As a part of the strategic tie-up, Ensogo will have access to Vipshop’s vast volume and selection of existing inventory, available for immediate shipping, Catcha Group said in a statement.
The new founded partnership between the companies will additionally include cooperation in the areas of logistics, merchandising, technology, marketing and user acquisition; the very expertise, which enabled Vipshop to scale its revenues from $32 million in 2010 to $3.77 billion in 2014, the tech investment firm said.
Singapore-headquartered Ensogo is the top e-commerce player in Southeast Asia.It anticipates that the improved product offering and shared knowledge will significantly help drive top line and reduce the time needed to achieve profitability.
As of December 2014, Vipshop held over $500 million of fast-rotating inventory at its state-of-the-art distribution centres totaling over 1 million sq metres. The company achieved profitability in 2013.
Vipshop listed on the New York Stock Exchange in March 2012 at $0.65, but trades 5000 per cent higher at $25.37 today. The e-commerce company was the second best performer among Chinese companies trading in the United States last year, and has kept its focus on flash sales in the China market.
Ensogo listed on Australian Securities Exchange in December 2013, targeting flash sales in Southeast Asia and Hong Kong. Ensogo’s gross turnover in 2013 was AU$75.5 million, which doubled to over AU$150 million in 2014.
Shares of Ensogo rallied 18.75 per cent on the news of Vipshop’s investment, increasing it’s gains for 2015 to 235 per cent.
Ensogo chief executive officer Kris Marszalek said the team believed the long-term perspective for the partnership, which will allow both parties to generate positive synergies between businesses in the future. “We look forward to working with the Vipshop team to help further strengthen and develop Ensogo’s business throughout Southeast Asia,” he added.
Ensogo has operations in Singapore, Hong Kong, Malaysia, Philippines, Indonesia and Thailand.
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Ensogo also released its annual appendix 4E for the period January 1 to December 31, 2014 which showed that its pro forma gross turnover increased over 100 per cent on the prior corresponding period to $152.3 million.
Revenue was $64.8 million while EBITDA was $(16.8 million) and the company incurred an after tax loss of $(67.4 million) after an impairment of approximately $(47 million) to align its balance sheet as a result of the strategic investment from Vipshop Holdings Ltd.
Marszalek commented that 2014 was a year of significant investment for Ensogo, having expanded from three markets (Singapore, Hong Kong and Malaysia) to six (adding Thailand, Philippines and Indonesia).
“In the process, Ensogo more than doubled our gross turnover and laid strong foundations for growth in 2015 and profits in the near future.”
He added that the company was “well-positioned” for 2015.
Over the past 12 months, Ensogo has made the move from five technology platforms to the single Ensogo: Edge unified IT platform; unified of the company under a single Ensogo brand across the region; improve the cost structure and the realisation of significant headcount and operating expenditure reductions; as well as strengthened the management team with appointments of a new CEO, CFO, CTO and Chief Logistics Officer (CLO).