Thai billionaire buys Zalora Vietnam for US$10 million
Rocket Internet has sold its business rights of Zalora Vietnam and Zalora Thailand to Thailand’s Central Group for US$20 million or US$10 million each, Techcrunch has reported.
Zalora and Central Group declined to comment on the information.
It is estimated that e-commerce accounts for about 3% of trade revenue in Southeast Asia. Internet use has increased but it is still a new segment and only a few retailers have infiltrated in this field.
The low percentage of e-commerce is a challenge for Rocket Internet. The company started with an ambitious goal, and ignored predictions of profitability and the necessary capital to maintain the network.
In mid-April, Rocket Internet agreed to sell 9.1% stake in Lazada to Alibaba for US$137 million dollars. The consortium of billionaire Jack Ma also invested another US$500 million in Lazada, though this business still incurs losses.
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Then some sources said that Rocket Internet wanted to sell a number of businesses of Zalora, including Vietnam, in order to reduce costs and to focus on the "nearly profitable" countries.
The latest financial figures of Rocket Internet show that revenue of Zalora increased 78%, to US$234 million in 2015. However, net loss increased to 36%, to US$105 million.
Along with The Iconic, Zalora is operating in 11 countries and territories across the Asia - Pacific region, including Indonesia, Taiwan and Australia.
In 2012, Rocket Internet took big steps to fill the gap of ecommerce in Southeast Asia, a market with 550 million people, with the absence of Amazon and eBay, when launching Zalora and Lazada. Both were expected to bring about high profits in 2015, but they incurred losses due to many reasons, including high initial goals and slow market growth.
The Central Group belongs to the family of Thai billionaire Chirathivat and is one of the largest retail groups in the region, with major operations in Thailand.
Central Group is trying to develop activities in Vietnam, Malaysia, Indonesia and several other countries. Assets of the Central Group, including many shopping malls and department stores, are worth nearly US$10 billion. It employs about 70,000 workers.
In January, the largest retail group of Thailand spoke about a plan to acquire the retail business of the Groupe Casino of France in Vietnam and Thailand, meaning the Big C supermarket chain.
Since late 2015 the Central Group has developed the retail brand of Robinson in Hanoi and Ho Chi Minh City.
