Broadcasting
Is Jumia on the Verge of a Shock Exit from Nigeria?
By Kameni Doe
Long touted as the Amazon of Africa after a much-publicised listing on the New York Stock Exchange (NYSE) in 2019, Jumia has since contended with a reversal of fortunes, accentuated by a series of missteps or unforced errors that have crippled its status and left market watchers speculating about a potential exit from Nigeria, its biggest market.
As recently as 2016, Jumia became the continent’s first unicorn being valued over 1 billion USD. It had equally seen a rapid expansion of its services to over 15 countries in Africa. However, after a highly subscribed Initial Public Offer (IPO) on the NYSE that later went south after a bashing from Citron, a US-based equity intelligence research company (which described the filing as a fraud and the company’s shares as worthless), it has been a seeming trajectory of grace to grass for Jumia.
But how did it all go wrong for this e-commerce giant?
In analysing the Jumia debacle, it is important to situate the fact that the company, from inception, has been a loss-making entity. Jumia is yet to turn profitable, despite over a decade of huge financial investment and massive expenditure in marketing and overheads in Nigeria. Considering the fact that Nigeria remains the biggest contributor to its revenue profile, one can only imagine how it has fared in other African countries in which it is operating. In November 2019, Jumia announced the suspension of its e-commerce operations in Cameroon effective November 18 as the company concluded that its transactional portal is currently not suitable to the current environment in that country. As part of the portfolio optimization effort, Jumia later ceased operations in Tanzania effective November 27, 2019. While its operations in Tanzania provided many opportunities for customers and vendors, the company said it needed to focus its resources on other markets that can bring the best value and help Jumia thrive. In addition, the company held that the decision would help it achieve greater success in the future. On December 9, 2019, Jumia suspended Jumia Food in Rwanda, making it the third country in two months as part of a continuous monitoring of the business environment and operating costs in the markets in which it operates. However, it expressed its intention to continue doing business online in those countries on the classifieds portals, previously called Jumia Deals.
From the foregoing, one can detect its ongoing struggles in Nigeria mirror a discernible pattern across other locations in Africa.
More importantly, Jumia’s challenges in Nigeria can also be extrapolated from its often-changing business model which sometimes may appear misguided in navigating a peculiar market such as Nigeria. In 2020, Jumia announced a tweak in its business model to focus more on its third-party marketplace. This saw the company place less attention on its first-party model which involved the company basically buying items and putting it at the disposal of shoppers. Consequently, the intent was to grow its revenue from the collection of commission on items listed and sold on its platform – a move which appeared to have an instant impact. In 2021, Jumia generated more revenue – $24m in Q1 2021 compared to $23m in Q1 2020 — from third-party sales on its platform. However, in what would seem like not being able to have one’s cake and eat it, Jumia’s first-party revenue dropped from $12m in Q1 2020 to $8m in Q1 2021, a massive 35% decline. Although this switch in its business model contributed to lower logistics costs (Jumia’s fulfilment costs dropped by 18% Year-on-Year to $23.7m in Q4 2020 and in Q1 2021, it dropped to $17.2m), Gross Merchandise Volume (GMV) also took a hit as a result. In fact, average order value declined by 16% from $35.8m in Q1 2020 to $30m in Q1 2021 while GMV also dropped by 21% compared to 13% in Q1 2021.
Critics have also fingered the Jumia strategy of outspending Konga, its main rival in Nigeria, as one of the missteps that landed it in trouble. Jumia has spent a humongous sum to occupy a dominant Share of Voice in the Nigerian market, while not investing as much effort in cleaning up its reputation. The reality on ground, however, shows that while it has consistently spent more than 500 times than its closest rival, Jumia has not seen the massive expenditure result in any meaningful outcome in its acceptability, brand love or trust for the platform among Nigerians.
