RIP Dealivore.com & Other Deal Sites Who Have Quietly Pulled The Plug On Their E-com Ventures

13 Apr, 2012

The Indian e-commerce sector has witnessed yet another casualty. And the latest victim is Hyderabad-based group buying website Dealivore, promoted by ICUMI Technology Pvt Ltd. Dealivore was a deep discount deal provider, which worked without requiring customers to pool together to buy a minimum number of coupons to activate a deal (a model which pioneered group buying but was swiftly remodelled in India).

Founded by Satish Madhira, an alumnus of IIT Madras (he had previously worked with SAP Labs, TVS Capital, YASU Technologies, Zoho Corporation – formerly Adventnet – and Infosys, Dealivore was operational in Bangalore, Hyderabad, Chennai, Delhi, Mumbai and Pune.

How Team Dealivore Signed OffDear Customer, At the outset, we at Dealivore wanted to thank you for providing us the opportunity of serving you for the past 2 years. During this period, we have tried to provide you the best deals in the city, verified to the best of our efforts. Most of our growth has been self-funded and through internal accruals over this period, helping us reach a substantial user base with a fraction of the spend that the frenzied daily deal industry is seeing.

The last one year has, however, seen significant changes in the marketplace – we were outrun by a vastly funded company that executed well. On the other hand, it has also become the norm in the industry to create inflated deals/pricing/discounts, often with little regard to the end-customer. The one thing we never wanted to do was to have regrets of having run a business that deliberately provided deals that were not fair. We don't want to provide our customers such deals. This has made it hard for a self-funded company such as Dealivore.com to continue to source true-value deals for customers.

We are now shutting down our daily deal operations. Vouchers purchased that are valid and good as of today can be utilized as usual. We have a minimal support available at support@dealivore.com to resolve any issue that you might face.

Dealivore registration or referral credits will be null and void with immediate effect. We thank all our customers for trusting us and providing us the opportunity of serving them. Contact us at support@dealivore.com if you have any query.

Thanks Regards Dealivore Team Dealivore

We guess by "…we were outrun by a vastly funded company that executed well," Dealivore refers to either Snapdeal (which has gradually pivoted from a deal site to a horizontal e-commerce firm and a pretty prominent one at that) or the big daddy of Indian e-com, Flipkart. Both are well-funded companies, having raised multiple rounds of PE/VC money.

Dealivore Is Not AloneDealivore's demise is one among many other small e-com players who have quietly gone off the radar (and we mean shut down their shutters) as the industry is seeing a duality. Some entrepreneurs still get attracted and join vertical e-com businesses while others have tried and decided that it's not worth staying put as an undercurrent of consolidation is running through the business.

A quick survey of the virtual shopping world reveals that a slew of e-com sites, especially those in the group buying and deals business, have pulled the plug.

For instance, a Chennai-based deal site called Masthideals, (part of Sri Jagdamba Pearls Group), which has provided deals for restaurants, spas, resorts and theme parks, seems to have ceased its operations. When one tries to access it, a message comes that the domain name has expired on January 23, 2012, and is pending renewal or deletion.

Also, Bangalore-based group buying site Scoopstr and Snatchdeal have either stopped transactions or are not operational. 30Sunday is another player which has apparently shut down. It worked as a meta deal aggregator tracking 11 group buying sites, had presence in more than 21 cities and daily collected around 75 deals.

These closures follow the first big euthanasia by a VC-funded e-com venture in India when e-commerce site Taggle, run by Bangalore-based Taggle Internet Ventures, had struggled to survive for some time and then died officially. The company was set up as a group buying site and raised funds from Battery Ventures and Greylock Partners in June 2010.

In another such development, Vamoose Vacations Pvt Ltd (Vamoose.in), which was launched by TravelMart India Pvt Ltd (one of the early travel services providers in the country), was also shut down a few months ago.

According to K Vaitheeswaran, founder and CEO of Indiaplaza, one of the oldest e-com sites still active in India, "Any new and high-growth industry will attract fresh entrepreneurs who will try to create a new business. Many will fail and lose out and a few will gain and succeed. That is the way of any industry. Further, with several e-commerce companies focused purely on customer acquisition at high costs, companies will be unable to sustain the high burn rate and have no choice but to exit."

While many of the casualties have included deals and group buying sites, some have also scaled up, thanks to their financial backers. These include Snapdeal, Koovs, Dealsandyou, Crazeal.com (or Groupon India) and Mydala. The well-funded companies have also been leading the consolidation in the rest of e-com industry with Snapdeal acquiring eSportsBuy, an e-tailer of sports and fitness equipment and accessories. This followed an even bigger activity when Flipkart acquired Letsbuy. It seems consolidation will remain a buzzword in 2012 to tone down the e-commerce euphoria.