Jumia denies fraud allegations as shares continue to fall

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Jumia, the Africa-focused e-commerce company, denied fraud allegations from an activist short-seller as its share price continued to fall in New York. Jumia listed in New York in April and initially saw its share price nearly triple before falling back in May.

On Friday, shares lost a quarter of their value after the short-seller Citron accused Jumia of fraud. In early trading on Monday, shares were down nearly 15 per cent at $20.86.

Sacha Poignonnec, co-chief executive and co-founder, said the company “completely stands by” the numbers it included in its initial public offering filings, which were questioned by Citron.

“We will not be distracted . . . by those who seek to create doubt to profit at our expense and that of our long-term stakeholders,” he said on an analyst call following the announcement of first-quarter results, which it had brought forward following the allegations.

Over the weekend, Jumia passed around a research note by Citibank that rebutted some of Mr Left’s allegations, but also said that the company needs to be more transparent about some of the issues raised, particularly whether active user numbers were inflated and about a related-party transaction involving one of its co-chief executives.

Citron is “just taking selected, biased and unverified facts [with] a very clear objective of damaging Jumia and that’s what I see,” said Mr Poignonnec to the Financial Times.

“And I’m sure certain people must be benefiting from that, and I guess that’s the way the world works and it’s just unfortunate.” Mr Poignonnec said the company debated how to address the allegations without feeding the publicity surrounding them, but ultimately decided it had to defend the business.

He said the discrepancies between a private investor presentation and its official filings that Citron claimed as … Read More...

Jumia records positive Q1 results amid 50% crash in share price

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Jumia Technologies Monday released its 2019 first quarter results to show strong momentum in gross merchandise volume (GMV) growth of 58 percent Year-on-Year (YoY), which the company says it will leverage to continue driving monetisation improvement, already visible in its 102 percent market place revenue growth.

The company, which suffered a sharp fall in its share price by over 50 percent after being accused of fraud by Citron, showed strong improvements in its books, with an addition of 1.3 million active consumers.

Sacha Poigonnec, co-CEO and co-founder of Jumia Technologies said: “We see a lot of great momentum in the business, especially as we delivered on our four major pillars which are to grow GMV, increase monetization, drive Jumia pay and improve efficiency.”

In Q1 2019, Jumia reduced operating loss by 3.56 percent, grew marketing and advertising by over 200 percent and sustained Jumia Pay momentum with a 50 million euro investment by Mastercard. This is a strategic deal that will help Jumia reduce the numbers from payment on delivery and spread its payment platform across other markets.

“We are seeing appetite from international sellers on the e-commerce platform, with keen interest to sell in Africa and you will see more of these partnerships in the future. We have already rolled out Jumia Pay in three new markets after being launched in Nigeria and Egypt and in the next few months, we will launch in other markets where we operate but for now, it’s too early to talk about how fast the evolution from prepaid to post-paid is,” Poigonnec said during a conference call to announce the results on Monday.

 

Jumoke Akiyode-Lawanson

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Jumia’s rise exposes challenges of online shopping in Africa

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Nanda Aye’s customer called him three times in the half-hour it took him to creep a few blocks through a notorious Lagos go-slow toward the Lekki Bridge tollway.

“I’ll be there this morning, madame,” he said, his three-wheel truck idling. “This morning. Yes, this morning.” Asked for a specific arrival time, or at least a window of a few hours, Mr Aye demurred.

The courier he works for, Metro Africa Xpress, trained him to be vague, in case customers are disappointed with its client, Jumia, the pan-African ecommerce site that listed on the New York Stock Exchange last month at a valuation of $1.1bn.

Mr Aye’s delivery run shows some of the biggest challenges facing Jumia, and the investors who have sent its shares up by more than 200 per cent, as it tries to expand an African ecommerce business: traffic, logistics, and perhaps most importantly, customers wary of shopping online.

Like its rivals in many developing countries, Jumia offers payment on delivery “as a marketing tactic” since customers are worried about being scammed and are uncomfortable sharing their information online, said Juliet Anammah, chief executive of Jumia Nigeria, which accounts for about a quarter of the business by sales, sellers and customers.

“If you have those kinds of mental barriers, one way to break them is to say you’re not sure, fine, use cash on delivery — and when the things come to you, you decide if you want it,” she said.

But cash on delivery has a much higher return rate, and carries risk. Jumia revamped its system to make sure drivers never carry too much money after a third-party deliveryman in Nigeria was killed two years ago.

 

Mr Aye delivered to five addresses scattered around Banana Island — probably the … Read More...