Closely related to this is some of the unethical shenanigans that have dogged Jumia over the years. After enduring a thrashing of its share value following revelations by Andrew Left, a short seller at Citron in 2019, Jumia confirmed that several class action lawsuits have been filed against the company and its officers in New York over alleged misstatements and omissions in its IPO prospectus. In addition, Jumia, in the same year, admitted that it had uncovered instances of improper orders placed and subsequently cancelled on its marketplace platform, wrongly inflating its order volume. Some of the improper sales practices, the company said, were carried out by its own personnel in Jumia Force, its network of commissioned agents. The fraudulent orders generated $17.5 million in GMV between the last quarter of 2018 and the first two quarters of 2019, prompting allegations that they had been used in padding the company’s financial statements filed as part of its IPO. Recently, Jumia was in the news for the wrong reasons once again this year, with over 60,000 units of fake Nokia 105 traced to it which the e-commerce company had already distributed to its outlets in Africa to grow their sales and number. Reports indicate that Nokia 105 is a marque product from Nokia and highly sought after in Africa. Since the relaunch of Nokia phones, some of its products have been targeted by crooks who clone them and sell at lower prices to beat competition. Checks at Nokia also showed that fake Nokia 3310, the rave of smartphones from Nokia and their most sold brand before it suffered market eclipse, had popped up in China soon after it was relaunched in 2017, as well as some markets in Asia and Africa, with Jumia believed to have been one of the distribution channels of these fake Nokia phones.
Not long after this development, the company had announced the exit of co-CEOs Jeremy Hodara and Sacha Poignonnec, ex-McKinsey consultants, who founded the company in 2012 alongside Tunde Kehinde and Raphael Kofi Afaedor.
But beyond this, the exit of a number of key investors seem to present the most valid evidence of the shaky foothold of Jumia in the Nigerian market. Added to this is the historical losses that have become a tradition of sorts for it. Jumia has accumulated over $1 billion in losses since inception in 2012 as it continues to burn through cash in order to stay relevant in the market but without a clear, discernible strategy to turn a profit. Only a fool would have supported the Jumia strategy of burning cash, with over $221m loss every financial year.
Leadership has remained a major sore point of note too. The vagaries and peculiarities of the Nigerian e-commerce market requires some deep, local insight which has been obviously lacking at Jumia. Indeed, feelers from industry experts suggest that the company’s leadership is inexperienced and blindsided, especially with respect to a core understanding of the Nigerian market. But the sacking or exit of two founders and some Management staff of the company equally appears to have come too late.
I had predicted years back that Jumia’s fight with Konga in a market that never existed may destroy Africa’s potential as a future market to bet on. Naspers and AB Kinnevik, erstwhile owners of Konga, were smart enough to sell to a strong and experienced indigenous company in the Zinox Group. The folks at Zinox at least understand the market, having built a solid reputation of leadership and constant success in the sector for over 30 years and are financially strong to navigate the tough market.
Konga pioneered the third-party marketplace structure which Jumia later aped. Also, Konga launched the omnichannel structure which has remained the mainstay of its business model, one that has also been adapted by global e-commerce players such as Amazon and Alibaba, among others. This model has aided Konga consistently take a share of the growing appetite for online shopping, while also allowing it key into the still predominant traditional shopping predilection of the average Nigerian. Since its 2018 acquisition by the Zinox Group and the subsequent operational merger between it and Yudala, we read that Konga has cut losses by over 45 per cent and also achieved growth of over 800 per cent in the past 18 months. Crucially, Konga’s advantageous understanding of the Nigerian market finds further expression in its fusion of an online platform with a growing chain of brick-and-mortar stores including its robust digital logistics, as well as its strategy of retaining a highly ethical, customer-centric approach to the business.
Clearly, there is strong optimism that Konga will survive, despite the encumbrances in the tough Nigerian market, but with Jumia, it would require a miracle. If founders anywhere in the world are unable to turn their company to profitability before exiting, it is near impossible for any corporate genius to restructure it and turn it around except they sell.
Like they say, founders understand the DNA of their companies.
Kameni Doe, an Emerging Markets expert, writes from Yaounde, Cameroon
The Federal High Court sitting in Abuja on Thursday ruled over a dispute between the Federal Competition and Consumer Protection Commission (FCCPC) and MultiChoice Nigeria over the recent hike in subscription fees for DStv and GOtv services, declaring that only the President has the power to fix or suspend prices in Nigeria.
Justice James Omotosho, trial Judge,ruled that the suit filed by MultiChoice Nigeria constituted an abuse of court process as similar proceedings were already pending elsewhere, adding that the plaintiff should have pursued its arguments in that court, rendering the current filing procedurally inappropriate.
