Q3 2021 Jumia Technologies AG Earnings Call
Ingalls.
To me is a very different company today versus four years ago, we have increased marketplace relevance, we have enhanced the connex strengthened our balance sheet.
And ultimately we've built what we believe to be a very strong and scalable platform.
<unk> the marketplace logistics payment all adapted to our markets in Africa, and given the strength of our fundamentals. It's the right strategy now to scale the platform.
If you move to page four you can see that the acceleration is now underway.
Quarterly orders reached all time high record number in Q3 2021, posting the fastest year over year growth.
For the past seven quarters.
Consumers.
We've got we've posted in terms of annual active consumers the fastest sequential growth over the past five quarters.
And we recorded in Q3, the highest ever number of quarterly active consumers and as a result of the acceleration in consumer in orders, we are reaching an inflection in gmg, which is now growing by 8% year over year.
This is great news.
<unk>.
Underway, we see good momentum and certainly we are working to drive even more momentum going forward.
On page five you can see that adjusted EBITDA.
Reflects the increased investments in the long term growth of the business.
There are two main areas, where we are kind of investing the first is consumer adoption.
We're increasing our investments in sales and advertising and consumer incentives in order to.
Drive increased brand awareness increased brand consideration.
Version of new consumers and increased loyalty.
We're investing in our brands, we are investing in our consumers both for long term growth and we do it.
<unk> targeted and disciplined way.
Second area is technology and G&A.
Here, our objective is to accelerate the development of a product and features for an even more engaging and seamless user experience as well as of course the development of Juniper.
We are comfortable with the with the increased level of EBITDA loss, given the strength of our but our unit economics that we just that will come into the minutes.
The good signs of growth that we have just seen and of course, our cash position of private bid and $84 million at the end of the quarter.
Now, let's review on page six.
The unit economics, which obviously are a key enabler for these growth investments.
This page you can see that.
The average order value now stands at $28 as.
As we continue to shift our mix towards more of the everyday product categories.
And in parallel our gross profit after fulfillment expenses.
Excluding consumer incentives, which are deducted from revenues.
And at 1.3 dollars or older.
Which represents four 6% of the value of each older too.
Two years ago same numbers were 0.5, the others and one 2%.
Even this given the strength of the unit economics, we are investing more and so scaling the platform and.
This includes targeted investments in consumer adoption, we can see.
On this chart that we have.
Increased consumer incentive to 0.9 dollars per order.
Which level, which is similar to the ones that we had two years ago and our sales and advertising for older are now standing at $2 $8.
We believe that we have very strong economics, and this will continue to allow us to invest into scaling the platform.
With this let me now hand over to Jeremy who will give us more details on that.
Great.
Thank you, Sir Hello, everyone and thanks for joining us today.
So we'll kick off with the review of the user experience during the quarter on page eight.
So on page eight.
Access is true.
The strategy.
And then just hoping somebody else.
<unk> reached an all time high.
I imagine surpassing the prior year Q4 weeks and presumably at 28% year over year, which is a faster growth rate of that segment.
Sure.
Annual active consumers reached $7 3 million.
8% year over year supported by the strong acceleration in vehicles during the quarter.
We're also seeing a sequential step up.
To keep consumers, but forward seaport global Walter which is the fastest sequential growth of the past five quarters.
As a result of objects that there shouldnt be consumer and orders growth.
Reaching an inflection point in the GMB trajectory, which increased 8% year over year Rajeev prudently.
In.
With this momentum and we believe we can maintain total occupancy focused categories and as we continue to invest in growth.
On page nine.
You can see that we continue to shift the mix towards video product category.
Went from 44% of the JV in 2018% to 64% in Q3 this year.
No.
On a dollar.
If we look now on page 10, and the trends by product category with multi.
We see that the GMT growth momentum across all categories with the only fully electronic with.
Continued to be affected by supply chain disruption.
In Q3, the fastest growing category and Josie terms was did you got in financial services, which almost doubled year over year.
