HONG KONG – Fashion e-commerce company Zalora Group has denied market speculation that it’s poised to sell its Indonesian business to the large-scale retailer Mitra Adiperkasa. A possible deal was first reported by TechCrunch, but Zalora said Tuesday that Indonesia was too important a market.
“With respect to Indonesia, this is certainly not a market we are moving away from,” said Parker Gundersen, chief executive officer of Zalora Group. “I think it’s widely understood that Indonesia represents one of the largest market opportunities for e-commerce in southeast Asia in the years ahead. So I want to make it very clear that speculation Zalora is closing down its Indonesian operations are simply not accurate.”
“With respect to our dealings with Mitra Adiperkasa, I have a lot of respect for them. We’re in constant discussion with them about partnering on adding new brands to the site, but at the current moment we’re not engaged in any discussions about (their) taking a direct investment in Zalora.”
Zalora belongs to Global Fashion Group (GFG), the fashion e-commerce arm of the Frankfurt-listed Rocket Internet, and it operates across Asia. The GFG umbrella also includes Dafiti, which operates in Brazil; Lamoda in Russia; and The Iconic in Australia.
Analysts said the deal could have been mutually beneficial – especially to Mitra Adiperkasa. It created MatahariMall in 2015, an online version of its department store (and its first online venture), but traction has been poor.
“Zalora Indonesia is currently ranked as the number one fashion e-commerce portal (a niche focus e-commerce and not an everything store) in Indonesia. MAPI (Mitra Adiperkasa) would also then have experienced e-commerce professionals running the show (unlike MAPeMall which seems to be not going anywhere). We believe a potential combination could be a match made in heaven,” wrote P.T. Bahana Securities analysts Richard Danusaputra and Henry Wibowo in a note published Tuesday.
They added: “If we assume that Indonesia contributes around 10 to 20 percent towards Zalora Group’s business, then the valuation of Zalora Indonesia could range between 26 to 52 million euros, or $30 to $60 million.
Last Thursday, GFG agreed to sell a 49 percent stake in its Philippines business to one of the country’s largest conglomerates and mall developers Ayala for an undisclosed sum. Last year, Central Group, the prominent Thai retail group that owns La Rinascente, bought a controlling stake in the Zalora Thai and Vietnamese business.