By Martin Ekpeke
Online shopping store, Jumia has described the allegations raised in a Citron report that it inflated the number of its customers and active participants to attract investors to the company as a selected, biased and unverified facts, whose sole objectives is to damage Jumia.
The Chief Executive Officer of Jumia Nigeria, Mrs. Juliet Anammah, who was reacting to the allegation at a press conference in Lagos yesterday, narrated that the E-commerce company stand by the disclosures it made in its prospectus, which accurately describe the company’s business and the related risks in all material respects.
“We are very excited about the future and our prospects. We will not be distracted from executing on our strategy and carrying out our mission by people who seek to create doubt to profit at our Company’s expense. In March, BCG published a report explaining that online marketplaces had the potential to create 3 million new jobs across the African continent by 2025. We very much believe in the positive impact of technology, and of Jumia, for the continent, and we look forward to continuing to create positive impact in the future,” she said.
Just like any company intending to be listed on the New York Stock Exchange (NYSE), Jumia had to file for an Initial Public Offering (IPO) with information about its operations, which includes the company’s active customers and merchants.
The initial report was tendered at the confidential investor presentation in October 2018, and the second was made to the Securities Exchange Commission.
But a report Citron research punctured every information Jumia gave, describing it as material discrepancies, “When a company markets to investors ahead of its IPO and then a few months later omits material facts and makes material changes to its key financial metrics to make the business seem viable, it becomes a securities fraud,” the report says.
Meanwhile, Jumia has said it is not distracted by the Citron report or any other negative report, as it is already on the pact of profitability. “We continue to deliver on our strategy: strong growth,monetization increase, cost efficiency, JumiaPay development,” it says.
In the company’s first quarter 2019 report presented yesterday, Jumia reported a rise in active consumer numbers from 2.1 million in October investor presentation to 2.7 million in April while active merchants moved to 53,000 from 43,000 during the same period.
In the result, Jumia has Strong GMV growth of 58 percent year on year, 102 percent marketplace revenue growth, improved efficiency of +356bps and just recently a €50mm investment from Mastercard to sustain Jumiapay momentum.
The results also show strong brand recognition, which continues to drive marketing efficiencies. Jumia has high recognition as 74 percent of respondents who are shoppers know Jumia. High consideration as 62 percent of shoppers who know Jumia consider Jumia for trial in the next 6/12 months. Jumia is also the preferred online destination as 78 percent of online shoppers bought on Jumia over the last twelve months.
According to Jumia, its profit benefits are coming from multiple growth opportunities. For instance, it grows existing regions and categories, drives revenue and costs efficiency, develop new lines of business, expand to new markets and maximize value creation potential of each asset.