Ensogo announces that it is shutting down all business units in Southeast Asia and laying off staff in the region.
This follows an array of bad news that has been following the company since the beginning of the year, including the firing of half its staff in May in an effort to save costs. In a statement sent to Tech in Asia, the company has announced that:
Ensogo Australia will no longer provide financial support to its subsidiary Southeast Asian flash sales and marketplace business units. This decision has been made to preserve the company’s cash for new investment opportunities.
Trading in the Ensogo stock was halted on June 17 prior to today’s announcement, and is due to resume today.
Ensogo owns a network of ecommerce websites in Singapore, Hong Kong, Malaysia, Philippines, Indonesia and Thailand. It has been struggling to strive in a competitive marketplace, and shifted from being a daily deals website in 2013 to a mobile marketplace in 2015.
What went wrong?
Ensogo initially started out in a time when Groupon popularized online daily deals. Eventually, this trend fizzled out and although Ensogo attempted to reinvent themselves, they struggled to catch up to larger ecommerce titans, the main challenge for the company was to convince consumers to engage with them even though Ensogo reported that it had 3.5 million users.
The trail of bad publicity continued in May 2016 when Ensogo merchants complained about not receiving payment. A report sent to the ASX earlier this year showed that the company’s total cash at hand stood at only $13.2 million US, which meant that if it did not raise additional money or trim costs, the company could run out of cash before end of 2016.
A version of this story was published in Tech in Asia on June 21. Read the article here.