Aditya Birla Group to shut ecommerce site amid tough competition

December 31 will be its last day of operations.
Aditya Birla Group to shut ecommerce site amid tough competition
Aditya Birla Group to shut ecommerce site amid tough competition
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Aditya Birla Group’s flagship ecommerce site, which was launched in 2015, is shutting down operations amid rising competition by aggressive rivals such as Flipkart and Amazon.

As per an Economic Times report, Aditya Birla Online Fashion held a 20-minute townhall meeting on Thursday to inform its employees that operations will close on December 31.

Abof will start closing down its stocks from November onwards.

However, the 240 employees will not be laid off. All employees are likely to be absorbed in to other business units, reports Inc42.

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

“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 ET.

According to him, all employees will be given four and-a-half months’ salary as compensation, in case they choose to quit the company. was launched in October 2015 to target the age group of 18-25. At the time of launch, the company was firm that it won’t be offering discounts unlike other ecommerce companies.

"We were choosey about what we put on the portal. It is easier to give many options than make a selection and then give that as an offering,” Kumar Mangalam Birla, group chairman of Aditya Birla Group said at the time of launch.

However, ET reports that about 70% of products on the website were on discount.

Abof currently delivers to over 500 cities across India and has customer care services set up to cater to these places.

This in fact is its second ecommerce venture that it’s shutting down after it closed last year for the same reasons. Competition is only become tougher, especially in the light of Amazon expanding aggressively in India and Flipkart and Paytm receiving massive funding from large international investors.

Apart from Abof, the other large conglomerate to enter ecommerce was Tata Group which launched Tata Cliq in May 2016. While Aditya Birla Group is exiting ecommerce, Tata Group is in fact expanding further and is reportedly foraying into online grocery under the Starquik brand. 

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