E-Business
Falling Sales, Naira Devaluation Hobble Rocket Internet’s Growth
When German e-commerce investor Rocket Internet launched Jumia in 2012 as a would-be African Amazon, it was optimistic that a rapidly expanding middle class would quickly shift from street markets to shopping online.
Reuters however reported that four years on, falling sales for sites like Jumia and slower growth from Nigeria to Russia and Brazil is casting doubt on Rocket Internet’s ambition to become the world’s biggest Internet company outside the United States and China.
Jumia made a loss of 17 million euros ($18.8 million) in the first three months of 2016 on sales that fell more than a third.
The devaluation of Nigeria’s naira last week is a new blow for Jumia, which now operates in more than 20 countries in Africa.
Revenue growth has also slowed at most of Rocket Internet’s other 11 leading start-ups, ranging from furniture e-commerce and food delivery in Europe to online fashion in markets from India to Latin America and the Middle East.
That is the consequence of Rocket’s shift to rein in spending on marketing and logistics as it seeks to stem losses which it said peaked at 1 billion euros in 2015.
As a result, shareholders have cast doubt on the valuation Rocket has put on its portfolio and questioned the strategy of sending business school graduates to set up 150 start-ups in more than 110 countries in just a few years.
Exclusive interviews with shareholders reveal growing scepticism about Rocket’s sprawling empire as emerging markets sour and technology stocks cool. Its share price has fallen 39 percent this year.
“People have started to question whether the company portfolio is really as good as we first thought,” said a top 20 shareholder, who declined to be named as they expect to trade stock. “A lot of trust has been destroyed over the last 12 months.”
Founded in Berlin in 2007 by brothers Oliver, Alexander and Marc Samwer, Rocket Internet aims to replicate the business models of Amazon, China’s Alibaba and ride service Uber in new markets.
With few other tech companies listed in Europe, investors jumped at the opportunity to gain exposure to an array of fast-growing businesses when Rocket went public in 2014, pushing the stock up by more than 50 percent in the first few months.
However, the stock has been on a downward trajectory since peaking in February 2015 after it surprised investors with a new capital hike and shifted strategy to invest in the food delivery business in developed markets.
The latest share price tumble started in April when Sweden’s Kinnevik, Rocket’s second-biggest shareholder after the Samwer brothers, slashed the valuation for its emerging market fashion websites by two thirds.
That unsettled investors, especially after Kinnevik said its representatives were stepping down from the board, citing potential conflicts of interest over future investments.
Kinnevik, which has hedged its bets on Rocket in Africa by investing in Jumia’s main rival Konga, declined to comment for this article. It has said it will work closely with Rocket although it could review its stake in two or three years.
Martin Weber, a partner at venture capital firm Holtzbrinck, which has a 1.9 percent Rocket stake, says the company has struggled to provide enough information about its holdings.
“The stock market loves transparency. And that is not practically possible at Rocket,” Weber told Reuters. “Rocket needs to prove that it can get profitable companies on their feet.”
Samwer has admitted Rocket had initially done too little to communicate with investors after the firm went public, but he is not worried about the share price.
“We planted a lot of seeds and I believe in the next 24 months a lot of investors will see it the same way,” he told a Berlin tech conference this month.
He says the sale in April of Lazada – Rocket’s loss-making Amazon clone in Southeast Asia – for $1 billion to Alibaba underlines the logic of going into frontier markets before more established rivals.
Some investors are prepared to give him more time.
“We believe that the portfolio is worth a lot more,” said Ralph Dommermuth, chief executive of United Internet, Rocket’s third-biggest shareholder, even after he took a 157 million euro writedown on his firm’s Rocket stake in May.
“Among European investors in young Internet firms, Rocket Internet is the broadest and has the most experience in the sector.”
CEO’S PROMISE
Rocket now has a market capitalization of 3 billion euros, well below the 5.3 billion valuation it put on its portfolio at April 30, and only just above the 2.8 billion in cash held by Rocket and its operating companies as of March 31.
Most Internet start-ups burn cash in early years as they pour money into marketing, logistics and technology to pursue revenue growth above all else, hoping to move into the black once they reach scale.
That approach has worked for the likes of Amazon, Alibaba and European online fashion site Zalando.
Neil Campling, head of technology research at Northern Trust Capital Markets, who rates the stock a “sell”, doubts the Rocket businesses can replicate Amazon’s success because their markets are so underdeveloped and the cost of logistics so much higher.