Justice Omotosho noted that while the FCCPC has investigative powers under its establishing Act, it lacks the authority to fix or suspend prices unless specifically delegated by the President through a gazetted instrument and held that such delegation was not presented to the court.
“The power to fix prices is exclusively that of the President. Any decision taken without such delegation is a nullity,” the Judge held and added that Nigeria operates a free market system and service providers like MultiChoice retain the right to set their prices, with consumers free to accept or reject them.
The Judge further ruled that FCCPC’s actions, including directing MultiChoice to suspend its price increase, breached the company’s right to fair hearing and appeared selectively targeted.
He dismissed the FCCPC’s claim that MultiChoice held a dominant market position, calling the argument untenable.
“The use of services like those provided by the plaintiff is discretionary and not essential. Nigeria can do without it,” he added and warned that attempts to fix prices by regulatory bodies could scare off investors and harm the economy of the country.
The court held that while the FCCPC may investigate market practices, it cannot impose price controls without proper legal backing.
MultiChoice Nigeria, the parent company of DStv and GOtv, announced a price hike on March 1, 2025, citing inflation and rising operational costs. The adjustments saw subscription fees increase by up to 25% across various packages.
By Diana Tenebe, Chief Operating Officer, Foodstuff Store
Nigeria’s foodtech sector holds immense promise to transform our nation’s food production, distribution, and consumption systems.
However, this burgeoning industry currently navigates a complex maze of challenges that could significantly hinder its progress. While innovation and entrepreneurial drive are abundant, a confluence of infrastructural deficits, economic headwinds, technological disparities, and logistical complexities casts a shadow on the sector’s long-term viability.
Understanding and addressing these multifaceted hurdles is paramount for foodtech companies aspiring to thrive and contribute meaningfully to Nigeria’s food security.
One of the most significant impediments to the foodtech sector’s advancement is Nigeria’s persistent infrastructural weaknesses.
The unreliable power supply, a well-known constraint for businesses nationwide, directly threatens food preservation, increasing spoilage risks and driving up operational costs for companies reliant on refrigeration and consistent processing.
Similarly, the often-deteriorated state of our road networks complicates logistics and transportation, hindering the efficient movement of goods from farms to consumers and across the supply chain.
Furthermore, limited access to clean water exacerbates operational challenges, particularly for maintaining food processing and hygiene standards. Collectively, these infrastructural shortcomings inflate operational expenses and introduce vulnerabilities throughout the food supply chain.
Economic constraints add another layer of intricacy. Fluctuations in currency exchange rates create instability in pricing and procurement, especially for businesses dealing with imported technologies or ingredients. Persistent inflation erodes consumer purchasing power and increases the cost of essential inputs, squeezing profit margins for startups.
Moreover, limited access to credit and investment capital makes it difficult for emerging foodtech companies to secure the necessary funding to invest in crucial technology, infrastructure, and expansion efforts.
This financial constraint can stifle innovation and prevent promising ventures from reaching their full potential.
The digital divide also poses a unique challenge for foodtech companies aiming to leverage online platforms and digital solutions. While mobile phone usage is widespread in Nigeria, disparities in digital literacy and access to reliable internet connectivity can restrict the widespread adoption of online food ordering and delivery services, particularly in rural and underserved communities.
This necessitates creative and inclusive strategies to bridge the digital gap and reach a broader consumer base.
Inefficiencies within the supply chain represent a critical bottleneck in the Nigerian food system. Fragmented agricultural supply chains, characterised by numerous intermediaries and a lack of transparency, contribute to alarmingly high post-harvest losses.
Inadequate storage facilities and inefficient transportation infrastructure further compound these issues, leading to significant waste and price volatility.
Addressing these systemic weaknesses is crucial for ensuring a stable and affordable food supply for all Nigerians.
Navigating Nigeria’s regulatory landscape can also be a daunting task for foodtech businesses. The presence of multiple regulatory agencies, coupled with often bureaucratic and time-consuming processes for obtaining licenses and permits, can create significant hurdles for startups. Clear, consistent, and streamlined processes within the regulatory framework are essential to foster a more enabling environment for innovation and growth.
