JUMIA

Analysis of Jumia share price

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Through this article which is entirely dedicated to the Jumia Technology Company and its shares we offer you the opportunity to learn more about this asset and the issuing company. In fact, to assist you with the preparation of comprehensive analyses of this share’s trends we will examine the activities of this company and its principal sources of income as well as provide information on its major competitors on the market and examples of some recent strategic partnerships implemented by this company. We will also examine in detail the factors you should take into account for a fundamental analysis of Jumia’s share price.

Elements that can influence the price of this asset:

Analysis N°1

We would suggest that you particularly monitor the international expansion strategy conducted by Jumia with the aim of expanding its presence in other countries. The group notably targets certain African countries. It should in fact be remembered that the Jumia Group currently markets its products and services in 13 of the 54 African countries.

Analysis N°2

In the same way, it is also recommended to monitor partnerships and commercial alliances that Jumia may implement with strategic partners with the objective of lowering its costs or in order to facilitate the supply of its products at a lesser cost.

Analysis N°3

The general boom in the online sales sector also has an impact on the Jumia group’s activities. This notably concerns the security implemented on the company’s websites and is aimed at reassuring possible consumers that are still reticent concerning this type of purchase.

Analysis N°4

It is of course also important to take into account here the high competition in this activity sector. We would also particularly note the online competition which is more direct, as well as the competition from local companies with ‘bricks and mortar’ shops.

Analysis N°5

The protection of the sites operated by the Jumia Group, particularly against hacker attacks is also a significant point of consideration regarding certain investors which have indicated certain weak points in the system. We would therefore closely follow any operations implemented by the group to solve these problems.

Analysis N°6

Finally, you should also pay careful attention to the results published by the Jumia Group, notably the annual and quarterly financial results. These results should be systematically compared to the analysts forecasts and the objectives fixed by the Jumia Group.

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General presentation of Jumia

To go further and enable you to better identify the future challenges of the Jumia Technology Company, we will now provide a detailed presentation of this company and its activities as well as its sources of income.

The group Jumia Technologies AG is a German company that is specialised in the e-commerce activity sector.

More precisely, this company operates an online marketplace that enables African consumers to buy and sell merchandise. Through its online sales platform, the Jumia brand sells various products including dresses, leggings, skirts, tops and polo shirts, belts, watches, sunglasses, health products, and beauty products as well as a whole range of children’s products and accessories.

At present, the Jumia Company employs nearly 4,170 people around the world, the majority of which are in Germany.

Analysis of Jumia share price
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The major competitors of Jumia

To successfully complete your analysis of the Jumia share price you will also need to know about its activity sector and the major competitors in this sector. We therefore now offer you the opportunity to learn more about this company’s principal adversaries as follows:

DHL

Firstly, DHL is a company specialised in the transport of parcels and mail, it is owned by the Deutsche Post Group, a direct adversary of Jumia. DHL is in fact one of the largest logistics companies worldwide and operates in over 220 different countries including many on the African continent. It also operates a platform that is directly accessible from Africa.

EBay

Another of Jumia’s major competitors is the eBay Group, an American online brokerage company that sells products through online auctions. This company is probably the best known brand in this sector and a true phenomenon that also offers its African clients the opportunity to purchase fashion items online.

Alibaba

Another serious competitor of Jumia is the Chinese group Alibaba, again specialised in the online sales of a large range of products and which also targets the African continent. Alibaba uses retail and wholesale online sales platforms and generates even higher revenue than that of Amazon.

Amazon

The final major competitor to Jumia is none other than the web giant Amazon, quoted on NASDAQ and part of GAFAM. Previously specialised in the online sale of books Amazon has become a giant in the world of online commerce and sells its various products at distance worldwide in direct competition to those of Jumia.


The major partners of Jumia

Of course, the Jumia Group does not only have adversaries on the markets. It often implements strategic partnerships with other companies and large groups. Here are details on two particular examples:

Carrefour

In 2018 the Jumia Group signed a strategic partnership agreement with the French Carrefour Group. The advantages for the Carrefour Group in this case are clear. This large French company specialised in retail sales can thereby strengthen its presence in Africa and although it already owns and operates certain subsidiaries on the African continent this partnership has enabled it to jump to the next level in terms of size.

