Aditya Birla Group's Abof.com fails to survive competition, to shut shop by year-end

The Aditya Birla Group is shutting down its ecommerce platform Abof.com by the year end, according to an ET report.

The platform couldn’t keep up against the heavy discounting model offered by Flipkart and Amazon in the ecommerce space.

Abof held a 20-minute town-hall meeting on Thursday and informed its employees that December 31 would be the last day of its operations.

“Looking at how 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,” said Santrupt Misra, HR director at Aditya Birla Group talking to ET.  

This is the second ecommerce venture closure for Aditya Birla. Last year, the company first announced that Trendin, the group’s online retail platform that sells brands such as Peter England, Louis Philippe and Allen Solly, will be spun off into separate portals, but later wound up the platform.

In October 2015, textiles-to-telecom conglomerate Aditya Birla Group entered pureplay ecommerce by launching fashion portal abof.com, beginning with sale of 55 brands including those of the parent group. The brand Skult, which was exclusively available on Abof, will be absorbed by the group’s branded apparel division Madura Fashion & Lifestyle.

Initially, the company’s position had been structured in a way that it would not offer discounts and, instead, sell a more limited and fashionable range of merchandise.

However, later, it had to adjust itself according to the market and started offering discounts on about 70 per cent of the products available on the portal.

This development points towards the loyalty factor of consumers in the ecommerce world, which is largely based on discounts and deals. And as cynics question, will the e-commerce world survive against the giant retail world in the absence of discounts?