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Will This Be the Year Jumia Becomes "The Next Mercadolibre"?

By Brian Stoffel and Brian Feroldi – Dec 31, 2021 at 7:00AM

Key Points

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The potential is there, but these things stand in the way.

You can forgive investors for getting excited. After watching Amazon (AMZN 1.75%) become the king of e-commerce in North America, many took what they saw and applied it abroad. So when e-commerce companies like Mercadolibre (MELI 3.42%) and Sea Limited (SE 1.24%) cropped up in Latin America and Southeast Asia -- and returned 4,400% and 1,200%, respectively, since going public -- it seemed like a sure blueprint for success.

That led many investors to put money behind Jumia (JMIA), which is trying to replicate the success of Amazon, Mercadolibre, and Sea Limited, but in Africa. But that promise hasn't panned out so far as the stock has fallen 50% since going public.

In this Dec. 26 video from their YouTube channel, Motley contributors Brian Feroldi and Brian Stoffel review the bull and bear case for Jumia, and reveal why they aren't holding their breath to see Jumia put up Mercadolibre-like returns.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brian Feroldi owns Amazon and MercadoLibre. Brian Stoffel owns Amazon, MercadoLibre, and Sea Limited. The Motley Fool owns and recommends Amazon, Jumia Technologies AG-ADR, MercadoLibre, and Sea Limited. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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