Ensogo, a leading e-commerce site in Southeast Asia offering cheap deals, announced it has closed its overall operation, including the one in Thailand, on Tuesday - leaving many customers unsure where they stand.
An official statement sent via Ensogo Thailand said: “Ensogo Australia, an ASX-listed holding company, today announced it will no longer provide financial support to its subsidiary Southeast Asian flash sales and marketplace business units. These business units will be shut down. All staff have been informed and communications will be made to customers in the coming days.”
The statement said Ensogo Australia’s board accepted the resignation of the CEO, Kris Marszalek. It said the decision was made to preserve the company’s cash holding for new investment opportunities.
The company in Thailand could not provide further information, as it was still waiting for instructions from the head office in Singapore. Consumers who earlier have bought cheap deals for restaurants, accommodation or other services have to wait for further announcements.
Ensogo advertised as offering products and services to customers, who bought its coupons at cheap rates to redeem for services.
Its three best-selling product lines on the Thai market were health and beauty, house and garden, and IT gadgets. Restaurants, beauty and health, and travel were the best-selling services.
According to Ensogo Thailand in September 2015, Thailand was one of the group's three largest markets.
The shutdown decision was very sudden. Only last month Engoso Thailand announced it was boosting its presence in its own e-marketplace by focusing on supplies from both local and foreign sellers, who could make cross-border deliveries.
Ensogo Thailand shifted to the business-to-consumer (B2C) model late last year to allow the company to scale rapidly and operate globally, Jutharat Piboonthamasak, managing director of Ensogo Thailand, said at the time.
Ensogo Thailand had around 2 million product items, and had planned to offer as many as 5 million by the end of 2016.
The Ensogo Group earlier set the goal of becoming a leading lifestyle shopping marketplace in Hong Kong, Thailand, Singapore, the Philippines, Indonesia and Malaysia, with a combined 500 million potential users.
Formerly known as iBuy, Ensogo owns a network of e-commerce websites in Hong Kong, Singapore, Malaysia, the Philippines, Indonesia and Thailand. It was founded by entrepreneur Patrick Grove of Catcha Group, who also established online businesses iProperty and iCar.
Ensogo launched as a daily deals website around 2010. Then in late 2015, it began to transition to what it called a “game-changing” shift for the business — a mobile marketplace.
Pawoot Pongvitayapanu, president of the Thai E-commerce Association, said the industry is transitioning, with more consolidation to come. Ensogo’s main regional rival is Lazada, owned by Alibaba.
“Only big players with a healthy financial status can survive in the hyper-competitive market,” he said. “The flash sales market eroded margins but earned no customer loyalty.”
Earlier this year, Rakuten sold off its share from Tarad.com and shutdown operation in Southeast Asia. There is a rumour that Ascend Group might slowdown of its e-commerce and focus more on other related businesses.
Another e-commerce source who ask not to be named said e-commerce is growing fast and getting very competitive. There will be more consolidation or the need for more capital to compete for the consumer share of wallet.