Jumia Technologies is a pan-African e-commerce company. Did you know it, chances are you didn’t
The platform is a sort of African Amazon that connects sellers with consumers in countries where connectivity is in a slow process of advancement.
Very slow. Almost nothing.
In addition, it has its own logistics service that delivers packages and a payment service that facilitates transactions between participants.
The company has a presence in Nigeria, Egypt, Morocco, Kenya, Tunisia, Ghana, Senegal, Uganda, Egypt, and Tanzania, among others. It also reaches out to connect people in South Africa, Portugal, France, and Germany.
After a disastrous end to 2019, in which its shares fell off the cliff (from over $40 each to less than $3), Jumia seems to be reacting. For many on Wall Street, it’s a great time to buy a place in that boat. Saving distances, for many investing in Jumia Technologies stock, resembles the possibility of owning a time machine that would allow them to go back to the dot-com boom and invest in Jeff Bezos’ company.
In a few days, its papers grew more than 30 percent and are approaching $8, almost double what they were a month ago.
A very interesting fact is that the traded volume grew exponentially: from an average of 2.57 million per day, it went to 21.5 million this Wednesday.
Jumia Technologies has an estimated market capitalization of $214.1 million, calculated based on a price of 7.88.
Jumia on the rise and fall
But let’s make history. Until mid-2019, after debuting that April on Wall Street, Jumia’s stock was “flying”
Even in the difficult African eCommerce scenario, where low connectivity and logistics issues do not seem to be a simple market to work with.
However, since August, things gradually became more complicated and the difficulties generated by the lack of infrastructure hit its strategy… and its shares.
In the third quarter of 2019, it had to close operations in some countries, which further complicated things.
Jumia Technologies is the most important player in African eCommerce with almost 4.5 million active users. Its parallel products, such as Jumia Pay, are also leaders.
Economic analysts understand that beyond the growing pains at the end of 2019, the future is promising.
The company relies on a network of rented warehouses that act as pick-up and delivery points in cities where there are few references to the precise location of each household.
An important point for Jumia Technologies is that it has enormous growth potential because, in most of the countries where it has a presence, only 2 percent of retail sales are made through e-commerce. So imagine how far it can go.
For reference: in China, for example, the same figure reaches 25 percent of the country.
Jumia Technologies has important investors, such as Pernod Ricard, which makes Absolut vodka, and which bet on the company with more than $80 million in 2018. Thanks to that, it has a 6 percent stake in the company.
Also Mastercard is in linked to Jumia Technologies and is currently the largest shareholder. Other companies that have shares in Jumia are MTN Group, Rocket, Millicom International Cellular and Goldman Sachs Group.
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