Jumia faults Citron’s claims, hopeful of steady growth
Electronic commerce platform, Jumia Technologies, has faulted claims by Citron Research that the firm is a fraud. Jumia described the recent allegations as ‘selected, biased or unverified facts’ with what appears to be a clear objective of damaging its brand and business, especially because of its successful Initial Public Offering (IPO) on the New York Stock Exchange (NYSE).
The Chief Executive Officer, Jumia Nigeria, Juliet Anammah, said in Lagos that they stand by the disclosures made in the company’s prospectus during the IPO, which accurately described its business and the related risks in all material respects.Citron had earlier this month alleged that in 18 years of publishing, it has never seen such an obvious fraud as Jumia.
Citron also called the media in the United States ‘naïve’ for anointing Jumia the “Amazon of Africa”, after the e-commerce merchant successfully launched its IPO on NYSE, claiming a ‘widespread fraud’.But faulting the Citron’s report, Jumia said: “Some recent allegations were made about Jumia on the basis of selected, biased or unverified facts with what appears to be a clear objective of damaging the brand.
“We held our earnings call on May 13th, and we published our first quarter results, which we are very pleased with, and provided information to demonstrate those recent allegations are wrong.“We encourage you to download our results and access the transcript of the call, both of which are publicly available. We stand by the disclosures we made in our prospectus, which accurately describe our 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 three 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.”Anammah, who said the firm is doing everything with means to become profitable, noted that the profitability period for most eCommerce firms, including the likes of Amazon, is usually after the first 10 years. She disclosed that the firm is very much growing and on the part of profitability
The CEO, who revealed that out of the about 14 African countries, where Jumia currently ply its trade, Nigeria remains the largest market with 25 per cent share of the entire continent’s business.On why no African stock exchange was good enough for Jumia to list its shares, she explained that the firm had to go to NYSE to list because of the long term benefits, adding that investors from this region are always in a hurry to recoup their investments.
She stressed that for an industry, which is seven years, the firm needed to avoid some volatility, reason it went for a more developed market.
“The first question to ask is, how many exchanges are in Africa are actually doing well? When listing, especially when you are growing, of course you want the money to grow, but you also want people that will invest on the long term. We need to avoid volatility as a result of investors coming in and going out, waiting to recoup their investments in the short term. So, we need a good combination of people who are financial investors and keep the investments stable and also you need long term investors who are patient enough to wait for maturity period.
To get these types of people, we needed to look far because we don’t have people like that in Africa. The industry is just seven years old. We don’t want the financial investors going out all the time because that can be very dangerous for the growth of the firm. “So we need people who are long term oriented. Probably for the future IPO, we can consider the region, say Nigeria because by then people would have been better educated about the business of eCommerce.”