Jumia, which became the first African company to list on the New York Stock Exchange (NYSE) in April 2019, has seen its share price drop by almost 70% since.
Prior to its IPO, the e-Commerce platform had garnered over $760 million from prominent investors such as Blakeney Management, Goldman Sachs, the MTN Group, and Rocket Internet. It went public with an initial share price of $14.50 on the New York Stock Exchange, but the company’s stock currently trades at approximately $4 per share.
According to a recent analysis, in the third quarter of 2022, Jumia reported an operating loss of $43.2 million despite recording 9.4 million orders valued at $66.6 million. In that quarter, Jumia’s total active users increased by 3.5% year on year, while the number of orders surged by almost 11%.
Jumia had only 3.1 million active customers in multiple countries as of Q3 2022
You cannot be profitable in mass market e-commerce with only 3 million customers across different countries… It’s like trying to have a profitable restaurant with three guests per day. pic.twitter.com/heZcWMrOeN
— BitKE (@BitcoinKE) March 10, 2023
“They cover multiple countries with over 600 million people but only had 3.1 million active customers as of Q3 2022, up from 3 million a year ago,” an analyst said. “This is not sufficient and can hardly be called traction.”
Often seen as the Amazon of Africa, Jumia has struggled for more success after launching in Lagos, Nigeria, in 2012 and expanding to 14 African countries by 2018.
Part of their earlier success included generating $234 million in revenue in 2015, a 265% growth from 2014, and becoming the continent’s first unicorn valued at over $1 billion in 2016. However the company struggled to replicate its early success post – IPO, and has recently been dogged by critical challenges.
In November 2022, the company’s shares dropped 14% following the New York Stock Exchange (NYSE) news that Co-Founders, Sacha Poignonnec and Jeremy Hodara, were leaving the company.
A month after the two leaders quit, the company, under new CEO, Francis Dufa,y stopped Jumia Prime, which was a subscription-based loyalty program similar to Amazon Prime, and offered unlimited free delivery for $7 per month.
The program, which had expanded from Nigeria to Egypt, Kenya, Morocco, Côte d’Ivoire, Ghana, Uganda, Tunisia, and Senegal was deemed ‘not suitable to the current operating environment’ and did not support the company’s ‘path to profitability’ a senior official said.
Jumia’s struggles are coming at a time when industry leader, Amazon, is in the midst of plans to expand into South Africa and Nigeria, originally scheduled for February and April 2023, respectively.
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