Rocket Internet’s fashion e-commerce venture ZALORA has sold its business in Thailand to Central Group and the unit in Vietnam to Nguyen Kim Trading JSC, in which Central Group has a 49 per cent interest.
With this transaction, the German venture builder has terminated its presence in the Vietnam market, after selling a spate of other businesses, including Foodpanda to local rival Vietnammm and Lazada to China’s e-commerce giant Alibaba, and pulling hailing app EasyTaxi off the country.
Last month, Zalora was reported to dispose its operations in Thailand and Vietnam to Central Group, but representatives from both companies did not comment on the development. While ZALORA did not disclose the value of the deals, industry sources said each transaction was at about $10 million. But DEALSTREETASIA has not been able to independently verify this figure.
The sale comes despite, Rocket Internet’s ‘Global Fashion Group’ – the holding company that comprises brands such as Lamoda, Zalora and Jabong – having recently raised €300 million ($339 million) from Rocket and other exiting shareholders. But the new round only values the company at €1 billion, which is about a third of the valuation it had less than a year ago, when it raised €150 million. Besides, Rocket’s Jabong business in India,considered the next big market after China, has been up for sale for months but not finding buyers even after its valuation was dragged down by a tenth in just a year.
“We are extremely proud of how ZALORA Thailand and ZALORA Vietnam have contributed in the growth and vibrancy of e-commerce in their respective markets. (…) We are confident that Central Group and Nguyen Kim Trading can steer them to new heights,” said Michele Ferrario, CEO of the fashion e-commerce firm.
The sale of Thailand and Vietnam units will help ZALORA renew its focus on other Asian markets, including Singapore, Malaysia, Taiwan, Hong Kong, Philippines and Indonesia, the company said.
The deal also shows Central Group’s ambition to gain a significant footprint in Vietnam – it had recently sold 25% stake in hypermarket chain operator Big C Supercenter Plc in Thailand to its rival TCC Group, and it is learnt to have used the proceeds for acquiring Big C Vietnam from France’s Casino Group in a $1.1 billion deal.
The Thai retailer also did the Big C Vietnam deal in partnership with Nguyen Kim, which it had acquired earlier last year.
Apart from department stores, Nguyen Kim’s electronics retailing outlets, wholesale and supermarket chain and a hotel, Central Group also owns 30 fashion stores and an e-commerce platform in Vietnam prior to the completion of purchasing ZALORA divisions in the country.
In 2015, ZALORA had opened a brick-and-mortar store in Ho Chi Minh City to deal with the sluggish e-commerce business.
Doing e-commerce in Vietnam has not been a bed of roses, as a lot of local startups have failed and shut shops. Central Group-backed fashion stores and e-commerce biz relatively aligns with the “click-and-mortar” model of ZALORA in Vietnam.