<unk> was the second fastest growing category in GMP tariffs.
Also the fastest brake category in terms of items sold.
Its highest ever number and almost doubling year over year we.
We see great momentum in the grocery category, which would keep improving to service the needs for consumers.
Delivery may take three months.
And what's the second factor is bringing category in terms of items sold.
So anybody almost 40% year over year.
You did agree posted its highest ever quarterly review with over 2 million orders.
We are pleased to see broad based momentum across everyday product categories, and we are confident that our continued investment and disciplined execution, which further yes.
Richard.
We are moving now to Julian and Paige twin twist.
Speedy.
Increased by 15% from 56 million in Q3 last year to 64 and has to be given in Q3. This year supported by the growth in medical.
Digital services in particular.
On platform penetration of <unk>.
Recently, the Jimmy reached a new high of 57, 1% in Q3 this year.
55, 4% in Q3 last year.
If we turn to transactions on page 13.
Cathay transactions reached 3 million in.
In Q3 each year.
34% year over year.
Fastest transactions growth rate of the Paas.
This quarters.
Transactions growth was supported by accelerating volume growth across the business.
The food delivery category in particular overall.
Overall 65, 7% of orders placed on the junior debt form you choose for each year were completed using between compared to 64, 1% last year.
In parallel with increasing the penetration of <unk> on our platform.
And disciplined linear we have initiated the first step.
The off platform.
It's strategic.
Earlier this month.
Where we are starting to process, our first payments of platform for third party online merchants.
I'd like to take this opportunity to explain in more detail our strategy and.
I'm now on page 14.
As explained in the past our strategy is.
The two sided.
Tim for consumers and merchants.
The first and essential nature of this ecosystem is payments.
For consumers, we are <unk> out with accounts that can be linked to the payment method of choice.
It can be leap with ABB for credit card bank account or whether it's.
There is a huge variety of payment methods in Africa, and we are.
It took out account, we embrace and accommodate the diversity.
In the future, we intend to continue to get basic out accounts into a full fledged while it is an extended dementia functionality.
The cash in association between elections and many more.
For merchants, we have built.
Julia branded checkout solution that can leverage existing data can be a better checkout comforters and thats either so we shouldn't we're currently rolling out to third party merchants in Egypt.
On top of the payment solutions were clearly an extensive range of financial solutions for both consumers and merchants.
For consumers, we have a number of distribution already.
Yes.
Offered by third party service providers.
Microloan 70 savings products insurance et.
Et cetera.
These products are licensed in select countries remained in the early stage of their development.
To further expand and diversify the product offering.
For merchants.
We're also developing a range of relevant financial services.
Starting with credit products.
Today, we connect <unk> with third party financial institutions, helping them access credit leveraging dilutive.
Goodbye.
Three properties.
In Q3.
500 loans, where these burst.
<unk> versus last year and benefiting over 300 unique center, a 55% increase year over year.
As to credit and financial inclusion is meaningful.
City centers, whether all of the Trulia platform and further.
Yeah.
Great base of merchants.
In addition to payments and financial services, we are developing an extensive range of digital services for consumers and merchants or consumers.
Already offering a broad range of services.
And we're constantly extending it can be.
Give you a sense, we now have more than 330 is available ranging from the easier University business to <unk>.
For Hudson's we offer user friendly features protract transactions balance sheet and settlements and they also have access to marketing tools to allow them to take our promotions to specific customer calls.
You may have been a core part of our strategy.
We're very excited about the recent development and what's coming ahead, and we have all of the relevant building blocks to grow.
And Fintech solutions.
Africa.
Now I hand over to suffer with covering for all time today.
We'll walk you through our financial performance in more detail.
Thank you Dan.
Regarding monetization metric.
The strength of our marketplace revenue.
16.
Marketing and advertising revenue increased by 14%.
Baidu Saturday.
