ShopClues on Thursday announced its merger with Singapore-based e-commerce platform Qoo10 in a stock deal.
The deal will facilitate more than 7,00,000 small and micro-merchants from ShopClues to access global markets via Qoo10’s presence in Southeast Asia, the Gurgaon-based company said in a statement. Qoo10 services small and medium enterprises through its localised online marketplaces in Singapore, Indonesia, Malaysia, China and Hong Kong. As for Qoo10, the partnership will give its merchants access to a vast Indian market. The company’s cross-border logistics business can also leverage the same. Qoo10 further plans to expand into other Asian countries.
“This partnership presents new strategic opportunities for both companies, as it opens up cross border opportunities for consumers and sellers across Asia. The merger has been approved by board of directors and major shareholders of both the companies,” ShopClues said.
Earlier this year, Shopclues had approached Snapdeal for a buyout but the talks failed because of the company’s heavy accumulated liabilities. Sources earlier told FE that Shopclues had not been paying vendors and had instead been holding the cash to fund daily operations. It ships about 10,000-15,000 orders on an average per day. Snapdeal, which focuses on similar markets (tier II, tier III cities and beyond), ships about two lakh orders a day, a source said.
ShopClues that last raised about Rs 110 crore in funding in 2018 from existing investors posted losses of over Rs 200 crore in the year to March 2018. In FY17, losses stood higher at Rs 347.15 crore, according to data sourced from business intelligence platform Tofler. The firm reported losses of `383.05 crore in FY16 while in FY15, the losses were over `100 crore. Revenue from operations came in at a mere Rs 271.29 crore in FY18, the data showed.
Founded in July 2011, the firm has managed to raise only $255.9 million in funding, according to data from Crunchbase. The company let go of some employees working in consumer-centric departments earlier this year.
A senior employee who left the firm in early July had earlier told FE that in May, the management at ShopClues communicated the company was “evaluating three partnerships” — one with Snapdeal and other two partners (details of which were not revealed) for a potential acquisition. The management also said they were looking at possibilities of an “external funding” for sustenance.