Do you remember those silly Ranbir Kapoor and Farhan Akhtar ads in 2016? Yes, those AskMe Bazaar ones’.
Well, as you’ve already guessed it, we are going to analyze the shit out of AskMe’s success & failures: what was it doing & what it should’ve done right.
For Appetizers (Yeah, I know I’m foodie.):
AskMe was started as an classified portal in 2010. With Getit infoservices acquiring it soon, its online marketplace model started around 2012, with AskMeBazaar. And by 2014 AskMeBazaar.com started it’s operations in India, competing with the likes of Flipkart & Snapdeal.
In this case study, we’re going to discuss about:
What exactly was AskMe?
In mid-1980s, a company with the name of Getit Infoservices started as a yellow-page business directory service provider, whose main focus was on enlisting local & small business pan India and providing that information to potential customers. It kept on growing as in 2010, it had spread across 50+ cities pan India.
Around 2010-12, it acquired AskMe & started its plans of Online expansion.
After acquiring AskMe, In June of 2014, it launched its Online website by the name of AskmeBazaar. Despite the fact that AskMe Bazaar debuted later in the Indian E-commerce market, it had the advantage of vast listings of local & small business in small cities that Getit already possessed, which were not already listing on Flipkart, Snapdeal, & other online Marketplaces.
WHAT AskMe DID?
AskMe’s USP was simple – to take advantage of the local listings of small sellers in smaller towns, that Getit collected in past decades – by taking those small sellers online, and started providing Next Day Delivery (NDD) offer, after experimenting with it for 18 months.
Being Metro cities their maximum revenue streams, such as Delhi, Mumbai, and Bengaluru.
They also managed to tap into other tier-2 cities for the likes of Kanpur, Kota, and Banaras.
With the launch of AskMeBazaar’s horizontal business model, AskMe decided to tap the Vertical business also.
By investing in Mebelkart, a furniture marketplace, acquiring BestAtLowest, an online grocery marketplace, AskMePay, payment divisions, & AskMeGroceries, groceries divisions.
But in retrospect, All this acquisitions & expanding too fast, too early will become its very reason to its Downfall.
One of the surprising factor of AskMe was – being an ecommerce company – it’s top management included only people from Marketing & Sales, which deprived them from the Technical trends & leadership insights.
According to one of its key management personnel, they used to record & track orders through MS-Excel.
Downfall of AskMe
With stars like Ranbir Kapoor & Farhan Akhtar as their Brand Ambassadors and in their ads, the thing they were neglecting was: exactly what they were selling, As being a new name in indian market, The company was not successful in articulating the very work done by the company, which confused their Audinces.
Well, the audiences weren’t the only one who were confused. As the Management was thriving to match their incompetency to manage all the divisions of the business.
And the Proverb of the millennia doomed over them:
Jack of all trades, master of none…
When Steve jobs arrived at Apple inc. as their interim CEO in 1997, to save the company from bankruptcy. He instantly cut down the products apple was producing, with only its desktop and laptop division remaining. And in this way he saved the Apple from being doomed in oblivion for eternity. (BTW developing iPod also helped Apple.)
So where were we? Yeah. Askme group’s thin and early growth ambition tore the streak of their ongoing success. As due to their continuous Acquisitions & Investing, the company was burning Cash above the level of danger. This Prompted their biggest sole investor, Astro Holdings, to pull their hands out from their streak of constant investments. This led to a Capital deficit, as the company was already operating in high losses.
These strings of events brought the dark clouds over the heads of the Top-Level Executives. In an Interview taken by Business Times, AskMe’s CMO tackled the question a journalist asked him of: What were his thoughts on being Askme in loss and losing its sales for last 7 months. And instead answered that they were expecting a huge round of funding being granted by none other than the hinese conglomerate– Alibaba group. (Though that never happened, BTW Jack Ma best wishes on retirement.)
Scaffoldings of Bills
“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you.”
― Friedrich Nietzsche
As the cash burn rate of Askme kept on increasing with their – losses rising & sales declining. Askme found itself unable to pay to many of its online listed sellers, who had already sold the products but didn’t receive their payments.
Along with their loss of trust & faith, sellers decided to ignore the order requests from the site itself, with many being not listing at the online portal at all.
Due to mismanagement and lack of corporate governance, the company wasn’t even successful in paying its own employees also.
An ex-employee at AskMe told YourStory that salaries were delayed in the last few months, and in August, many employees did not get salary at all.
August 9th, 2016: AskMe told its employees to contact directly Astro Holdings for their salaries, and emailed each of their unpaid employees the contacts of Astro Holdings’s management. ( Not a decent corporate ettiquete.)
Finding itself cornered, Askmebazaar.com decided not to take orders at all as of August 2016. And the company soon became defunct, leaving thousands of its employees jobless & sellers Unpaid.
The Concluding lessons that could be learned from the fall of AskMe, the Mega-startup, are that:
- Define your Niche
Defining your scope of operations is as important as the very essence of the impact of your product/services on your customers.
It confused Management to their bones as what exactly were they supposed to do.
- Expanding too early & too thin can become an inevitable sin.
With being in market for only 2 years, AskMe Bazaar sailed on wooden boats which had holes in bottom; to surf on the giant waves.
To even generalize their logistics solutions, they had to wait for 18 months, which observed in the light of cut-throat competition coming from the likes of Flipkart & Snapdeal, was suicide.
- Incompetent staff is business liability.
To manage the vast divisions of AskMe, the competency required by the circumstances outreached current managements’ competency, the same management which struggling with confusion & chaos due to its indefinite goals & markets.
- Concentration of control led to business complications.
As more than 95%+ stocks were owned by the Astro holdings of Malaysian billionaire – T. Ananda Krishnan, the decisions being made were extremely unilateral, which disabled management to make its own decisions
- Profit is an important aspect of business.
The doom of AskMe Bazaar wasn’t something unpredictable, as the company was running in giant losses with declining sales. The chart says it all:
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