A year after launch, it has been recently speculated that Rocked Internet-backed Zalora, a fashion eCommerce site based in Singapore, may be shutting down its services in Taiwan. TechCrunch reported several circumstances indicating the branch’s closure may be imminent.
The Zalora Taiwanese website’s display reads that there will be no customer telephone services. In addition to the unusual online activity, Taiwanese TV news station, TVBC, reported that over 100 hundred Zalora employees were released last week and Zalora had also backed out of orders from their suppliers.
A spokesman from the Taiwan Zalora told TechCrunch: “To better serve Taiwan on its business operations model, the company has decided to conduct a review to make changes – From April, we are shifting part of Taiwan’s operations to our regional headquarters in Singapore. During this migration period, our company will temporarily disable operations of the Taiwanese site. We sincerely apologize for any inconvenience this may cause to our customers, and we promise that any returns and refunds will be processed as per the time period stipulated on our site.”
The representative added, “ZALORA TAIWAN denies any rumours regarding bankruptcy or closure.”
As part of the Samwer brothers’ Rocket Internet empire, Zalora also gives consumers tips on new styles and global trends. Zalora currently has operations in seven countries in South East Asia, which include: Taiwan, Philippines, Thailand, Vietnam, Indonesia, Malaysia, Hong Kong and Singapore. Zalora was founded in March 2012 and only last month received $26 million in funding from German investor Tengelmann.
Just this past September, Rocket Internet’s grip on Southeast Asia was called into question, indicating the Samwer brothers have been “notorious for their ‘ok, this done. Not working. Let’s kill it now’ strategy.”
The article from e27.co read: “The closing of four months old Home24.sg reveals one thing, Rocket Internet will not hesitate to pull the plug when it comes to evaluating a likely failure. As time passes, it became apparent that the strategy for Rocket Internet is somewhat similar to betting. For Rocket Internet, they clone proven business models and replicate them in other countries. For each clone, Rocket Internet puts in a huge amount of money into hiring as well as marketing. They only need a handful of their businesses to work. For clones that have low margins or those that are not doing very well, it will be shut down, alongside with all the employees.”
Rocket Internet’s track record has proven to be successful more often than not, however this sudden interruption and possible close out of Zalora Taiwan may be a red flag. It could signify that Rocket Internet’s handle on Asia may not be as secure as once thought.
If Zalora is in fact on it’s way out, Yahoo! Taiwan and PCHome would remain the two largest and most successful eRetailers in the Taiwanese eCommerce space. E27.co added that another player that has been catching up is Japan-based Rakuten, which recently inked a deal with Taiwan social food recipe sharing site iCook.
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