In October, we published an article on the viability of Ezbuy facing an onslaught of Taobao entering Southeast Asia through Lazada.

Now in the light of news that the Ezbuy accounts on Taobao has been suspended, we sounded almost prophetic.

Why would Taobao do it now, during the high season of 11.11? Well – to ensure Lazada gets all the sales.

From Taobao’s point of view, it probably does not make much difference whether the sale is done through Ezbuy or Lazada; however, for Alibaba Group as a whole, it makes much more sense to ensure Lazada gets all it can during the 11.11 selling season.

It will look good on Alibaba’s books, and give investors and other stakeholders a shot of confidence about Alibaba’s global strategy.

What Ezbuy should have done

When Ezbuy received US$20 million investment from VKC (founded by ex-Alibaba CEO David Wei), a mandate was to transform from a shopping and shipping agent into an ecommerce platform.

As most of its volume came from Taobao, the risk was obvious. Taobao explored entering Southeast Asia directly (in which case Ezbuy, being a Singapore market expert, could become a potential partner); however, Alibaba Group’s decision to acquire Lazada changed the dynamics completely.

The likes of Ezbuy became even more redundant from Alibaba’s point of view.

What Ezbuy should have done is obvious: become a platform, which was already part of the strategy.

With Taobao being dominant in China, there was no way it could diversify through shopping and shipping for other platforms. The only viable option was acquiring sellers to list on Ezbuy directly.

Something Shopee and Philippines’ bigmk.ph have been aggressively doing.

Ezbuy somehow didn’t (or didn’t manage to) do it.

What a shame!

Crisis management

So what was bound to happen has happened, what is the response?

In the Channel NewsAsia news article:

Ezbuy’s co-founder Wendy Liu said the company would not be issuing a statement.”

What it should have done was actively reaching out to media before any news report came out, and offer their version of the story as well as a commitment to the customers.

Instead, it not only missed the opportunity to avoid a crisis, but also actively rejected an opportunity to set the tone in the media and rally the support from the public.

I wonder how David Wei thinks now.

 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.