This article was contributed by a tech veteran who was in the early team of Zalora but left before 2015. He said he wrote it in Apr 2019 but somehow did not publish. The recent events reminded him of this piece in his drive so he sent it to TLD.
The author welcomes any questions or debate through the TLD channel – email to email@example.com please.
I left tech a few years ago to pursue some more traditional (and profitable) business, but occasionally I receive tech headlines that are hard to comprehend.
This is the latest from TechCrunch: https://techcrunch.com/2019/02/11/zilingo-raises-226m/. Great – another unicorn in the making! Things were really going in leaps and bounds since I left!
But once I actually dig a little bit, I do not get it – what is this Zilingo? Is it elaborate fraud?
I quickly checked with some old buddies, a couple of whom are still in fashion ecommerce. They are (rather, have been) equally dumbfounded.
OK it claims to be a B2B business reforming Asia’s fashion supply chain. It has loans, photography, SaaS (free), and influence marketing services for merchants; it also runs their Asiamall platform (Alibaba for SE Asia), which has almost nil traction.
The B2C site is … rather mediocre. I do not understand what they investors had in mind when they put a lot of money with them.
I mean, take a look at their site (I chose Thailand because this is where they started, and supposed the most mature market for them):
How can any of these – the product mix/SKUs, the pricing and everything – generate revenue? In old Rocket lingo – this is PC1 negative (Profit Contribution 1 negative – i.e. GMV < cogs).
This looks like sourcing from Taobao and selling to SEA, but even that does not look like an adequate job. Many in the market are doing the same thing, just better.
As for Zilingo, they do not seem to be doing any market research at all, or probably do not bother with it.
And the B2B inventory and store look the same. Where does the revenue come from? How could they even get close to US$1m revenue?
I am not getting it
Chatted with friends who are selling and friends who are running logistics. They mentioned to me that Zilingo is not much tech – very manual marketplace, with many issues in fulfillment. Two of them told me that these are not growing pains, but issues which were totally disregarded as issues by the management.
I do not mean to be dramatic, and maybe I have lost my mind, but I really do not get it. I am sure I am not the only one.
Can anyone enlighten me/us please?