Jumia Technologies’ stock was among the hottest in the tech sector in 2020 and is likely to carry the momentum through 2021 and beyond. According to the research data analysed and published by Sijoitusrahastot, its share price grew by over 1000% in 2020.
Based on an analysis by Benzinga, 74% of the investors and traders who participated in the study think that Jumia’s share price will soar to $100 by the end of 2022.
Jumia’s Revenue Sank by 12% YoY in Q1 to Q3 2020
According to research firm Ovum, mobile internet penetration was expected to rise from 32% in 2017 to 73% by 2023. However, due to the pandemic, key markets such as South Africa and Nigeria went into recession. Fitch Ratings revealed that South Africa’s GDP sank by 7.3% in 2020 and Nigeria by 3%. These two markets account for over 40% of Jumia’s total economic output.
The eCommerce platform saw its gross merchandise volume (GMV) contract by 11% in Q1 2020, 13% in Q2 2020 and 28% in Q3 2020. Its revenue slumped by 7% in Q1 2020, 10% in Q2 2020 and 18% in Q3 2020.
In the first nine months of 2020, Jumia’s revenue fell by 12% as a result of a 47.2% decline in first-party sales. On the bright side though, active annual customers rose by 23% to 6.7 million. Orders shot up by 9% to 19.8 million while the number of transactions increased by 34%, raising total payment volume by 74% to €137 million.
In the countries where Jumia operates, the internet penetration rate is below 3%, presenting an opportunity for growth. However, Africa has an average internet usage rate of only 39.3% compared to the global 59%. Jumia Pay could boost its performance since it offers a digital wallet on a continent where two-thirds of adults are unbanked.