Our AD solution, we have doubled the number of monthly filler AD campaigns in Q3 21 compared to the monthly average obviously first half of the year.
<unk> generally.
Generally tighter budgets.
Friday and agencies in particular.
You added services revenue increased by 11% over a year.
Results of increased volumes and I would like one.
Higher shipping contributions connected when standard <unk>.
Increasing cafe standards of our warehousing CFO.
Commission revenue.
Revenue are both impacted by come to mind.
Excluding this impact commissions revenue was up 18% driven by usage growth and performance revenue was down 2% at least show through did you keep going back to the question Mike.
One of the key features of our revenue model is a breath of our monetization stream.
The flexibility to access your monetization strategy.
Part of the monetization strategy is also good.
Drive revenue and margin of our technical and Apple is holding up nicely.
And you will be at bald.
I now would like to give you an update on June six on page seven.
We I think stronger momentum in this business and we reached a new milestone in Q3 'twenty one with revenue generated from this activity, reaching the million barrel Mark.
Driven by a record value of $2 9 million packages.
More than doubling quarter on quarter on behalf of over 7% decline.
Our clients and a very broad range of sectors and we have laid out on the page.
The importance of logistics editor with clients what clean during the quarter.
In Kenya, we collaborated with canon that oil, leaving only marketing company to expand our logistics capacity and.
Feraheme sales outlet and pipelines across the country.
And I recall, we were quick Blackman distributors Lucky Doug to serve wholesale and modern trade clients across the country, including Gabby worked with genuine and evening F&B with kidney its Eric.
<unk> across the greater Phoenix area.
We are very pleased with the momentum and milestone. We believe we have created a very unique solution expect one relevant very relevant to large and small companies across many sectors.
Moving onto gross profit trajectory on things.
Gross profit before the impact of consumer incentive shows a steady increase over the past two years accelerating by 14 defense need over year in Q3, three 1 million or an EBIT margin ex with vantage ncnb increase of 14% from <unk> 21 from 13% in Q3 'twenty.
408 basis points stay Bob Thank you.
2019, we made the decision to any bank some of these monetization gains into our price competitiveness.
Increasing consumer incentive to stay then a half million dollars in Q3 $21 million to $2 million in Q3.
I would point out here that the Q3 'twenty level, whereas there might be.
And we're down to 60% compared to 2019.
Results gross profit, which is net of consumer incentives.
<unk> by 6% from $27 $1 million in Q2.
20 to $25 $5 million and <unk> 21, which is 21% higher. Thank you see 19. Similarly gross profit as a percentage of dnb decreased from 12% in Q3 22, 11%.
The one remaining 346 basis points above the margin level of 2009.
Moving on to call on page 20.
While we are in a phase of expense.
An increase in Beckman.
Maintaining strong discipline and you can see that we continue generating.
Fixed efficiency on a volume unit sensors with.
Fulfillment expense increased by 13% year over year, while orders accelerated by 28% over the same period.
And while our orders in 2021 or 22% higher than in 2019, our fulfillment expense in fiscal 'twenty, one with 5% lower than in Q2 nine.
With a significant step up in those expectations.
Moving onto sales and advertising costs through 'twenty one.
Seven advertising expense reached $24 million in Q3 three one.
228% year over year, and up 57% compared to 2009.
We think that the space of marketing investments in June 'twenty, one and maintained a similar level of marquee marketing investments throughout Q3, three one on the back of 18 months of reduced marketing expense.
The increase in marketing investments with implemented across marketing channels with 60% of the increase and the data to online performance marketing across the full consumer during the final the remaining 40% was allocated to offline media and video advertising, which were largely great.
In 2020.
And you can see the split of OE sales and advertising expense in Q2 'twenty one.
Largely in line with that of 2019, albeit with a slight reduction in the share of satcom.
I now would like to give you a bit more color on the nature of our marketing investments and activities. We did Q illustration from Q3 'twenty one on page 22.
We consider consumer incentives and marketing investment.
