THE LEX COLUMN: Citron gives Jumia shareholders heartburn
Dearth of internet buyers in its biggest markets is bigger bugbear for African ecommerce group than halving of depositary receipt after claims over fraudulent data
Short-sellers aim to leave a sour taste with the shareholders of a targeted company. The aptly named Citron managed that last week with its attack on African ecommerce group Jumia. Its depositary receipt, listed in New York in April, has halved in May, following claims of fraudulent data in its listing prospectus. Bad enough, but Jumia has an even bigger problem regarding customer trust. As yet few choose to buy over the internet in Jumia’s largest markets in Nigeria and Egypt. Jumia’s maiden results on Monday gave an idea about the opportunity ahead. Bringing forward the announcement by three days also said something about jangled nerves. While total revenues rose just 12%, gross profits surged 82%. Good news, but it has much work to do yet. In Nigeria and Egypt — accounting for a quarter of sales — only 4% or less of the population has shopped on the internet. Kenya has more than double the proportion. This is one reason Jumia uses a sales consultancy (JForce) to generate clicks a...