Grace Ashiru
Pernod Ricard, the world’s second-largest wine and spirits seller, and producer of popular brands like Jameson, has purchased 1.27 million shares in Jumia’s recently announced secondary sale. A recent regulatory filing revealed that the global liquor giant’s stake in Jumia has now increased to 7.5%, up from 6.4%.
While the exact price at which Pernod Ricard acquired these new shares remains unclear, Jumia’s stock (JMIA) was trading at $4.68 on August 6, the day Pernod Ricard made the purchase, according to an SEC filing by Jumia. If that was indeed the purchase price, Pernod Ricard would have spent $6 million.
Pernod Ricard has been a long-time investor in Jumia, at one point holding an 8.2% stake in the company. However, between 2020 and 2021, Jumia issued more shares, diluting Ricard’s position to 6.4%.
Jumia has not yet responded to requests for comment.
Pernod Ricard has confirmed the investment but declined to provide further details.
The liquor maker’s decision to purchase shares reflects its confidence in the African e-commerce giant, despite the company’s share price decline following its missed revenue estimates in Q2 2024. Concerns also arose over potential share dilution due to secondary sales.
In July 2024, Jumia’s share price surged by 252%, bringing its market capitalization to $1.3 billion. This uptick in investor confidence is attributed to improved cash efficiency and a strategic overhaul of the business.
Back in February 2023, Jumia made significant changes, including laying off 900 employees and reducing executive compensation. Later, in December 2023, the company shut down its cash-draining food delivery service, Jumia Food. The Q2 2024 financial report indicates that these efforts are yielding positive results, with losses narrowing to $19 million—half of the loss reported in Q2 2023.
The company’s 2024 financials also highlight a rise in orders to 4.8 million, despite a reduction in advertising expenditure. Jumia attributes this growth to SEO optimization and enhanced customer relationship management, leading to a 6% increase in platform users. Currently, the platform boasts 2 million active users on a quarterly basis—a promising statistic for Pernod Ricard, which sells its products both directly and through third-party sellers on Jumia across Africa.