Building consumer trust and acceptance for new food technologies requires overcoming inherent skepticism and unfamiliarity. Concerns regarding food safety, quality, and the security of online transactions can hinder the adoption of novel food products and digital platforms.
Transparent communication, robust quality control measures, and consistent consumer engagement are vital for building confidence and fostering widespread acceptance.
Finally, a notable talent gap exists within the Nigerian foodtech ecosystem.
A shortage of professionals possessing specialised skills in food science, technology, business management, and logistics can limit the growth and innovation capacity of companies in this sector. Addressing this skills deficit through targeted training and development initiatives is crucial for long-term success.
Despite these significant challenges, promising pathways forward can be forged through innovative and context-specific approaches. Investing in localised infrastructure solutions, such as independent power generation and efficient localised logistics networks, can mitigate the impact of broader infrastructural deficiencies.
Exploring diverse funding avenues beyond traditional banking, including angel investors, government grants, crowdfunding, and revenue-based financing, can alleviate financial constraints.
Adapting to the digital divide by leveraging basic mobile technology and employing offline strategies like local agent networks can expand reach and inclusivity.
Building resilient supply chains through direct farmer relationships, investing in aggregation centres, and utilising technology for farm management offer tangible solutions to logistical inefficiencies.
Proactive engagement with regulatory bodies and advocating for clearer, more supportive policies are crucial for navigating the regulatory landscape effectively. Building consumer trust necessitates transparent sourcing practices, clear communication about product benefits and safety, and active engagement with consumer feedback.
Finally, investing in talent development through collaborations with educational institutions and in-house training programs can bridge the critical skills gap.
Foodstuff Store is emerging as a business with a clear vision to directly confront several of these challenges. We are actively developing a decentralised network of businesses supported by strategically located distribution hubs across target states.
This approach will directly address the limitations imposed by poor road networks, ensuring more localised access to our food products.
Furthermore, the establishment of regional storage facilities, including a state-of-the-art solar-powered cold storage, directly tackles infrastructural deficiencies related to food preservation and ensuring a consistent supply.
Foodstuff Store’s ambition for end-to-end management of the food supply chain, encompassing in-house production, direct sourcing, advanced storage solutions, and efficient distribution, offers a powerful solution to existing supply chain inefficiencies.
This integrated approach promises enhanced quality control, significant reductions in post-harvest losses, and a more reliable supply of both perishable and non-perishable goods for our customers.
Our aspiration to become the “Amazon for Food Products” is a clear and ambitious goal underpinned by a technology-driven approach to all aspects of our operational management.
Foodstuff Store’s vision underscores a business model strategically designed to overcome significant hurdles within the Nigerian foodtech sector, offering a beacon of potential and a pathway to a more secure and efficient food system in a challenging yet remarkably promising landscape.
TVC News has broken new ground in Nigeria’s media space with the launch of the country’s first Artificial Intelligence (AI) news presenters.
Rolled out in May 2025, the AI anchors will deliver news bulletins in English, Yoruba, Hausa, Igbo, and Pidgin, reflecting the broadcaster’s commitment to technological advancement and linguistic inclusion.
The initiative is designed to enhance news delivery by supporting human journalists, not replacing them.
TVC Communications, the parent company of TVC News, described the development as a milestone in its efforts to integrate cutting-edge technology into broadcast journalism.
“We are thrilled to pioneer this innovation in Nigeria’s media industry,” said Victoria Ajayi, chief executive officer, TVC Communications.
“Our AI news anchors represent a new era in news reporting, and this move underscores our dedication to using technology as a tool for growth and progress.”
Ajayi clarified that the AI-generated content will undergo thorough editorial review.
“Trained journalists and editors will assess every output to ensure it meets our standards of accuracy, balance, and credibility,” she noted.
In response to concerns about the potential misuse of AI, the organisation said it had established rigorous editorial safeguards, including watermarking and verification protocols. It also reaffirmed its adherence to the Nigerian Broadcasting Code and journalistic ethics.
With this launch, TVC News has become a trailblazer in AI-assisted journalism in Africa, setting a bold example for future media innovation across the continent.
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