Rocket Internet Folds Consumer-To-Consumer Marketplace

For all its explosive growth, especially in Southeast Asia and other emerging markets, not everything Rocket Internet touches turns to gold. On Wednesday (March 11), Rocket said it will shut down its consumer-to-consumer marketplace Lamido and merge its 2,500-plus merchants into a larger Rocket e-commerce business, Lazada, Tech in Asia reported.

Rocket is positioning the shutdown as a spin-back-in, since the eBay-like Lamido was originally launched in 2013 by the more brand-oriented Lazada, according to Lazada Group CEO Maximilian Bittner.

“Lamido was a Lazada venture originally set up to offer a consumer marketplace platform separated from Lazada,” Bittner told Tech in Asia. “Over the last year, third party sales have become the dominant driver of Lazada’s sales explosion with the share of third party sales growing from less than 10 percent, at the time of Lamido’s launch, to 75 percent today. With the rapid growth of both Lazada and Lamido marketplaces, we have experienced an increasing overlap between the customer and seller bases across the two platforms.”

That means combining the platforms is natural, Bittner said, adding, “The integration will not only accelerate the expansion of our assortment, but also give our buyers and sellers a better experience. We believe the future is in a controlled marketplace like Lazada’s as consumers expect an effortless and reliable shopping experience.”

Lazada plans to absorb all of the smaller company’s employees. For customers in Indonesia, Malaysia, the Philippines and Vietnam, where Lamido operates, the shift to Lazada shouldn’t be unreasonably confusing either, since Lazada is “arguably one of the more dominant business-to-consumer e-commerce sites in all of Southeast Asia,” according to Tech in Asia.

But the Southeast Asia e-commerce retrenching is one of several shifts in how Rocket does business in the months after its Oct. 2 IPO. As a private company, the Samwer brothers’ incubator was widely viewed as an aggressive cloning factory for every successful startup idea. But post-IPO Rocket is now doing mergers, both of its own companies and with competitors such as Australia’s GetPrice, which Rocket’s PricePanda wasn’t able to budge from its position as the top price-comparison search engine Down Under.