insert_pixel_code_here (Facebook Pixel code) (leads Generation code) /head google-site-verification=xTkzPdIRw0BCAaX-xIqcznTA7eR38DTr0u7xNW8EiIc
Has The Jumia IPO Been A Success Story

Has The Jumia IPO Been A Success Story

Has The  JUMIA IPO Been A Success Story

Has The  JUMIA IPO Been A Success Story. Over the years, several companies including small or large scale have experienced falls in the stock market, loses or gains in profit making. Could it be that Jumia, the largest e-commerce operator in Africa (often referred to as the Amazon of Africa) has joined the list of this sad story?

Jumia as at December 2018, has accumulated loses of nearly $1 billion, (like amazon), it’s initial shareholders will have to be patient on the path to profitability. Jumia’s shares have fallen by 14.6% after Andrew Left (a US short seller) allegedly called Jumia a fraud. Left said in a report that there were major discrepancies between a confidential investor presentation from October 2018 and what Jumia told the Securities Exchange Commision (SEC).

It said that the e-commerce company inflated active customer and active merchant numbers by 20% to 30% and that 41% of orders were returned, not delivered, or cancelled. While there were major concerns about Jumia’s business model and its profitability, fraud would not have been a suitable word in this situation.

Another analysis showed that it could possibly be that the company which was reported to have been under pressure to provide an exit strategy for major shareholder like MTN, who wants to sell off some of their Jumia shareholdings after the lock-in period. Even after all these allegations, we are still not sure of the credibility of Andrew Left’s citron research. Left who was once banned from trading in Hong Kong for making false allegations about a Chinese property developer, also makes millions betting against stocks. Therefore, his citron research will need to present evidence about its claims. Also, there is an ongoing four-month-old-petition asking SEC to investigate this research for publishing falsehoods in order to manipulate the market for their gain.

Meanwhile, Jumia’s CEO, Sacha Poignonnec in an interview with CNBC said that “the difficulty for e-commerce sellers in Africa is that of inefficient infrastructure throughout the continent, and the people are not savvy when it comes to online shopping, and in some part of Africa They still believe that online shopping is “alien”. However it is said  Jumia has so far recorded 4 million active customers as of the fourth quarter of 2018, operates in 14 African countries and provides a lot of inclusion for consumers who have not necessarily the right access to retail. He also mentioned that there is a huge opportunity in Africa because so many people still haven’t experience online shopping.

Jumia which was founded in 2012, is the first African Unicorn to go public. It’s platform allows buyers to buy smartphones, groceries, household gadgets, electronic devices, provision of services and retail items in general. It is headquartered in Germany where it works with local entrepreneurs and logistics companies to deliver the products. Some of their biggest customers are Apple, HP, and Huawei.

Pin It on Pinterest