And thats, because price and shipping adjustments are key to support consumer acquisition and loyalty.
Thank you would see 'twenty, one we deployed our newly launched AI powered CRM growth across.
Across geographies.
This tool allows us to target specific customer cohorts with tailored incentive based on their purchase history and youre going to stay.
Above the line marketing E radio TV and out of home advertising with very limited in 2020 and at the beginning of Q1, we're now ramping up investments in this channel with dedicated brand building and awareness campaigns our out of home campaigns are aimed at increasing our awareness.
<unk> is strategic geographical areas, which are still under penetrated.
Below the line and online performance marketing continues to account for the largest share of our marketing investments.
As we increase our investments in online marketing channels, we constantly seek to optimize the efficiency of these investments and Facebook marketing. For example, we have moved to a fully signed it approach.
Going beyond the bottom of the finals guarantee funds add into brand awareness campaign to broaden our audience reach and drive new user adoption to increase the efficiency of our investments our data science team are working very closely with Facebook to enhance campaign structure and brand.
Thank you.
<unk> Agricole, uplifts, App installs and constantly.
Unfortunately that we are building a leading networking Africa.
<unk> or.
<unk>.
In September alone our network counted over 260, <unk> Kols across Africa in.
In Q3, 'twenty, one we rolled out a proprietary kols management platform that allows us to acquire manage and compensates kols in a fully automated manner.
Turning to technology and G&A expenses on page 25.
Technology is another area of increased investment with technology and content expense, reaching nine $4 million up 27% year over year, and 21% compared to 2019.
That is the backbone of our platform and we are increasing investments in this area to build more products and features to enhance user experience and engagements on our platform.
General and administrative expense, excluding SBC reached $25 $2 million up 10% year over year.
This was mostly due to an uptick in staff costs as we strengthened the management bench in selected areas of the business to support the growth.
G&A costs.
Excluding SBC in 2021 remained 11% lower compared to the levels in 2019, as we maintained cost discipline in this area.
Moving to adjusted EBITDA loss on page 24.
We have clear objectives of usage growth acceleration and Juliet Bay development in our capital allocation reflects that adjusted EBITDA loss reached $52 $5 million in fiscal 'twenty one.
$27 million in Q3, 'twenty as a result of increased growth investments in the form of consumer incentives.
Guiding and technology investments.
Let's now turn to balance sheet and cash flow items page 25.
We are increasing our growth investments and an asset light manner, leveraging specific benefits of our operating model Capex in Q2, 'twenty, one with zero point $8 million as the upgrades in the energy sector as a platform with very limited capex requirements net change in working capital because it resulted in.
An inflow of $7 $1 million in Q2 'twenty one.
This was mainly a result of an increase in payables related to the uptick in third party activity as well as the short term receivable cycle.
Cash utilization for the quarter.
Cash used in operating and investing activities.
Leading investments in financial assets was $47 $6 million in 2021 supported by the working capital inflow during the quarter.
At the end of September 21, we had a liquidity position of $584 million comprised of $185 million of cash and cash equivalents and $399 million of financial assets.
With that I'll hand over to Sasha for concluding remarks.
Thank you guys. Thank you.
Thanks, Jeremy.
I think in Q3.
You can see that in March the beginning of.
Our phase of scaling the platform.
And by getting the platform I mean again accelerating using co developing junior Fray diversifying monetization all this to drive robust possibility and we're leveraging of course, the strong fundamentals and the strong unit economics and efficiency gains that we have achieved over the past two years.
I think if we look at our results.
The growth we've got record order number for 28% year over year with record quarterly active consumers was got CMV growing so we're pleased with that.
I think on developing gene therapy, we see growth 16% growth on volume.
Our value selling 34% and volume also the first transaction of platforms in Egypt, So very pleased with that.
On diversifying monetization efforts.
Efforts on demand logistic sorry.
Starting to be meaningful and we reached the 1 million Mark So I think the strategy is well underway.
