Zilingo grew big, lost big from 2018 to 2019

Zilingo, the business-to-business fashion ecommerce company with close to US$1 billion in valuation, grew its revenue by more than five times to US$102 million for the financial year ending March 31, 2019.

But that growth was also accompanied by an operating loss of US$88.3 million, which resulted from a huge increase in marketing and advertising expenses.

Zilingo co-founders (from left) CEO Ankiti Bose and chief technology officer Dhruv Kapoor (R) / Photo credit: Zilingo

The numbers also don’t show the extent of how Covid-19 affected the Singapore-headquartered company, which implemented multiple layoffs this year. Instead, they represent the early stages of its pivot to B2B and factory floor software-as-a-service (SaaS) provider.

In early 2020, Zilingo was on track to hit US$200 million in annual revenue. Tech in Asia contacted the company, but it declined to comment on this story.

Like most startups, Zilingo’s revenue growth has been massive. But a lot of that can be attributed to its ballooning marketing and advertising expenses, which exceeded revenue in each of the past three financial years.

Ultimately, this led to a fourfold increase in operating loss from 2018.

Tech in Asia‘s sources have also pointed out the challenges that Zilingo faced in getting adequate returns on its marketing spending.

Inventories sold, which appears to represent its business-to-consumer strategy, amounted to US$29.6 million. A further US$1.7 million of inventory was also written down.

But at 26%, the sales of goods still represented just a fraction of Zilingo’s overall revenue. The bulk is made up of commission and fulfilment revenue.

Given that Zilingo is moving away from B2C, sales of goods are expected to decline as part of the revenue mix moving forward.

Thailand continued to be Zilingo’s biggest market. The second largest was India, which grew significantly compared to 2018.

A tough year