Site icon KahawaTungu

Jumia Exposed As A Fraudulent, Worthless Company By Citron Research


Online retailer Jumia engaged in massive fraudulent practices in a bid to list in the US stock market, a new research has revealed.

In a 12-page report published by Citron Research, a stock commentary website, it is alleged that Jumia ballooned its numbers before listing the US bourse since its key investors were leaving.

In a Jumia Confidential Presentation of October 2018, the retail company indicated that it had 2.1 active customers online, but inflated the numbers to 2.7 million in public reports.

A snipet showing discrepancies between the confidential reports and public announcements. [Source/ Citron]
The company also indicated that it had 43,000 merchants in the confidential report but in public it increased the numbers to 53,000.

“At the end of 2018, Jumia had a year’s worth of cash left and its two largest shareholders, MTN and Rocket Internet, wanted an exit. Therefore, Jumia filed for an IPO in March 2019, fudged its numbers, and began trading last month,” states the report in part.

While mobile penetration has soared in the core markets, the Company’s revenue declined from $145 million (14.5 billion) to $131 million (Ksh13.1 billion) while adjusted loss before tax went from $161 million (Ksh16.1 billion) to $150 million (Ksh15 billion).

Read: Bomb Scare Grounds Kenya Airways Flight To Johannesburg

“Jumia learned the hard way that Nigeria, Jumia’s largest and most important market, is not an easy place to do ecommerce for plenty of reasons including logistics, poverty, and a culture of corruption,” adds the report.

Business was so bad for Jumia that 41 percent of orders were returned, not delivered, or cancelled. This was previously disclosed in the Company’s October 2018 confidential investor presentation.

However, in public, Jumia announced that “orders accounting for 14.4 percent of our gross merchandise volume were either failed deliveries or returned by our consumers” in 2018.

“Since Jumia primarily sells consumer electronics, which should not have this high of a cancellation rate, it wreaks of fraud,” adds the report.

Severally, Jumia has been described by critics as a company that “cuts a picture of a fast-growing e-commerce company” but “beneath what is painted is a company struggling to survive over internal fraudulent activities”.

In Nigeria, agents who normally place orders for clients were found to be involved in fraud. In the confidential report, Jumia wrote: “recently received information alleging that some of our independent sales consultants, members of our JForce program in Nigeria, may have engaged in fraudulent activities.”

However, this piece of information in the public domain was edited out. Fraud involving the independent agents could have contributed to the over 40 percent of goods rejected.

Agents are not the only people involved in the Jumia, as it involves top managers of the company.

Read: Kenyans Risk Arrest If They Don’t Register For Huduma Namba – Tana River Officer

In February 2016, Jumia sold four of its subsidiaries to Jumia Co-CEO, Jeremy Hodara, for one euro (Ksh113) each. Jumia claims that  he “transaction was motivated by [Jumia’s] intention to cease operations in Tanzania, and Jeremy Hodara’s intention to run operations in Tanzania under his sole ownership but to continue operating the Tanzanian Entities under the Jumia brand.”

Despite only generating revenue of 238,000 Euros (Ksh27 million) and net losses of over 3 million euro (Ksh341 million) in 2017, Jumia reacquired these businesses in 2018 from Hodara for an undisclosed price.

During the same year, Jumia acquired Jumia Facilities, a payroll and support services operation based in Dubai, from Hodara for an undisclosed price.

Just before IPO, a Jumia MD was questioned by Nigerian police over allegations of fraudulent diversion of funds.

Local media commented that their investigation revealed that many top directors of Jumia were engaging in serious acts of fraud including diverting money that was supposed to be used for projects into their own bank accounts and using director owned private companies to accept Jumia orders while receiving advance payments but never fulfilling the orders.

In some cases, these fraudsters were relatives of senior management and “the directors would sweep the case under the carpet in order to avoid public scrutiny”.

“Jumia disclosed that “approximately 95 percent of [Jumia’s] consumers paid in cash” in Kenya. This resulted in “the large majority” of 720,000 euros of cash payments never being collected from deliveries in 2016. Jumia discovered this in early 2018,” adds Citron.

Following the report, Jumia’s shares in the US bourse sank more than 20 percent.

Jumia shares began trading on April 12, and soared 160 percent as of early this week. Shares were priced at $14.50 (Ksh1450).

Yahoo News has however cast doubts on the effects of the report to share price of Jumia, saying that the company has been wrong before.

“In 2017, the company recommended shorting Shopify, the fast-growing Canadian e-commerce software company, but the stock has doubled since then,” indicated Yahoo.

Email your news TIPS to or WhatsApp +254707482874. You can also find us on Telegram through

Exit mobile version