THE LEX COLUMN: Africorn will be under intense scrutiny
Jumia has high-profile backers, but can it meet high expectations?
Africa is famous for its wildlife, but unicorns are rarely sighted. So it is no surprise that tech start-up Jumia — billed as the continent’s answer to Amazon — has caused a stir. The share rpice jumped more than 60% when the online retailer floated in New York on Friday, valuing it at about $1.8bn. The business, founded in 2012 by former McKinsey consultants, styles itself grandly as the leading pan-African e-commerce platform. That is not as impressive as it sounds. In 2018, less than 1% of retail sales were conducted online, compared with nearly 24% in China. A lack of infrastructure and a scarcity of bank accounts has hobbled e-commerce. Rising smartphone use should help. Jumia, which has Nigerian roots, pushes its own payment service, although it has to accept cash on delivery in many markets. It is tackling deliveries with leased warehouses, collection points and local partners. The group has attracted high-profile backers, including Rocket, Mastercard and SA wireless carrier...