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Ensogo Shuts Down All Marketplaces In Southeast Asia

Ensogo Office in Bangkok Source: bk.asia-city.com

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.

One Belt One Road

Map of One Belt One Road. Source: Chinainvestmentresearch.org

HSBC’s Asia Pacific Chief Executive, Peter WongTung-shun has stated that the ‘One Belt One Road’ trade initiative will require the banking sector in the region to raise up to US$6 trillion of funding over the next 15 years. This is because no single government is able to raise a large sum of money without help from the banking sector.

The ‘One Belt One Road’ project was announced in Beijing in 2013, and aims to establish linkage between mainland China to India, the Middle East and Southeast Asia to promote cross-border trade.

The project leads have already visited Thailand and Malaysia in May to explore opportunities, and plans to visit Indonesia and Singapore next month to analyze the market potential there. The aim of the project is to serve governments, international firms and SMEs and boost logistics for these businesses. The new infrastructure should also provide trade linkages between the countries, which could then lead to the internationalization of the yuan currency.

One Belt One Road Ecommerce Potential

Alibaba founder, Jack Ma has expressed his interest in following the One Belt One Road initiative announcing that the most important regions for his company were countries involved. This aligns with Ma’s aspirations for SMEs to have access to global markets, but are held back by complex regulations, poor global access and lack of access to financing.

The potential for an inter-connected e-road will boost SMEs and potentially fix one of Southeast Asia’s biggest ecommerce bottlenecks; logistics and infrastructure weaknesses. Countries in the One Belt One Road path have large populations, but they are not utilizing their trade potential, and Ma has slowly been penetrating needy markets such as Thailand, investing in online payments and acquiring Lazada. If One Belt One Road receives the funding it requires to fully enable trade along the regions, then it could create even more opportunities for The Alibaba Group, ultimately enabling ecommerce as a whole.

A version of this appeared in South China Morning Post on June 19. Read the full article here.