Last year, Zalora had pulled out its services from two Southeast Asian markets, namely, Vietnam and Thailand. Reports suggest Zalora is in conversation with retail group Indonesia-based MAP for a possible controlling investment or acquisition.
MAP, listed on the Indonesian Stock Exchange, has about 2,000 retail outlets in the nation, including departure stores, fashion outlets. The transaction with Zalora would see MAP venture into online commerce.
Indonesia is touted as Southeast Asia’s largest growing economy, and is regarded as the hub for rising businesses competing with all their might. With SoftBank, Sinar Mas, Sequoia, pumping huge capital in different firms specializing in online commerce, it would be interesting to see how MAP and Zalora proceed post the deal.
Zalora, Rocket Internet’s online fashion platform was founded in 2012. Having raised over $200 million, later in 2014, Rocket Internet created Global Fashion Group which took over the reigns. Under GFG’s leadership, contrary to expectations, Zalora struggled to show positive developments which even resulted in exit of its executives, MD and a co-founder. On the other hand, even GFG’s valuation went down to $1.1 billion from 3.4 billion.
Zalora’s retreat from these countries comes off as a major disappointment for Rocket Internet.
The news comes just a day after conglomerate Ayala Group was seen buying a 49 per cent stakes in BF Jade E-Services Philippines Inc., which owns and operate the Zalora brand in the Philippines.
The Group will acquire a 49 per cent of Zalora. The Ayala Corporation itself has bought a 43.3 per cent stake in Zalora, whereas its other subsidiaries Ayala Land, BPI Capital and Kickstart Ventures have bought smaller stakes. The public SEC filings mentions Ayala Land purchased a 1.91 per cent stake. Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala, was quoted saying,
We see the potential of e-commerce in the country and believe that the Ayala group can benefit and add tremendous value to ZALORA. With resources in banking, real estate and telecommunications, the investment presents new opportunities for Ayala to generate synergies throughout the e-commerce value chain.
