Jumia Technologies’ stock was among the most sought by investors in the technology sector of equity markets in 2020 and is likely to sustain the momentum through 2021 and beyond, research findings have indicated.
According to the research data analyzed and published by Sijoitusrahastot, the company’s share price grew by over 1000% in 2020.
An analysis by Benzinga also indicated that 74% of the investors and traders, who participated in the study believes that Jumia’s share price will soar to $100 by the end of 2022.
Despite the impressive performance of the stock in the global technology share deals, Jumia’s revenue dipped by 12% YoY in Q1 to Q3 2020, before recovering in the last quarter of the year
A research firm, Ovum, forecasts that mobile internet penetration would rise from 32% in 2017 to 73% by 2023.
But then, due to the pandemic, key markets such as South Africa and Nigeria went into recession.
For instance, Fitch Ratings showed that South Africa’s GDP sank by 7.3% in 2020 and Nigeria by 3%. The two markets account for over 40% of Jumia’s total economic output.
The eCommerce entity also saw its gross merchandise volume (GMV) contract by 11% in Q1 2020, 13% in Q2 2020 and 28% in Q3 2020 with its revenue slumping by 7% in Q1 2020, 10% in Q2 2020 and 18% in Q3 2020.
According to figures on the company’s financials in 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. But then, its active annual customers rose by 23% to 6.7 million.
This is even as 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 e-Commerce frontliner’s performance since it offers a digital wallet on a continent where two-thirds of adults are unbanked.