“As soon as they reduce marketing, you see revenue growth decline substantially,” he said. “They haven’t got the scale.”
However, Samwer says Rocket has more than enough capital to fund its main start-ups until they turn profitable.
Samwer promised last September to make three start-ups profitable by the end of 2017, with Middle East fashion site Namshi, online home furnishings store Westwing and food takeout firm Delivery Hero seen as the most promising.
Jumia, which predicted in late 2013 it could turn a profit within 18 months, is far from that goal. It lost 111 million euros in 2015 on sales of 135 million.
But Jumia Nigeria CEO Juliet Anammah believes the company can make a profit within three to five years. “Africa is a long-term play,” she said.
Samwer has now changed tack for his Amazon clones, shifting from buying and shipping their own stock – more suited to countries with well-established logistics – to providing a commission-based marketplace for third-party retailers, like Alibaba.
“You are tapping into the supply capacity that exists in the country. So you are not dependant exclusively on your working capital to source and bring in retail products,” Anammah said.
Samwer remains optimistic for Jumia.
“The people are still there even if emerging markets are cold… They still have some money,” he said. “The offline to online shift continues.”
Nigeria Data Protection Commission (NDPC) has directed all Data Controllers and Data Processors of Major Importance (DCPMIs), yet to register with the commission to do so immediately.
This followed a Federal High Court judgment affirming NDPC statutory powers to designate and register such entities.
DCPMIs are entities operating in Nigeria that handle sensitive personal data or large volumes of information, requiring mandatory registration with the NDPC under the Nigeria Data Protection Act (NDPA).
In a statement issued on Tuesday by Babatunde Bamigboye, head of Legal, Enforcement and Regulations at the NDPC, described the judgment as a major milestone for data accountability and regulatory oversight in Nigeria.
The commission said the ruling arose from a suit filed by Emmanuel Harunna against the NDPC in Emmanuel Harunna v. NDPC (FHC/L/CS/1116/2024), in which the applicant sought a declaration that Point of Sale agents were not Data Controllers or Processors of Major Importance under the Nigeria Data Protection Act and requested a perpetual injunction restraining the commission from registering them.
According to the statement, Justice F.N. Ogazi examined the commission’s Guidance Notice on Registration alongside Sections 5(d), 6(c), 44, 45 and 65 of the Nigeria Data Protection Act before concluding that the commission acted within its statutory powers in designating entities under the Major Data Processing – Ordinary High Level category as Data Controllers and Processors of Major Importance.
Quoting the judgment, the statement read, “The Nigeria Data Protection Act was enacted to promote accountability, transparency and responsible data governance. Registration enables the Respondent to identify entities engaged in significant data processing activities, monitor compliance.”
It added that the court held that, “Far from undermining the constitutional right to privacy, the registration framework is one of the statutory mechanisms designed to safeguard that very right by subjecting data controllers and data processors to effective regulatory oversight.”
The statement further quoted the court as saying, “Looking at the recitals of the Guidance Notice, there is every indication that the Guidance Notice is also aimed at protecting the privacy and security of data subjects, thus bringing the registration requirement of the Guidance Notice within the protective shield of Section 45 of the 1999 Constitution.”
According to the commission, the court also held that, “Remarkably, Section 63 of the Data Protection Act provides that the provisions of the Act shall prevail over any other law inconsistent with its provisions on matters relating to the processing of personal data.”
Reacting to the judgment, the commission described the decision as a significant boost to Nigeria’s data protection regime.
“The Commission appreciates the ground-breaking efforts of the court towards the advancement of the jurisprudence relating to data accountability in Nigeria, as eloquently demonstrated in this case,” the statement read.
Following the ruling, Vincent Olatunji, national commissioner and chief executive officer, had directed every Data Controller and Processor of Major Importance that had yet to comply with the registration requirement to register without delay.
The commission warned that entities failing to comply with the registration requirement could face legal consequences.
“Failure to register creates serious legal liabilities under the law, while compliance with registration requirements builds public trust and safeguards the fundamental rights and freedoms of data subjects in Nigeria,” the statement added.
The University of Nigeria (UNN) is set to partner with The Roxettes Group to establish a research and innovation centre focused on artificial intelligence (AI), smart and green mobility, and digital technologies, in a move aimed at strengthening research, entrepreneurship and technology-driven industrial development.
Chairman of The Roxettes Group, Arc. Dr. Kaycee Orji-Kelechi, announced the proposed partnership while delivering his acceptance speech after receiving an Honorary Doctor of Business Administration (Honoris Causa) during the university’s convocation ceremony.
