Despite claims that political instability, regulatory uncertainty, and troubled logistics are the sole contributors to Jumia’s loss making trend in the African markets, the online franchise is also losing millions to its consumers.
Even as the online retailer seeks to grow its vendor base by 50 per cent, Consumer cyber fraud is a fast growing threat to the business and more so vendors who expect payment for goods sold. Consumer fraud, in this case, is a fraud perpetrated directly and intentionally by a consumer on the seller.
Jumia lost Ksh55 million in fraud after consumers acquired goods through electronic payment suppliers in 2017. The company posted a 14.9 billion loss before tax and other operational costs in the year ended December 2017.
According to inside sources, losses made by Jumia have resulted to dented operations and this has been blamed on unreliable cash reconciliation systems that have time and again failed to justify for the money leaving the accounts and amount being spent.
These cases are however not limited to the Kenyan market, another loss making market is Lagos, Nigeria where the online retailer has had hundreds of millions in loss compared to revenue made since its founding in 2012.
At a time when B2C are falling in Nigeria, where the organization was founded, Jumia has filed an Initial Public Offering (IPO) New York Stock Exchange (NYSE). The company has filed for $100 million, but according to Renaissance Capital, a global provider of institutional research, money management and index design services focused on newly public companies, Jumia might have to raise five times that amount.
Even as financial reports indicate improving revenue over the years, the online retailer is not yet profitable and losses in million dollars continue to rise. However, the pending valuation of share price and timeline for public stock sales might see the first African technology startup listed on a major global exchange.