Online retailer Jumia suspended its e-commerce business in Cameroon on Nov. 18 after a tough year that saw its stock price decline heavily since a New York IPO in April 2019.
After initially jumping to almost $47 a share – three times the listing price of $14.50 – Jumia shares started falling after data-misrepresentation allegations emerged by Citron Research, a known short stock seller.
Jumia’s shares have continued their steady decline. They were valued at $5.28 per share — valuing the company at $394 million — at the close of trading on Nov. 19.
In December 2018, French drinks company Pernod Ricard SA bought 5.1 percent of Jumia for around $84.2 million, valuing the e-commerce firm at around $1.5 billion and making it an official tech unicorn.
That valuation rose to $1.9 billion on the first day of trading in New York but it has declined steeply ever since.
Based in Dubai, the Africa-focused firm has lost its unicorn status and continues to lose money while trying to drive growth in its 14 African markets.
JumiaPay, its online payment platform, has been one of the few positives for the company whose e-commerce business has yet to turn a profit.
JumiaPay offers payment processing for items purchased on the Jumia platform. It also provides Jumia Lending, a quick loan service for sellers, offering loans based on the vendor’s sales history. JumiaPay also allows users to buy mobile airtime and pay utility bills.
An earnings call in November 2019 suggests that Jumia may be weighing the idea of giving up its “Amazon-of-Africa” objective in favor of a “PayPal-of-Africa” play, Weetracker reported.
The JumiaPay digital finance product experienced significant growth. Total payment volume increased by 95 percent to $35.4 million in the third quarter of 2019 compared to $18.14 million in the same period in 2018, according to Jumia’s third-quarter financial results.
Jumia has committed to offering JumiaPay as a standalone service across Africa, according to Techcabal. The payment platform is available in Nigeria, Egypt, Ivory Coast, Ghana, Morocco, and Kenya, with plans to expand into Jumia’s other African markets.
Jumia suspended operations in Cameroon after it closed its e-commerce subsidiaries this year in Congo and Gabon, and Rwanda in 2018.
In August 2019, Jumia admitted to internal staff fraud involving fake orders placed and subsequently canceled to inflate sales in Nigeria, one of its largest markets.
The staff fraud affected sales worth $17.5 million, with agents inflating the sales to earn additional commissions, according to Marketwatch.
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A steep decline in its share price means Jumia has lost its unicorn status.
Shares fell below the IPO price in August, losing 35.6 percent of their value in July alone, according to data from S&P Global Market Intelligence.
Despite the Cameroon closure, Jumia said it would continue to support buyers and vendors in the country using its classified portal known as Jumia Deals.
