Based in Germany, Jumia (JMIA) is the top e-commerce platform in Africa. Even though the stock has declined over the past few months, let’s find out if this is the right time to buy the stock to capitalize on Africa’s potentially vast but relatively untapped e-commerce market.Known as the ‘Amazon (NASDAQ:AMZN) of Africa,’ Jumia Technologies AG’s (JMIA) stock hit a $69.89 all-time high on February 10, but it has lost 56.4 % over the past three months and 27.9% over the past month. It witnessed a decline in March due to a broader market rotation out of expensive growth stocks. However, the Germany-based company completed an ’at the market’ offering on March 30, which generated $348.6 million in gross proceeds. JMIA plans to use the funds for general corporate purposes.
The company’s revenue declined in the fourth quarter (ended December 31, 2020) even though more than 1.5 billion consumers visited its page during a Black Friday event held in November 2020. It had also partnered with established companies including Standard Chartered (OTC:SCBFF) and Samsung (KS:005930), but this has not helped it generate significant revenues.
Given volatile markets in Africa currently, we think JMIA might need a significant time to recover its revenues.