And we have put more capital to work during the quarter.
With good signs I would say is <unk>.
Acceleration of joint pain and diversifying.
Monetization.
This vast untapped market opportunity both on the e-commerce and payment France and.
In this context, we really want to establish <unk> as the go to destination for consumers and we want to develop jeanette paying to a payment and Fintech champion.
Continents over the next two quarters building. Upon this momentum we intend to continue further accelerated the pace of usage growth accelerating orders consumers driving further CMV infection.
And to fuel this growth, we will continue stepping up our consumer adoption and technology investments in the near term of course, we may see some fluctuation in unit economics, as we ramp up the investments that we ultimately expect.
The usage growth and the diversification of our monetization streams will support them, we're very confident that achieving scale through growth acceleration juniper development and monetization.
It might be to take the business to breakeven.
We do this of course, maintaining a disciplined approach to cost into capital allocation.
Very much for your attention and we are now ready to take your questions.
Certainly the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time, we ask that while posing your question. Please pickup your handset of lifting on speaker phone to provide optimum sound quality. Please hold a moment, while we poll for questions.
Your first question is coming from Aaron Kessler with Raymond James Please pose your question.
Great. Thanks, guys. A couple of questions first suddenly increased level of marketing can you talk a little bit about the.
Quality of the customers Youre getting.
There's always concern with some of the incentives that maybe these are more sort of lip customers.
And then how long are you planning on kind of what this increased level of marketing spend.
Just to kind of analyze some other data after this or do you think.
Will sustain for several quarters that the employees can kind of.
Economics to drive.
Overall profitability. Thank you.
Thanks very much.
So those two impacts here I think on the.
On the strategy in terms of marketing, we're definitely investing across the full spectrum.
The consumer journey right, we're investing at the very top of the funnel and brand awareness education.
We're investing into consideration we're investing into conversion, we're investing into loyalty so very much across the spectrum because as we know that we have.
A large number of consumers who are yet to start transacting online and so we're really investing across the full spectrum.
Certainly we review to optimize the consumer lifetime value right.
Consumer incentives are part of that.
<unk>.
The share of the consumer incentive over the top the total marketing dollars that we invest we thinking.
Reasonable and.
And suddenly we invest all consumer incentives with our consumer lifetime value in mind and I agree with you that there will always be.
Youll seekers and quality of customers, who may not be as good as others, but over time, we are optimizing based on <unk> and our ultimate goal is to open.
Very loyal customers, who are repeat customers and consumer incentives I think are a good way to drive conversion or sometimes to drive certain behaviors.
For example to help consumers discover new category or as we have done in the past to help them.
Overcome.
The premium pay for example, we give discounts for consumers to transact on Julien.
So we see the consumer incentive is very strategic and as part of driving the right consumer lifetime value and not necessarily.
As tactical.
Now in terms of level.
Certainly we want to continue to invest and to and to continue to invest more I think with me. Once you see is increased efficiency with time right. So certainly the question will be about how fast can we improve the efficiency of those marketing investments of your screen.
And what I said, a lot of those marketing investments for the long term right brand awareness consideration and.
We want to see the marketing efficiency improve over time.
And as we see that we would be very comfortable continuing to increase the absolute dollars that we're investing in marketing, but I think that makes sense. So.
We will have to navigate based on how the efficiency holding.
And as the efficiency holds we will allocate more dollars right. So I think it is in the equation here.
We are solving for and that over time, what I can say is that we want to increase the absolute dollars that we invest.
And we want to see also the efficiency increasing right again over time, it may or may not be the case exactly one quarter to the other but over time, we want to do those two things.
Got it great and a quick follow up for the incentives can you just stay where you're recognizing those does that contra revenues Cogs sales and marketing and then it.
It looks like we saw a decline in third party revenues, that's going to increase from first party revenues actually what I was kind of an intentional shift maybe more.
Moving goods.
<unk>.
