African Online Firm Jumia Admits To Fraudulent Sales
One of Africa’s largest online retailers Jumia, which counts MTN as a majority shareholder, has admitted to fraudulent sales figures.
Jumia owns the clothing seller Zando in South Africa, and operates in no less than14 African companies, with over four million customers across the continent.
According to Bloomberg, Jumia has revealed instances of improper orders that were placed and then subsequently cancelled to inflate sales in Nigeria in order to earn additional commission.
Jumia said that approximately 4% of the first-quarter sales, which were worth $17.5 million (around R265 million), are believed to have been inflated.
Quartz Africa reported that the online retailer claimed that the fraudulent orders have had no serious impact on its financial statements and that the dishonest employees involved had since been suspended pending a review.
In April Jumia was listed on the New York stock exchange at a price of $18.95 - it soon went up to almost $47.
Following the breaking news of the fraudulent sales on Wednesday, the shares dropped from $14.75 to $12.21. But went up again by Thursday early trading to around $13.00.
Jumia’s revenue grew to $47.9 million from $30.3 million in the second quarter of 2019, while losses increased substantially to $82.9 million from $51.7 million a year earlier.