Jumia fired some of its employees in Nigeria and suspended a number with regards to improper sales practices. Jumia Technologies AG says it identified dubious transactions that accounted for approximately 4 per cent of its sales in the first quarter of 2019.
The Berlin Based company revealed that independent sales agents under its “J-Force” sales platform worked with employees and sellers to make undeserved gains from commissions and seller fees.
This news comes moments after Africa’s biggest e-commerce business announced €66.7 million (KSh7.6 billion) loss in the second quarter of 2019.
The company revealed that improper orders which were placed and subsequently cancelled inflated its order volume. However, the company claimed that fraudulent practices did not affect its financial statement.
Additionally, Jumia reports that it has adjusted its Gross Merchandise Volume (GMV) to account for the fraudulent transactions as well as suspended employees involved pending investigations.
The improper orders inflated the retailer’s GMV by around Ksh1.82 billion between the last quarter of 2018 and the first two quarters of 2019.
Reports of fraudulent actions at Jumia might worsen the company’s falling stock price which hit an all time low earlier this month.
Jumia’s losses increased by 60% from €41.9 million (KSh4.8 billion) in first half of 2018 to € 66.7 million (KSh7.6 billion) in the first half of this year.