Yes. So there they are accounted for as a minus of revenues and mainly minus and the buckets of commissions and in the buckets.
Shipping right. So that's where they are accounted for as a minus of that and.
This is why we are presenting here in this presentation, if you aggregate before and after consumer incentives so that.
Comparisons can be made within the quarters from last year and the year before.
And.
And.
Sure.
What was your second question around sorry, Yes, I mean, I think that was related to that so if you add that got it and then you would've grown third party revenues in aggregate, yes, exactly because that's why we presented on this page the commission before and after consumer incentives and you can see that.
And without the consumer incentive commissions are growing by 18% after they're declining by 21% right. So we consider those to be as part of our efforts to drive consumer education consumer adoption and so that's why we represent both Josh.
Okay, great. Thank you.
Okay.
Your next question is coming from Lamont Williams at Stifel. Please pose your question.
Alright, Thanks for taking my question.
Can you talk a little bit.
In the letter about.
Doing more wonky in the grocery category.
Is this more just to get.
More skus in the category, how you're thinking about long term.
The one key question and the category is this something you'll need to do or will you kind of shift back to a more marketplace.
Hugh.
It's a good question I think we're doing this on grocery, especially because of the complexity for the big banks and the big suppliers to operate.
Marketplace business that theyre, not really used to right.
<unk> players in our markets.
They don't operate the DTC business, but they don't do drop shipping and they don't they're not geared for that right. When they want us to sell through distributors, who are then distributed to consumers and recognizing this recognizing also that we have the knowledge and the capability to operate the <unk> business because of it.
Always operate to the <unk> business, we have the systems the processes the capabilities.
And on.
The standard procedures to operate one Pete we're deciding right now that we want to operate.
It's part of the grocery on lumpy.
And thats the rates that would say that's a great strength and that's a great advantage, because we are able to accelerate even faster.
And adapting to the.
The operating model is that the big brands Big distributors are used to and for US as always we see <unk> is something that we and we do and we know how to do it. So it's not really a problem.
I don't know if in the future. This one most of the marketplace are no we'll see maybe we'll maybe.
At the end of the day, we think that generally neutral on a gross profit basis, because the margin that we make on a lumpy.
On the wood correspondent.
More or less to the commission that we would take into the type of revenue that we would make on our marketplace basis, So I think financial indices.
Something that we're prepared to do and that really makes sense for us to drive the growth of the category.
Okay.
I just have a question.
With holiday coming up.
It looks like.
The promotional environment is demo.
A little earlier, but can you just talk about how you're thinking about holiday and maybe.
Some of the trends Youre seeing.
Post quarter.
If again.
Well.
I'm not sure I get the first part of the question, but may come the promotions and incentives for us again.
Something that we are driving in a strategic way. So again led the example of the offering a discount for consumers to obtain the GMP.
Right or for example, Duane free shipping on the certain size of best guess for grocery items right. So we're using those incentives to drive consumers towards the categories of product and towards the type of payment methods.
That we think really makes sense, it's really the objective of that and Thats for us completing part of the of the consumer adoption and the CRB consumer lifetime value strategy.
<unk>.
It's very integrated into into lead to everything that we do into our plan and strategically.
And then of course.
Our intention I think we're pleased with the with the use age.
That we are seeing in the recent acceleration, but our intention is certainly to continue that right in the end.
We want to scale the platform and accelerate the growth rate so that certainly in the pension and that's certainly something that we hope to see.
In Q4 and in the quarters to come right. So again, good numbers, but we don't want to stop here and the intention is to grow faster than this.
Okay. Thank you.
Your next question is coming from Joshua <unk> with <unk> capital. Please pose your question.
Hi, Thank you so much and congrats to everybody on the inflection quarter and the acceleration of the growth.
My question is two fold first of all maybe you can give us some color on how the end of the quarter kind of trended relative to the beginning of the quarter. So knowing that you started to send the sales and marketing towards the end of Q2 the growth rate continue to kind of pick up through Q3, and any kind of color that you can give us an exit growth rate for <unk>.
