One of the top 10 players in the Indian e-commerce sector, Askmebazaar, is likely to down its shutters. Astro Entertainment, the majority owner of Askme, said on Friday it would review its investment in the company in the absence of profits.
The company denied it was shutting down, but sources said Askme has asked its 4,000-odd employees to look out for other opportunities.
The Malaysian investment firm, Astro, owns around 95 per cent of Getit Infomedia, Askme’s parent.
Astro said Getit has not been able to make its business profitable and sustainable despite huge investments.
“An independent review by advisors has concluded that there is little prospect for turnaround and the business is insolvent. Astro Entertainment intends to appoint a forensic auditor to review Getit’s books and will take appropriate steps based on the results of that audit,” Astro said.
A top official at Askme said this did not mean a shutdown or lay-offs. He said Astro Holdings was working on an alternative plan.
“We are not shutting down. It is just that we are not taking any orders on our e-commerce site (askmebazaar.com) at present,” the executive said.
Askme.com started as a classified portal in 2010, and launched its online shopping portal Askmebazaar in 2012 with a focus on small and medium enterprises.
In 2013, AskMe was acquired by Getit. It also has properties like AskmePay and Askmegrocery. The company had lately been burning huge amounts of cash to stay afloat in a fiercely competitive market with players like Amazon.in, Flipkart, Snapdeal and ShopClues.
The company had this year roped in Bollywood stars Ranbir Kapoor and Farhan Akhtar as brand ambassadors. It was also in talks with a few foreign investors to raise about $200 million this year. The investors believe the Askme case reflects a high-burn situation without any focus on capital efficiency.
Malaysian billionaire Ananda Krishnan, who is the promoter of Astro Holdings, had invested about ₹150 crore in Askme in July this year.
According to sources, Astro Holdings may slowly exit the Indian market since the CBI probe against the investment firm was inhibiting fresh capital investments in any of its portfolio companies. The investigations are related to Krishnan’s investments in Aircel.