Aditya Birla to exit online space with Abof.com closure

Aditya Birla Group’s ecommerce platform Aditya Birla Online Fashion (Abof.com) is the latest victim to go down in India’s online battle as the firm has decided to shut operations and exit the online space, sources told the Economic Times.
 
abof.com

The firm was unable to match the heavy discounting models offered by leading online fashion retailers like Flipkart, Jabong, Myntra and Amazon resulting in poor sales which forced the company to take this drastic step.
 
The company is likely to shut down its operations by end of this year and all the employees of the ecommerce portal have been informed about the closure.
 
The group’s decision to exit the online market is more shocking as earlier in the year its CEO Prashant Gupta had said that he expects business to grow by about three times from existing levels and was eyeing a market share of about 10-15 per cent in the next three years.

However, over the last few months ecommerce giants like Flipkart and Amazon have invested heavily to scale up its operations and offering heavy discounts which are wiping out some of the smaller players. Flipkart along with its subsidiaries Myntra and Jabong dominates the online fashion market with around 70% market share while the other 30% is with Amazon, Snapdeal, Paytm & others
 
Santrupt Misra, HR director at Aditya Birla Group, confirmed the group’s exit from online retail space to the Economic Times. “Looking at how the big and long term ecommerce businesses continue to struggle and are unlikely to make money for some time, it did not seem logical to continue as if everything is all right in the sector,” he told the newspaper.
 
He added that all the 240 employees of Abof will be given four and-a-half months’ salary as compensation, in case they wish to quit the company.
 
Abof launched in October 2015.  The online fashion store retails about 125 brands that include Bollywood actor Shahid Kapoor’s Skult and Forever 21.

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