A worker pushes a pallet truck of stock inside a Jumia Technologies AG distribution warehouse in Lagos, Nigeria. Photographer: George Osodi/Bloomberg The retailer -- sometimes dubbed Africa’s Amazon -- has operations in 14 countries and is seeking to take advantage of rising incomes and better technology on the continent.
‘Unlimited Income’
In advertising for candidates to join J-Force, Jumia promises the opportunity to “earn unlimited income” while having “complete freedom and control over your activities.” Nigeria is ranked 144th on a list of 180 countries on the Corruption Perceptions Index, compiled by Transparency International.
The report of dubious sales practices comes after Citron called Jumia “an obvious fraud,” wiping out early gains from the IPO. The stock shed another 14% to $12.73 as of 12:39 p.m. in New York, dropping below the $14.50 listing price.
Jumia said second-quarter operating losses widened by 60% to 66.7 million euros ($74 million), mainly due to an increase in costs related to the vesting of share options following the IPO. The company’s target for profitability is late 2022, and the cash raised through the listing should take Jumia “close” to that, Poignonnec said.
The “business model has severe vulnerabilities,” Tellimer Markets Inc analysts led by Nirgunan Tiruchelvam said in a note following the results. “The business is intensely cashflow negative and we have concerns about its viability.”