Aditya Birla’s online fashion store heading for a shutdown to be shut down

Aditya Birla Group has announced that it’s shutting down, the fashion portal it had launched in 2015. Abof — which stood was Aditya Birla Online Fashion — was meant to bring Aditya Birla’s offerings to the online world. The company’s move to the digital world was natural — Aditya Birla was already one of the biggest fashion retailers in the country, running brands like Allen Solly, Louis Philippe and Peter England. Abof sold Aditya Birla’s brands, as well as others such as Biba, FabIndia and Benneton.

But Aditya Birla Group now says it’s unwilling to keep making losses on its e-commerce business, unlike the other brands in the space. Abof held a town hall where it said that the site would be shut by 31st December, and employees who wished to quit could do so with 4 months’ pay.”Looking at how the big and long term e-commerce 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,” Santrupt Misra, HR director at Aditya Birla Group

Santrupt Misra, HR director at Aditya Birla Group, confirmed the group’s exit from online retail space. “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 said

Misra said all the 240 employees of Abof will be paid four and-a-half months salary as compensation, in case they are willing to quit the company.

Offers & Discounts Are Killing Fashion Ecommerce?

More than 60% of products offerd at are at discount. In March this year, chief executive Prashant Gupta had said that their “target consumer is not the guy who is looking for a deal”. If we take a closer look in online fashion and apparel industry, then we find that discounts and low brand loyalty are proving to be costly to industry as a whole.

Snapdeal had been on the discounting bandwagon until it ran out of cash, fired most of its staff, and cut the salaries of its founders. Aditya Birla has probably seen the writing on the wall — it will let the big players fight each other out until only a few companies remain, and will then reassess the need to enter the space.

The rest of the e-commerce industry, consisting mainly of foreign-funded startups, is meanwhile engaged in a frenzy of offering the best discounts to Indian consumers. For their Diwali sales, Flipkart and Amazon have been slashing product prices across their portfolios, and Paytm Mall has said it’s offering Rs. 501 crore worth of cashbacks. And these discounts aren’t coming cheap. Last year, Flipkart’s fashion arms Myntra and Jabong registered losses of Rs. 816 crore and Rs. 89 crore respectively. Amazon had overall lost Rs. 3,571 crore last year, and Snapdeal had lost Rs. 2,960 crore.

Is a combination of online and offline retail is the ultimate solution?

The idea of smart retailing in India is increasing but still there is a long way to go. However, the retailers should keep pushing for their necessary technology to increase customer awareness and reinvigorate the brand image to new edge customers. Creating one platform should function as the key to unlock smart shopping experience. Smartphones and gadgets have made IOE (Internet of Everything) very powerful than ever before in India and every coming year the advancement will continue to happen.

The benefit, finally, for retailers would be changing themselves in manners that customers should find complementing to their preference.Merging online and offline technologies create the much needed omnichannel retail experience – the one-stop solution that customers have started appreciating, increasingly.

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