Zalora is reported to be in talks of an acquisition with Indonesian retail giant MAP Group
Rocket Internet’s fashion e-commerce platform Zalora has been reported to leave another two Southeast Asian markets, Indonesia and the Philippines, following its departure from Vietnam and Thailand.
The news came only one day after conglomerate Ayala Group has been reported to buy 49 per cent stakes in BF Jade E-Services Philippines Inc., which owns and operate the Zalora brand in the country.
A TechCrunch report stated that in Indonesia, Zalora is undergoing a similar fate as it is currently in talks for an acquisition with retail giant MAP group.
Zalora is under the management of Global Fashion Group (GFG), which was created by Rocket Internet in 2014 to manage its fashion e-commerce business across the world.
There has been several issues inside the management in the past few years, particularly over the direction that Zalora needs to take for its business in Asia. While GFG’s management believes in the greater potential of the Middle East region, Zalora’s management believes in staying in the Asia Pacific market where it saw a potential for profit-making.
e27 has been reaching out to Zalora and GFG for comments, and will update accordingly.
Consolidation is in fashion
In Indonesia itself, they year 2016 was proven to be a challenging one for fashion e-commerce startups operating in the country. Startups such as Berrybenka and SaleStock laid off a considerable amount of its employees, while smaller players such as Lolalola had been forced to close down business.
MAP Group itself has been known to make efforts to branch into e-commerce, with the launch of MAP EMALL last year. The group operates various department stores and fashion outlets, and it has partnership with global fashion brand such as Zara, and Marks & Spencer.
The deal is likely to be part of the company’s move to strengthen its foray into e-commerce; which, when combined with the group’s strong offline presence, might actually create a positive impact.
An O2O approach is believed to be working formula for some e-commerce platforms in the country, with Berrybenka CEO Jason Lamuda stating that the company’s pop-up stores were able to increase overall sales in a city by two to four times. It is also able to increase online sales for 1.5 to two times.
Image Credit: alenin / 123RF Stock Photo
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