Up 150% in 2024, Jumia Rally Raises Share Price to $8.50

Shares of African e-commerce giant Jumia (JMIA) rose to $8.67 on Monday, June 10, continuing an unexpected rally that began with positive reactions to its first quarter 2024 results. This is the company’s highest share price of 2024, after started the year at a price of $3.36.

While he’s wary of the unicorn’s valuation – it has a market capitalization of $872 million – it’s a huge improvement over where it was at the start of the year.

In the first quarter of 2024, it reduced losses by 70% by lowering advertising and sales costs, even though revenues increased by 18.5%. Jumia has long struggled to cut costs, even though it has often talked about the need to ensure profitability.

Investors reacted positively to these results, achieved despite rising inflation and currency devaluations in some of Jumia’s largest markets. Considering that some fast-moving consumer goods (FMCG) companies in markets such as Nigeria, for example, reported losses last year, this result was doubly impressive.

CEO Francis Dufay has been highly popular with shareholders since his appointment in 2023. He engineered a major change to the company’s business model and admitted its economics were unsustainable.

He shut down Jumia Food, a loss-making industry, relocated management from the UAE to Jumia’s active markets, and made the right decisions to get the company back on the path to growth.

Part of this growth was the launch of a 30,000 m2 integrated warehouse in Lagos, which aims to improve logistics capabilities and shorten delivery times.

As the company looks to work together for growth, it will be aware that Amazon has started operations in South Africa and may well have projects in other African markets.

Jumia had an initial public offering in 2019 and was listed on the New York Stock Exchange (NYSE) at $14.50 per share. Five years later, initial excitement for the company had faded as the stock price suffered and profitability remained elusive.

But in an often unforgiving market, Jumia insists it will survive and thrive. Will Dufay finally be the man to do it?

Get Africa’s best tech newsletters delivered to your inbox