Jumia Technologies\u2019 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 analyzed and published by Sijoitusrahastot, its share price grew by more than 1,000% in 2020.<\/p>\n\n\n\n
Shares of the German company started the year priced as low as $2.15 and its market value was a few hundred million. By the end of 2020, the price had risen to $59 and the market capitalization to $4.62 billion as a result of a growth explosion occasioned by the pandemic.<\/p>\n\n\n\n
In December 2020 alone, the stock increased by 25.4%. Its year-to-date (YTD) growth as of January 29, 2021 was an impressive 47.18%.<\/p>\n\n\n\n
Jumia seeks to be Africa\u2019s answer to Amazon as it attempts to get within Africa the level of penetration that the FAANG giant has achieved. It provides eCommerce services in 11 countries on the continent.<\/p>\n\n\n\n
According to an analysis carried out by Benzinga, 74% of the investors and traders who participated in the study think that Jumia\u2019s share price will soar to $100 by the end of 2022.<\/p>\n\n\n\n
Jumia, which went public in April 2020, believes that mobile internet penetration and economic expansion will drive its long-term growth in Africa. At the time it went public, the IMF had projected a GDP growth rate of 5.9% for Africa between 2018 and 2023. According to research firm Ovum, mobile internet penetration was expected to rise from 32% in 2017 to 73% by 2023.<\/p>\n\n\n\n
However, as a result of the pandemic, a number of Jumia\u2019s key markets, including South Africa and Nigeria, went into a deep recession in 2020.<\/p>\n\n\n\n
Based on a study by Fitch Ratings, South Africa\u2019s economy was estimated to contract by 7.3% while Nigeria\u2019s was forecast to fall by 3%. The two markets cumulatively account for more than 40% ($799 billion) of Jumia\u2019s economic output across all markets. Though other markets such as Egypt, Kenya and Ghana had modest growth during the year, this would not offset the decline in key markets.<\/p>\n\n\n\n
The impact of the economic downturn was seen on the eCommerce platform\u2019s performance during the year. Its gross merchandise volume (GMV), which had contracted by 3% in fiscal year 2019, sank by 11% in Q1 2020. In Q2 2020, the decline accelerated to 13% and reached 28% in Q3 2020.<\/p>\n\n\n\n
The company\u2019s revenue had grown by 24% in fiscal year 2019, but declined by 7% in Q1 2020, 10% in Q2 and 18% in Q3 2020.<\/p>\n\n\n\n