Following the conclusion of the independent special investigation, Tizeti Board of directors have reinstated Kendall Ananyi as Chief Executive Officer.
With this development, the interim Co-CEOs Ifeanyi Okonkwo and Patricia Aiyedun, will return to their respective positions as Chief Operating Officer, and Chief Financial Officer.
According to a statement published on its website, the company stated that investigations into the allegations of sexual harassment could not establish a case of sexual harassment.
The board had on June 7 appointed an Independent Special Investigation Committee of its Board of Directors to investigate allegations of sexual harassment made against Kendall Ananyi, the embattled CEO.
To ensure the independence of the committee, the CEO stepped down and was walled off from communications with the Independent Special Investigation Committee and any matters related to the investigation, the statement read.
After a month of investigations, the committee led by Senior Advocate of Nigeria Olumide Sofowora, SAN, C.Arb. of Olumide Sofowora Chambers, stated that no clear case of sexual harassment had been established, and recommended that the CEO be reinstated.
According to the statement, the committee researched “what actions would constitute sexual harassment, gathered relevant information from a number of sources in both Nigeria and Ghana, and conducted a number of interviews, including separately interviewing both the accuser and Mr. Ananyi”.
It was based on this that the independent legal counsel concluded that a clear case of sexual harassment had not been established.
The company promised that a sexual harassment policy would be put in place going forward.
“Tizeti remains fully committed to high ethical standards, gender equality, providing a workplace that is free from sexual harassment and ensuring that its diverse team feels comfortable and safe at all times.
“Tizeti wants to ensure that it has best in class policies and procedures going forward. As a result, Tizeti will be updating its code of conduct and putting in place a sexual harassment policy that is in line with best practices and encourages the reporting of any potential incidents,” it said.
Jumia sees competition from startups in growing African e-commerce market
Investors have experienced a couple of twists and turn since the stock debuted in New York.
One of Africa’s leading e-commerce firms, Jumia Technologies AG, is facing a new set of competition from startups in the Africa e-commerce and logistics market, after the coronavirus pandemic increased the demand for online deliveries.
The Co-Chief Executive Officer of Jumia, Sacha Poignonnec revealed that the restrictions and lockdown, which were implemented by various countries as part of measures to contain the spread of the coronavirus, have attracted more entrepreneurs into the e-commerce business. He, however, demonstrated good sportsmanship, saying:
“Greater competition is to be welcomed, given there are still so few people in the region that transact online. I would rather grow the market than just try to take everything.’’
Nairametrics had reported that Jumia reported a loss after tax of 37.6 million euros (N17 billion) in the second quarter of 2020. E-commerce firms were expected to be one of the major beneficiaries of the coronavirus pandemic as consumers, during the lockdown, moved towards online transactions to meet their essential needs.
However, the losses were an improvement on the 66.7 million euros that was reported for the corresponding period in 2019. Apparently, the firm is trying to dig itself out of a massive loss hole.
The Lagos-based online market place, which is listed on the New York Stock Exchange, was one of the pioneers of internet trading in sub-Saharan Africa. Unfortunately, the company’s performance falls behind that of its peers around the world due to various challenges ranging from poor internet connection to now competition.
Jumia investors have experienced a couple of twists and turns since the stock debuted in New York last year. Allegations of corruption, persistent losses in the Nigerian business and a damning short-seller report contributed to an initial share-price slump. But the coronavirus outbreak has helped to greatly increase market value this year.
It was reported earlier that one of the early investors in Jumia, MTN Group Ltd, was considering selling its stake in the business. Reacting to this, Poignonnec disclosed that Jumia may offer MTN’s shares as part of a potential new equity offer within the next 3 years if the Johannesburg-based firm decides to sell.
He also revealed that expanding into food delivery business has helped to increase Jumia’s sales and footprint in its African markets, which are led by Nigeria. This includes grocery and pharmacy orders as well as restaurants takeaways.
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The logistics business unit of Jumai is another revenue stream as it is also now open to third parties who wish to use the firm’s network of drivers to deliver packages.
Jumia confirms COVID-19 lockdowns did not help e-commerce revenues
Africa’s leading e-commerce firm Jumia released its second-quarter earnings on Wednesday showing it incurred a loss of Eur 37.6 million (N17.1 billion) in the second quarter of 2020 despite the rampaging effect of COVID-19.
According to Jumia, it did not experience any “meaningful change in consumer behavior” following the COVID-19 induced shutdown.
