Address

Precise Investors

Tuesday, December 7, 2021
Latest News

Jumia becomes first African tech firm to list on NYSE

Jumia

It operates a marketplace where thousands of other businesses sell goods

Jumia has become the first Africa-focussed tech firm to list on the New York Stock Exchange.

Its share price rose more than 70% in value on the day but the excitement would prove to be short-lived.

We operate there are 700 million people and last year we served more than four million consumers, co-chief executive officer Sacha Poignonnec told the BBC on the floor of the stock exchange.

By 2030, consumer spending across Africa is expected to reach $2.5tn. Jumia still sells goods in 11 of those countries. It operates a marketplace where thousands of other businesses sell goods on its platform and has a finance arm, Jumia pay, so customers can go about their shopping, pay utility bills and order pizza, all without leaving the Jumia’s platforms.

A mixture of leaving unprofitable markets and a new interest in e-commerce spurred by the pandemic has seen Jumia’s share price return to levels seen on the day of its stock market debut.

Overall, e-commerce on the continent is still very small compared to traditional retail, Mr Hodara says, when asked why the Jumia ride turned out to be so bumpy. It’s a long journey and the opportunity is massive. So, we’re taking it step by step.

While the platform first became known as a place to buy electronics, consumers usually only make these kinds of purchases a few times a year, so the firm is now trying to attract consumers to buy everyday items like groceries and clothing.

Those products generate more profit than the electronics that were purchased before, Mr Hodara says.

We generate almost $1 of profit when we deliver an order after all the logistic costs. What we want to do now is invest more into growth in two areas: tech and marketing. This is the direction we’re taking now that we feel comfortable and confident about the profitability and unit economics of our business, he says.

Mr Hodara says the willingness to face the challenges for e-commerce in Africa early on is what creates the opportunity for Jumia to continue to lead in this space.

The complexity of operating on the continent means we have unique barriers to entry that make it very hard for anyone else to do what we are doing, he says.

Important:

The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply