Why Jumia’s E-Commerce has Shutdown in Parts of Africa ?

#Jumia Africa’s Popular E-commerce is currently running in 12 countries in Africa excluding Tanzania & Cameroon due to recent shutdown. 

Reasons for Jumia Shutting Down Operations in Parts of Africa

Jumia’s Entry in Stock Exchange 

Jumia Technologies AG the leading pan-African e-commerce platform officially announced its listing on the New York Stock Exchange (NYSE:JMIA) on April 12th 2019.

“Going public has been an up and down affair. After becoming the first tech startup operating in Africa to list on a major exchange, the company saw its share price rise 70% after listing on the NYSE in April at $14.50” (TechCrunch, 2019).


Quartz Africa stated “Jumia set a share price range between $13 and $16 with its updated S1 filing showing the company will offer 13.5 million shares for purchase. But following a roadshow to gauge investor interest, Jumia’s shares were priced at $14.5, the midpoint of its initial range. The company confirms it has raised $196 million through the IPO”.

The expected interest, investors predict, will not be shaken by the scale of losses Jumia has incurred while operating in its African markets. As its S1 filing show, as of Dec. 31 2018, the company has accumulated losses of nearly $1 billion.

“In May, Jumia’s stock tumbled when it came under assault from a short-seller, Andrew Left, who accused the company of fraud in its SEC filings” (TechCrunch, 2019).

Jumia Technologies Market Summary

The company posted a Sh14.9 billion ($148 million) loss before tax and other costs in December 2017 compared to Sh11.3 billion the year before.

According to Citron Research “In order to raise more money from investors, Jumia inflated its active consumers and active merchants figures by 20-30% (FRAUD).
The most disturbing disclosure that Jumia removed from its F-1 filing was that 41% of orders were returned, not delivered, or cancelled. This was previously disclosed in the Company’s October 2018 confidential investor presentation”.

“This number is so alarming that is screams fraudulent activities. Instead, Jumia disclosed that “orders accounting for 14.4% of our GMV were either failed deliveries or returned by our consumers” in 2018”.

“Assuming 41% of orders were returned, not delivered, or cancelled in 2018, this implies that almost 30% of orders were cancelled in 2018. Since Jumia primarily sells consumer electronics, which should not have this high of a cancellation rate, it wreaks of fraud”.

Jumia even fired several employees and sales agents and suspended seller accounts that were involved in the scheme where “independent sales agents and sellers worked with employees to profit from what sellers pay to use the online platform and commissions that sales agents earn”.

Jumia “has identified instances where orders were placed and then subsequently canceled. It suspended employees involved in those transactions while a review is continuing” (MarketWatch, 2019).

To conclude Marketplace has been redirected to Jumia Deals, a classifieds platform that allows users to buy and sell, while other Jumia Services like Jumia Travel and Jumia Food are still online.


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