E-Tailer ShopClues Fires 52 Employees Across Multiple Functions

ShopClues has laid off around 52 employees across its marketing and operations verticals o 22 March, as has been reported by Economic Times. 

A company spokesperson has confirmed the development but has also mentioned that the firing of the employees was done considering their individual performances. He added that the laying off has impacted only 4% of the workforce.

The news of ShopClues handing over pink slips to its employees by a Twitter user, Corporate PSU Bank Kumar. 

Sayantan Sinha, Head of Corporate Communications, ShopClues has also responded to his tweet.

The firm’s employment strength ranges from 1150-1200.

Profits and losses

During the fiscal year 2017, the company saw its total revenue mostly flat, with a minimal 5% jump to Rs 188 crore. Its loss for the same period went down by 13% to Rs 332 crore, as it reduced its advertising and promotional expenditure from Rs 236 crore to Rs 188 crore.

These data are drawn from the financials presented by ShopClues to the Registrar of Companies and sourced through business intelligence platform Tofler. 

ShopClue faces competition

The layoffs have taken place at a time when the company is facing a stiff competition from India’s two biggest e-commerce companies, Flipkart and Amazon. Along with this, Snapdeal is also steering towards a pure marketplace model with a focus on non-branded products. This has given rise to a competition with Snapdeal that caters mostly to customers outside the metro cities. Walmart might also be the newest contender in the e-commerce market in India if its ongoing deal with Flipkart materializes.

Funds for the company

Last month, the company was reported to have raised a bridge round, estimated at $1 million, from early investor Unilazer Ventures.

As reported by media, the Indian arm of Clues Network Inc has allocated about 1,027 equity shares to its Indian subsidiary for raising this round.

Last year, in May, ShopClues had raised $ 7.7 million in venture debt from InnoVen Capital. Again, in November, the company raised $15 million from an ad-for-equity deal with the media conglomerate BCCL.

These fund raises are nominal in comparison to the ones its competitors receive from big names like Alibaba and Softbank.

In this scenario, the best option open in front of ShopClues is that of a merger considering its low cash reserves, scale-back in categories like home appliances and missed gross merchandise volume targets.

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