Jumia’s Shares Plunge as Amazon Announces Nigerian Expansion

Jumia’s Shares Plunge as Amazon Announces Nigerian Expansion

  • The biggest e-commerce company in the world, Amazon has announced that is planning to set up shop in Nigria by 2023
  • This has seen the shares of other e-commerce platforms like Jumia to nosedive by about 10 per cent on Thursday, June 16, 2022
  • Also, a latin American e-commerce company, Mercado Libre saw its shares plunge by about 7 per cent as Amazon announced a Latin American expansion

Amazon is coming to Nigeria and this has sent shivers down the spine of Jumia investors.

Africa’s leading online marketplace, Jumia’s shares dropped almost 10 per cent on Thursday, June 16, 2022.

Another leading e-commerce platform, Mercado Libre, an Argentine company operating in Latin American countries saw its shares slip by more than 7 per cent.

Jumia, Amazon
Shares of Jumia fall as Amazon says it is coming to Nigeria Credit: Smith Collection/Gado / Contributor
Source: Getty Images

Other stocks fell amid interest rate hike by the US

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The S&P 500 was down about 2.9 per cent on Thursday afternoon, while the Nasdaq Composite dropped 3.6 per cent.

Global e-commerce giant, Amazon is making plans to launch marketplaces in Nigeria, South Africa and Columbia as early as next year.

The company’s growth will spur more competition for local players like Jumia, Thryve Platforms and Mercado Libre. Amazon also wants to expand to Belgium, internal documents state.

What Amazon plans to do in Nigeria

All countries are expected to get their own marketplace and access to Amazon's fulfilment service called Fulfilment by Amazon, the documents said.

Amazon also plans to bring its Prime membership program to each of the countries shortly after the launch, it said.

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However, Legit.ng reported that FBN Holdings Plc, the holding company of First Bank Nigeria Limited, has confirmed Mr. Tunde Hassan-Odukale as the single-largest shareholder.

Hassan-Odukale is the bank's largest single shareholder, with a 5.36 percent equity investment, followed by Femi Otedola, who has a 5.07 percent stake in the Group.

According to a document made public to the Nigerian Exchange, Odukale and Otedola are the only two large owners with more than a 5% equity stake in First Bank Holdings Plc (NGX).

Source: Legit.ng

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