With the potential for the adoption of online shopping, analysts are optimistic about Jumia Technologies Inc.’s future and have found positive tailwinds for growth. While eCommerce penetration is approximately 20 percent for China, it is reportedly much lower in Africa at only roughly 0.5 percent in the region, Marketwatch reported.
Raymond James Analyst Aaron Kessler said, according to the outlet, “While early, we believe a number of factors should drive strong eCommerce growth in Africa going forward, including a growing middle class, a fast-growing young population more digitally inclined, increasing urbanization, and increasing smartphone adoption.”
The company refers to itself as Nigeria’s top eCommerce site. And it counted 4 million active shoppers and 81,000 active sellers as of the end of last year. In addition, the company has Jumia One as well as JumiaPay for payments and online transactions.
The news comes after it was reported in April that shares for the company, which is often called the Amazon of Africa, skyrocketed some 54 percent. The company, which was founded in 2012, became the first African unicorn startup following a $326 million funding round that included AXA, MTN and Goldman Sachs. It filed for an initial public offering (IPO) on the New York Stock Exchange in March.
Jumia operates in 14 African countries, including Kenya, Ivory Coast, Ghana, Morocco and Egypt. The company’s brands encompass travel booking service Jumia Flights, online takeout service Jumia Food and classified services Jumia Deals. Its data indicates the company processed more than 13 million packages last year.
Jumia’s New York Stock Exchange debut comes amid a growing mobile payment and eCommerce landscape in the second largest continent on the globe by both population and area. More consumers there are moving in a middle class. At the same time, technology has leapfrogged into the mobile realm — providing consumers with more efficient ways to not just move money but spend their disposable income as well.