Q3, or some kind of expectation for what we can roughly you expect in terms of the further acceleration for Q4, it would be really helpful. Thanks.
Now of course, just thanks for asking the question.
I think maybe I will just go back to what I, just said, which is like at the end of the day.
We are engaging that phase, where it's about scaling the platform, which is accelerating is equal to net pay and diversification of monetization and we are not going to stop where we are now and the intention is to accelerate even further and we're very confident that this will happen.
Awesome and were you seeing that acceleration continue to kind of pick up as we left the third quarter and now as we move into the fourth quarter as the acceleration growth rate increasing now.
Well, let's see.
Something that we will disclose because I think there's there can always be some year on year effect in August and September and so on and so forth, but I think we will.
I'll have to see how Q4 is playing out but again, we're very confident about accelerating the acceleration.
I love to hear it and one more question, maybe we could just dive into a bit further kind of youre barrier to entry in Africa, and your position relative to anybody else that could be E. Commerce in Africa, I mean, it seems like.
You have a leading market position.
How do we all kind of understand how that barrier to entry kind of really stands and what the competitive landscape in Africa is and then how dominant Julia it really isn't that landscape.
Yes, Thanks for the question, Josh and vast question I think.
To start with the barrier to entry and what it takes to be successful in those markets and stepping back a bit on what how what does it take for ecommerce to be able to operate at scale and providing great customer experience in Africa.
A number of components behind behind that which are extremely hard through two to create and to therefore to replicate right. So if you think about the branch that is needed in the market, where consumers have never or almost never transacted online the amount of brand equity that you need to create.
<unk> to be able to trust for users to transact for the first time online is something that takes time and the money a lot of efforts and a lot of localization and the strength of the Giulia brand.
He is very big.
Sometimes some investors theyre looking at the operating than App rankings, and you'll always see Giulia on one of the biggest downloads of the apps everywhere and that is something that takes years and in the middle of effort to drive I think obviously.
The supply right to be able to bring the right products to the consumers and to work with.
Brands local sellers international sellers local brands international brands it.
Takes a great deal of time fix.
Great deal of investment to build the right marketplace platform to be to be able to write <unk> capabilities and to be able to do that at scale right. We have 100000.
Joining us from the biggest.
Distributors and the biggest brands for them, we have a cross border program for international sellers to sell in Africa, and we work also with small sellers, who are very relevant because they are very local assortments and theyre very agile and all of us.
Ability to bring the marketplace and the <unk> together and the small cell there isn't the big sellers in the plan and the non branded in the local and international is what at the end of the day run on us for the consumers and of course that relevant in terms of choice.
But also the relevance in terms of price because of those sellers are competing so the second aspect of the supply.
The third and I'm, just one excuse me is the logistics, which.
It is not easy in Africa to create the logistic platform that can ship packages across all the areas of the country and as fast as one hour or even 20 minutes in the case of <unk> fluid.
<unk>.
That is something that we have created over the last years, which is obviously a huge assets you can see in our fulfillment expense they keep going down it's a very efficient system and.
It's not just me, saying it now we have third party sellers were coming to use it and we crossed $1 million of revenue from third party merchants, we're tuning Julian logistic and other tooling it over other players to do logistics services right. So that's a great testimony of the efficiency as well and I think you're a lot more to come.
And maybe.
Maybe last but not least of course payments.
Being able to operate cash on BD really because we are steering very cash oriented countries kind of oriented economy, and complementing that with Unionpay is.
Obviously very difficult to reproduce for players who are not necessarily familiar with that and I think doing this at scale in multiple countries.
It's something that I think takes a lot of passion a lot of skills time energy and money to do and create and Thats. What we have done so I think it puts us in a pretty good position.
No I would agree and I guess that we're confident of the accelerating momentum here at GSV growth is something that can continue into 2022 is that right.
Right.
