Vietnamese e-commerce startup Leflair suspends local operations

Photo by Evan Wise on Unsplash.

Vietnam’s competitive e-commerce landscape has taken its toll on niche marketplace Leflair, which has decided to suspend its local business operations for a year.

Local media outlet CafeBiz first reported this development.

Leflair, which sells high-end products, has ceased its local business operations as part of a business model shift, co-founder and CEO Loic Gautier told DealStreetasia. He added that the startup would focus on “less capital intensive” parts of the business.

Gautier said the startup will retain its cross-border e-commerce business, fulfillment centre in Singapore and the newly-launched Philippine operations.

The change in business model is expected to help Leflair’s operation to become “leaner,” with the ability to “change faster,” the CEO said.

In a letter to merchants, as cited by CafeBiz, Leflair said, “The changes in the investment landscape for startups have resulted in difficulties for Leflair in pursuing the current business strategy. Under a capital crunch and requirement for cutting costs, we have to come up with the tough decision to cease our operations in Vietnam.”

Gautier confirmed sending the letter to merchants announcing the move.

Founded in 2015 by former entrepreneurs of Rocket Internet, which sold its Lazada unit in Southeast Asia to Chinese giant Alibaba, Leflair targets the rising middle class in Vietnam who are willing to pay for premium products.

It most recently raised $7 million from Belt Road Capital Management and South Korean retailer GS Shop. The round marked the second Vietnamese investment for the Mekong region-focused fund and the first direct investment by GS Shop, a limited partner of 500 Startups Vietnam, which itself is an early backer in Leflair.

Leflair had also raised about $5 million from investors including Capital Management Group, AME Ventures, Hong Kong-based Caldera Pacific and international angel investors.

Vietnam’s e-commerce landscape has seen several instances of companies merging or winding up operations in recent years.

Local conglomerate Vingroup and South Korean chaebol Lotte merged their marketplace websites with other units, claiming to pursue the new retail model.

While Vingroup merged the Adayroi website with its fintech arm VinID, Lotte merged the marketplace with SpeedL, the online version of its supermarket chain.

MobileWorld Group shut down its e-commerce unit Vuivui.com while Thai Central Group’s Robins Vietnam closed its online fashion store. Furthermore, Vietnam witnessed a spate of closures including Beyeu, Deca, Lingo, Hotdeal and Muachung back in the 2016-17 period.

 

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.