Jumia, Africa’s largest online e-commerce platform has seen its share price decline by a whopping 48% in the last 6 months. For investors who bought the stock about a month ago, the stock is down 26%.
Before the recent slide, Jumia has been one of the best-performing stocks and is still up by 142.44% Year on Year (YoY), a significant return for those who bought this time last year.
Other E-commerce businesses like Amazon has managed to improve its performance despite the effects of the pandemic. Its share price is up 10.44% Year-to-Date (YtD), currently trading at $3,519.28 as of the time of writing this report. Its financial statement also looks good as its net profit appreciated 12.25% compared to Q4, 2020.
eBay’s share price is also doing great as it is up 32.46% YtD, currently trading at $68.22 on the NASDAQ exchange, as of the time of writing this report. Its gains are a result of improved Q1 performance with its net income up by 45% compared to Q1, 2020.
Although one could say the performance of Jumia is poor compared to these other companies but it clearly shows that the African market is a tough market to crack due to inadequate infrastructure leading to technological deficiency. This poses a problem for Jumia as their entire business model depends heavily on technology.
As stated earlier, Jumia announced in March that it would be selling 9 million American depositary shares (ADS). So far in the last 6 months, the company has managed to raise $570 million to boost its operating activities on the continent. It has also expanded its network of pick-up stations for increased convenience and has over 1,600 pick-up stations across Africa with 23% of packages delivered in pick-up stations in the first quarter of 2021.
Jumia is currently trading at $22.30, down 0.84% for the day as of the time of writing this report.
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