Okay excellent. Thank you so much for taking time.
Of course.
Once again, if there are any remaining questions or comments. Please press star one on your phone at this time. Please hold one moment multi poll for any additional questions.
We did have one.
Final question from Sara with Albert Please pose your question.
Yes, hi, thanks for taking my questions I forgot already pressed the button, but anyway.
Can you actually.
Can you just remind us of what products go into digital orders.
I seem to recall that a couple of quarters ago.
Back on that so can you just talk a bit about.
What's changed.
And then on the ship to grow three one key.
I was on a call with another company doing one key grocery.
This morning, and they're obviously.
Incurring significant upfront costs in terms of establishing.
Dark stores and stuff, which I assume is what youll have to do as well. So can you just.
How we should think about factoring the shift of grocery <unk> into our forecast. Thanks.
And saw a very good questions.
What goes into digital orders in financial services is pretty much everything that is happening.
<unk>, which is called junior paying and that users use too.
Process, a number of digital payments and.
Access financial services, and so on and so forth.
So it's pretty.
Per year from that perspective, but those are all of those services.
<unk> recorded a diesel holders and.
And I think a few quarters ago one of the.
The actions that we took was to.
Kind of moving a little bit away from.
The micro transactions.
Digital orders right through those micro transactions.
I mean by that is the recharge of airtime for example.
<unk>, which is a classic one in a classic strategy with those some of those services to attract for example to consumers with.
With a discount or with a cashback on buying some airtime for a very small amount.
And.
And then targeting the consumers and making sure that the consumers over time, we will look into it.
Consumer that uses the app for other things right. So I think those the micro transaction is the traditional way I would say to attract consumers and I would say back into the base. We had less services than we have today price of today, we have literally hundreds of different services consumers can look at.
Bus tickets for example on the App. They can buy movie theater tickets. They can pay their university fees. They can pay you can pay your your clients for example, if you do.
Each of the final parking fine for example in some countries you can pay them on the App and so on so forth right. So as we have a lot more services.
I mean, we have less need to to attract her to recruit users with those micro transactions. So I think thats whats changed when we added a lot more services and as a result, we are able to do less of those micro transaction.
Which are not unattractive, they're good and they're on.
Active NDA drug use age to be clear, it's very even the best consumers were doing all of the other services that I do we also want them to use to pay to reach out there anytime so there's nothing against those transactions, but we did less of that right. So that's something that changed I think you are referring to that.
The one thing groceries.
Interesting because we see a lot of food delivery focused players.
Moving into that.
And then.
For us when you think about our stores. For example, you mentioned that the dark store as a small warehouse.
And to operate the dark store you need to be able to operate a small well, which means that you need to have the capability to do that you need to have the keeping EPS to do.
Storage pick and pack and inventory management and logistics right.
And logistics in the sense that the warehouse logistics, which is something that we have been doing forever since day, one right. Since when we started doing the first thing we did pretty much was too.
Rental warehouse and so doing that for sort of surging express and so on so.
Yes.
Our store is nothing else than a small warehouse and we have already.
Doesn't the warehouses so for us.
As an extension of what we already do.
Of course, there may be some investments here and some investment there that will go into our G&A, probably and maybe you see already some of that but it's not something that we.
<unk>.
We have not done before and Thats something that we foresee will have the financial impact and we already have those warehouses significantly in pretty much all the big urban areas and we're going to.
Operating goes those closely.
Quick delivery dark stores type, maybe there will be dedicated warehouses, maybe will do part inside the warehouses that we have so for us it's it's.
It's very much a continued view of what we do.
Okay. That's helpful. Thanks.
There appear to be no further questions in queue. At this time I would like to turn the floor back over to Sasha for any closing remarks.
Great. Thank you very much for attending as always and I repeat.
Every time at the end of the call that we remain available to to discuss and exchange.
And so doing that so as you think to reach out and I hope everyone is staying safe take care and restructuring. Thank you alright.
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.
Okay.