Contemporary views suggest e-commerce firms were one of the winners in the ensuing COVID-19 pandemic induced lockdown. However, the company reported significant challenges to its operations. Here is how Jumia responded;
- In Nigeria and South Africa, we faced significant disruption as a result of movement restriction.
- This disruption persisted during the early part of the second quarter of 2020, before gradually easing towards the later part of the quarter.
- Our food delivery business, Jumia Food, which was negatively impacted by restaurant shutdowns starting mid-March, resumed normal operations in late May/early June in most cities where we operate the service.
- Across the majority of our addressable market, we experienced no meaningful change in consumer behavior, aside from increased demand for essential and every-day products and reduced appetite for higher ticket size, discretionary purchases.
- The nature of lockdown measures put in place consisted mostly of localized restrictions of movement and partial curfews rather than nationwide lockdowns, with the former leading to less drastic changes in consumer lifestyles and behavior than all-encompassing, nationwide lockdowns.
What this means
Jumia’s revelations confirm fears that the COVID-19 lockdowns may not have positively impacted on the e-commerce sector whose business model requires that their gross merchandise volumes increase for them to improve margins.
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However, by confirming that Nigerians focussed more on essentials, the negative impact of the COVID-19 appears to be more severe than even expected.
Nigerians are perhaps also cautious about their spending, avoiding expenditures that do not speak to their immediate need such as food supplies, medicare, and utilities.
Jumia reports N17.1 billion loss in Q2 as COVID-19 fail to boost revenue
Jumia reported a loss after tax of Eur 37.6 million (N17 billion) in the second quarter of 2020.
One of Africa’s leading e-commerce companies, Jumia reported a loss after tax of Eur 37.6 million (N17 billion) in the second quarter of 2020 despite the rampaging effect of COVID-19.
E-commerce firms were expected to be one of the major beneficiaries of COVID-19 pandemic as consumers gravitated to online orders to meet essential needs.
The losses were a much improvement from the Eur 66.7 million loss reported in the same period in 2019 as Jumia strives to dig itself out of massive loss hole. However, the losses wiped out Jumia’s revenue of Eur 34.9 million reported in the quarter under review.
On Customer Acquisition, Jumia reports it now has 6.8 million active customers as in the second quarter of 2020 up 40% when compared to the same quarter in 2019. Orders also reached 6.8 million up 8%, while GMV was €228.3 million, down 13% on a year-over-year basis.
Jumia explained the results as follows;
“We have made significant progress on our path to profitability in the second quarter of 2020, with Operating loss decreasing 44% year-over-year to €37.6 million. This was achieved thanks to an all-time high Gross Profit after Fulfillment expense of €6.0 million and record levels of marketing efficiency with Sales & Advertising expense decreasing by 51% year-over-year,” Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia.
He continued, “We are navigating these uncertain times of COVID-19 pandemic with strong financial discipline and operational agility which positions us to emerge from this crisis stronger and even more relevant to our consumers, sellers, and communities.”
A cursory look at the results reveals Jumia reported revenue of Eur 34.9 million compared to Eur 38.8 million same period in 2019. Whilst Jumia reported significant revenue growth in key Platform revenue segments such as Commissions, Fulfillment, Marketing & Advertising it lost big in its First Party revenue. The First Party revenue are closed sales leads generated when customers directly visit an e-commerce website or call or contact them directly to make purchases.
Jumia reported that First Party revenue fell a whopping 49.1% YoY to Eur 11 million compared to Eur 21.6 million the same period in 2019. Despite the drop in revenues, Jumia experienced a growth in gross profit as a change in its business model helped reduce the direct cost of sales. In the quarter under review, gross profit rose 38.2% to Eur 23.3 million.
The company claims cost-cutting was driven by cost efficiency initiatives. For example, it explains that it “changed the volume pricing model from a price per successfully delivered package to a price per successful stop which led to a c. 8% reduction in cost per order for a given route. Our third party logistics partners are now paid per successful stop at customer address, regardless of the number of packages included in the delivery”.
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It also claimed it adopted a mother-daughter warehouse system which brings warehouses stocked with “essential products” closer to customers helping reduce last-mile delivery cost.
Jumia’s Ebitda closed at Eur 32.9 million compared to Eur 44.4 million the same period last year representing a 25.9% drop in Ebitda losses. Jumia’s accumulated losses are now a staggering Eur 1.17 billion while its net assets are just Eur 108.4 million. Jumia’s loans total about Eur 10 billion.