Edenred 

Another advantageous partnership implemented by Jumia was with Edenred, a specialist in payment solutions. This partnership was in fact through Jumia’s subsidiary, Jumia Travel, an online hotel reservation portal in Africa. In fact, Jumia Travel chose the payment solutions of Edenred Corporated Payment with the objective of using an instantaneous digital payment solution that was simple and secure for its hotel chain through single use virtual debit cards.

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The factors in favour of a rise in the Jumia share price:

Now that you are familiar with Jumia and its economic and sectoral environment, we propose to take a closer look at its main strengths and weaknesses. It is indeed essential to know the strengths of this company to boost its growth as well as its weaknesses that can hinder its evolution and development.
Let's start our analysis of Jumia's advantages and disadvantages by summarising the main strengths of this company in its market and in relation to the competition:

  • First of all, and thanks to the long history of Jumia's development, the group is today one of the major players in the German industry in Africa. This is due in particular to its very strong and positive brand image in the eyes of the general public.
  • Another strength of this company is that it also focuses on developing its strategies. To do this, it analyses the market thoroughly beforehand and determines its profitability. This enables the company to develop a profitable and sustainable business model.
  • The company's advantages also include innovation, in which it invests a lot of its cash in order to remain at the forefront of technology and to distribute its products in a modern and efficient manner.
  • The marketing strategy implemented by Jumia is also one of its main assets. The group invests heavily in advertising and communication and aims to improve its future sales and success by making consumers aware of the new features of the products it offers.
  • Similarly, Jumia's cost-cutting strategy has the effect of increasing its margins over time and making its stock market share more attractive to various investors, while also remaining a competitive company in its market.
  • Finally, Jumia's last advantage is its positioning among clean and eco-responsible companies thanks to its strategy of reducing its CO2 emissions and the attention it pays to the environment and ecology, which again improves its brand image.
The factors in favour of a drop in the Jumia share price:

While the Jumia Group seems to have many advantages and strengths, it is also important to be aware of its main weaknesses which can be a real hindrance to its growth and cause its share price to fall on the stock market. Here are its main weaknesses:

  • First of all, the group is currently penalised by a weak presence on the international market, which considerably limits its possibilities of growth in the future. However, it is not impossible that its services will become more international in the future.
  • Another weakness of Jumia is the direct competition in its market. Indeed, the group is facing some large opponents whose significant value represents a real threat to its market share, in addition to smaller local competitors.
  • The group is also the target of imitation of its strategies by other players in the sector or in competing sectors, which may also seriously undermine its market share in the years to come.
  • Another weakness of the Jumia Group is the fact that the birth rate is currently declining in Africa. This decline in demographics could have an impact on its sales in the long term and reduce its level of profitability.
  • Finally, the last weak point from which the Jumia group suffers concerns the regulations in force in certain countries, which are an obstacle to its development. Indeed, changes in the policies of different governments regarding Jumia's approach to retailing can represent a major danger to its growth.

As you can see, Jumia has almost as many strengths as weaknesses. But above all, you should use these arguments as part of your fundamental analysis of the stock, looking at each publication and event in the light of the group's ability to cope with or benefit from it.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

In which countries is the Jumia Group implanted and where does it exercise its activities?

The Jumia Group mainly exercises its activities in Africa although the company is actually based in Germany. Through its online sales platform this company operates in Algeria, Morocco, Tunisia, Kenya, Egypt, Uganda, Senegal, Ghana, South Africa and the Ivory Coast. Although the company currently employs nearly 5,000 people directly it actually works with nearly 100,000 more indirectly on the African continent.

Who are the large investors in the Jumia Group?

The Jumia Group was created in 2012 through an investment by Rocket Internet, MTN and Millicom. It raised nearly 300 million Euros in 2016 through MTN, Rocket Internet, AXA, Goldman Sachs, Orange and the CDC Group. In 2018 Pernod Ricard also entered into its capitalisation followed by MasterCard in 2019 which invested nearly 50 million Euros in this company.

How to anticipate the future trends of the Jumia share price?

To be able to best anticipate the future movements in the Jumia share price, you should complete several distinct types of analyses, notably a technical analysis which uses stock market charts of this asset and a fundamental analysis which is based on the study and interpretation of news, events and publications that could impact the company. A comparison between the results of these two analyses will enable you to best interpret the signals obtained for your trend forecast.

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