Jumia, Africa’s largest online retailer, was founded in 2012 by Sacha Poignonnec and Jeremy Hodara, who were both former employees of the American worldwide management consulting firm, McKinsey & Company.
Jumia offers customers the ability to buy products online, like phones and shoes, as well as groceries, flights, food delivery, and offers bill paying and cellular data plans. The company sought to build an online shopping experience, among other digital products, that could work well with Africa’s sometimes ineffective infrastructure.
According to Chinese state-run news organization China Daily, Alibaba serviced 4.2 million African customers through its AliExpress services since it entered the continent. Jumia serviced 4.3 million users and 81 thousand active sellers in the 14 countries it services since it started. Amazon is available in 11 countries on the African continent, but neither Amazon nor Alibaba have had the benefit of getting their start in African countries. Jumia, for example, offers unique features like allowing customers to pay for items upon delivery.
Jumia’s stock price rose 75.6% on April 12 when it went public, giving it a market cap of $3.9 billion. And even though it had about $1 billion in losses at the time, the prospective shareholders were forgiving.
In May of 2019, Jumia came under fire from Citron Research, a stock commentary website run by short seller Andrew Left, for what Citron claimed was securities fraud and discrepancies in its reported key financial metrics. The report released by Citron brought Jumia’s stock down over 40% in two days.
Citigroup, one of Jumia’s IPO underwriters, released a report debunking most of Citron’s allegations, but noted that, “Jumia could do more to provide disclosure on some aspects of its operations, as a matter of transparency and best practice.”