital payments, which 1 can be profitable for us.
But in the presentation.
Can you highlight for digital services is a great category.
Have you changed that kind of philosophy, because I think.
It was sort of like maybe I'll say recharge and things you scaled back on in Q1 sort of you have you shipped switch that back on in Q2.
No not specifically I think of the trend is continuing debt those categories or are still there and still very important for us.
We tend to 2.2 to see them into to make decisions based on on customer lifetime value with those categories right. So that trend continues and that's on a lot more of those in Q2.
The trend that we talked about in Q1 continues and I think is a good trend because it means that we have more users on just union pay up doing more than just their time right and we see lots of momentum on categories like gaming and financial services micro loans and so on so I think it's very good.
And we.
We hope that this will continue.
Okay, sorry final final follow up on that would be.
I mean.
Given that some of the digital services you are emphasizing that you said.
If we think about growth.
Delivery.
For any from digital services.
Do you think the great to see what how is the growth being higher than net from the non 14 would imply.
If that makes sense.
Yes digital center of maybe stayed flat.
Digital services growth. Thank you for <unk>.
Given the pluses and minuses you talked about.
And so on the because on the digital services you'll have.
You have more usage on those services that I mentioned and probably even less use age on every time I think on food delivery on quarter last year, which was quite strongly impacted by the disruption right. So I think.
We had shown does good this graph last year, where we had shown for delivery going down quite significantly starting in.
In may or something like that and this year of course, we see less of those disruptions. So some of the food delivery is growing faster on the.
In this quarter because of course of some of the disruptions from the previous quarter if that makes sense.
Yeah, Yeah cool, thank you very much.
Your next question is coming from Lamont William Please announce your affiliation then pose your question.
Hi, <unk> of Stifel.
So then just a quick question when you look on look on.
Marketing expense for the balance of the year is this level that we saw this quarter kind of the run rate, we can expect from <unk>.
We're going for the for the balance of the year or should we see this on.
On ramp even more.
We would we would hope to be able to ramp up gradually from this level.
And of course, you know we part of the marketing is on investments in the brand part of it is more performance and conversion driven so.
Please don't take it as a definitive view, but the intention would be to to gradually increase from that level.
Okay.
As you live with it.
Alright.
Oh I'm sorry go ahead.
You know I think you have to look also.
<unk> for your perspective, right. Then I think you can see that in 2019, and we had almost the same level as the level that we just had here right and if we're thinking about Q3 Q4, we of Black Friday coming and so on so I think you need to take 2 to 3 year perspective, 2.2 of appreciated when I say gradually increase it means from both.
From the level of Q2, but also from the level of historical years, because Q3 Q4 of course, you know that you have.
The ramp up of Black Friday.
Okay, great and just sort of as a follow up.
So is there any callouts in terms of.
The volume growth by geography.
No nothing nothing special we are still very very well diversified Nigeria of about 25%.
All of the activity in Egypt about 'twenty and then we've got.
In North Africa, West Africa, East Africa, South Africa, nothing outstanding out there I think it's.
Gil.
On valued in.
Of course, there is some some countries always doing better in some countries of it less on this and on that but I think overall.
It's a pretty consistent story.
Okay, great. Thank you.
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Great well, thank you very much everyone and.
Looking forward to updating you in the next few months and as always if there is any feedback any questions. We are available. Thank you. So much take care of everyone Bye bye.
Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.
Yeah.