IT News Nigeria:
E-commerce giant Jumia has again suffered another setback and huge shock within the week when it abruptly shutdown its operations in Cameroon to the dismay of the public and workers following its ill-fated listing at the New York Stock Exchange.
Cameroon becomes the third African country in which Jumia has pack up operations following Gabon and Congo Republic, an indication of real trouble plaguing the firm.
Reports have it that there had been market speculation that Jumia was going through a bad patch in its market expectations. The company which released recently its Q3 financial report saw its operational loss increase to $55 million from the $45 million recorded in the same quarter last year.
According to Jumia, the closure is necessary as its current model is not suited for the country. “We came to the conclusion that our transactional portal as it is run today is not suitable to the current context in Cameroon. We wanted to see how business evolved. We can come back, but for now we’re closing (to have) time to study the market.” It did not state when and how it will return to the Cameroon market.
Jumia became the first African tech stock to list on the New York Stock Exchange (NYSE) in April 2019. Its shares tumbled in the months that followed despite a high after listing due to exposure of fraudulent claims made by Jumia ahead of the listing.
Jumia Technologies AG is a German-based e-commerce outfit. It operates an online marketplace for African consumers to buy and sell goods. The company offers a number of products which includes dresses, leggings, skirts, polo shorts, belts, watches, sunglasses, health and beauty products, a range of kid products etc.
Its operations spans different regions of Africa. It operated in 14 countries as at April 2019 with Nigeria, Africa’s most populous nation, being its largest market, reports Africanews.com.
A Quartz Africa report said Jumia was recently immersed in some operational challenges in Nigeria.
“The company has disclosed it recently uncovered instances of improper orders placed and subsequently cancelled on its marketplace platform wrongly inflating its order volume.”
Some of the improper sales practices, the company admitted, were carried out by its own personnel in “Jumia Force (J-Force),” its network of commissioned agents. The alleged fraud, purportedly running into billions of naira, was also said to have attracted the attention of the Economic and Financial Crimes Commission (EFCC). Confidential sources reveal that some staff of Jumia may have been picked up for questioning by the anti-graft agency. This was after some of the agents involved began to petition the Commission.