Diving into Zilingo’s growth – and its losses

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Hello readers,

We’re about halfway through December, and I’ve been thinking about the year that we’ve had. The honest truth is, 2020 has been a pretty terrible year for many of us. The best laid plans of mice and men have gone very awry, and while we’ve found silver linings and made the best of the situation, it doesn’t change the fact that 2020 probably turned out very different from what we envisioned.

And that’s the case as well for lots of companies who have had to cut costs and find ways to stay afloat in the pandemic. Business-to-business (B2B) fashion ecommerce company Zilingo grew significantly over the last few years, but it also had some pretty big losses – which the pandemic may have exacerbated.

Today we look at,

• Zilingo’s tremendous growth – and its struggles
• What fresh funding will do for this mini-app startup
• Other newsy highlights such as Ola’s plans to build a giant scooter factory and China’s fines on Alibaba and a Tencent unit

PREMIUM SUMMARY

Go big or go home?

Fashion ecommerce company Zilingo was on track to hit US$200 million in annual revenue in early 2020, powered by its near-unicorn valuation and its pivot into a B2B and factory floor software-as-a-service (SaaS) provider. However, it’s big bucks have come with some big losses.

• Money in, money out: Zilingo’s revenue grew more than 5x to US$102 million for the financial year ending March 31, 2019, but that growth came with an operating loss of US$88.3 million thanks to a jump in marketing and advertising expenses. Sources have said that Zilingo likely faces challenges in getting adequate returns on its marketing spend, which exceeded revenue in each of the past three financial years.
• The revenue pie: Sales of goods made up a small fraction of Zilingo’s overall revenue, at just 26%, with the bulk coming from commission and fulfilment services. Given that Zilingo is moving away from the business-to-consumer space, sales of goods are expected to decline as part of the revenue mix moving forward.
• The shadow of the pandemic: Covid-19 has hit Zilingo hard, leading to layoffs and questions about business performance. The company began offering personal protective equipment and fast-moving consumer goods in a bid to offset Covid-19’s impact, but current and former employees have questioned these approaches, sharing that the company’s frequent pivots have been costly.

Read more: Zilingo grew big, lost big from 2018 to 2019

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