The proposed facility, to be known as the Dr. Kaycee Orji Centre for Artificial Intelligence, Smart/Green Mobility and Digital Innovation, is expected to provide a platform for research, innovation and collaboration between academia and industry, with a focus on developing commercially viable solutions to local and continental challenges.
Orji-Kelechi said the initiative was conceived as a long-term investment in human capital and technological advancement rather than simply another physical infrastructure project.
He said the vision was to position the University of Nigeria among Africa’s leading institutions in artificial intelligence, smart mobility and digital innovation through research, entrepreneurship and technology development.
According to him, the centre will house five specialised laboratories covering artificial intelligence and machine learning, smart and green mobility, robotics and the Internet of Things (IoT), digital finance and financial technology, as well as cloud computing and advanced data centre technologies.
He also announced plans for the proposed Kaycee Orji Founders Innovation Challenge, an annual programme intended to identify, mentor and support innovative ideas from students, researchers and academic staff with the potential to become scalable businesses.
“Every student of this University should know that a great idea conceived in a classroom should have a pathway to becoming a patent, a startup, a global enterprise, and a solution that transforms society,” he said.
Orji-Kelechi disclosed that preliminary conceptual work on the project had commenced, with architectural and engineering designs being prepared by K.KH Contractors Ltd., a subsidiary of The Roxettes Group.
He added that discussions with the university would begin on identifying a suitable site for the project, while a comprehensive proposal containing architectural drawings, engineering designs and an implementation framework would be submitted after completion of the design phase.
Reflecting on his career, Orji-Kelechi said Africa must move beyond consuming innovation to creating it through investment in manufacturing, technology and entrepreneurship.
“We have pursued one simple vision: that Nigeria and Africa must move from consumption to production; from importing innovation to creating it; and from waiting for opportunities to building them,” he said.
He urged graduating students to see their education as a foundation for solving societal challenges through innovation, leadership and enterprise, adding that he remained committed to promoting industrial development, youth empowerment and sustainable economic growth.
The proposed collaboration forms part of broader efforts to strengthen university-industry partnerships, which are increasingly seen as critical to improving research commercialisation, innovation capacity and technology-led economic development in Nigeria.
National Population Commission (NPC) has announced commencement of full digital registration of births and deaths through the VitalReg platform, which became operational nationwide on July 1, 2026.
Chidi Ezeoke, federal commissioner representing Anambra, disclosed this in Awka during a press conference to announce commencement of full digital birth and death registration under the Electronic Civil Registration and Vital Statistics (E-CRVS) system and the marking of World Population Day commemorated every July 11.
He revealed that a total of 131 registration centres had been opened in the 21 local government headquarters and several communities in the state, adding that more centres would be opened later.
Ezeoke described the initiative as a major milestone in Nigeria’s Civil Registration and Vital Statistics (CRVS) system, to ensure every birth and death in the country was captured through a digitally enabled registration platform.
“It builds on the launch of the E-CRVS system and the inauguration of the National Coordination Committee on Civil Registration and Vital Statistics by President Bola Tinubu on Nov. 8, 2023.
“A total of 4,011 functional registration centres has been established across the 774 LGAs of the federation and the commission iswas working to expand the number to about 8,000.
“In Anambra, 131 registration centres have been opened in the 21 local government headquarters and several communities. More centres had been proposed for the state,” he said.
According to the Commissioner, the VitalReg platform would provide faster registration services, 24-hour online access, digital certificate issuance where applicable, reduced paperwork and waiting time, improved data validation and a more secure national CRVS database.
While noting that the platform would serve as a foundational database to support other national data systems and strengthen interoperability across Nigeria’s digital identity ecosystem, Ezeoke urged Nigerians and other stakeholders to support the initiative by ensuring prompt registration of all births and deaths.
Speaking on the 2026 World Population Day themed, “Realising the Hopes and Aspirations of Young People – Today and for the Future”, the Commissioner called for greater investment in education, healthcare, skills development, decent employment opportunities and youth participation in governance for sustainable national development.
Earlier, Mr Obiakonwa Okagwu, state director, NPC, said the occasion served as a reminder of great opportunities provided to harness young people’s capabilities, which he said would shape the future of the country when adequately harnessed.
He called on residents to take registration of births and deaths as national responsibility, just as he urged the media to take the message on civil registration to all parts of the State.
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