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    German investor Rocket Internet may close down FabFurnish; looks for Indian partner

    Synopsis

    Rocket Internet may pull the plug on two of its online businesses as it grapples with challenges facing bouquet of ventures in India, including Jabong.

    ET Bureau
    New Delhi: German investor Rocket Internet is planning to pull the plug on two of its online businesses, FabFurnish and Printvenue, as it grapples with challenges facing its bouquet of ventures in India, including flagship Jabong.

    Two people aware of the plans said that Rocket Internet is making a last-ditch attempt to find an Indian partner to run FabFurnish, failing which it will shut down the furniture website by March-end.

    “If Rocket Internet does not find any Indian company to hand over the furniture business to, it will be left with no other option but to exit the business. It is moving in that direction,” said one of the persons, who did not wish to be identified.

    Image article boday
    ET had reported in August 2015 that FabFurnish had fired about a fourth of its workforce and was vacating warehouses as part of a business restructuring that involved changing to a marketplace model.

    “Even shifting to the marketplace model hasn’t worked. This will lead to a possible closure of FabFurnish,” the second person said.

    Although FabFurnish had an early mover advantage in online furniture retailing in India, it has not been able to withstand competition from rivals including Pepperfry and Urban Ladder. Rocket Internet is no longer interested in pumping money into the bleeding firm, the people said.

    Rocket Internet spokesperson in Germany said the company does not comment on “speculations”.

    The second person cited earlier said that Rocket Internet tried to sell Printvenue to rival Vistaprint, albeit without success.

    “Vistaprint didn’t find it viable and Rocket Internet will now shut Printvenue by March-end,” he said.

    Rocket Internet was aiming to become the largest e-commerce operator outside of the United States and China, but it has been facing a host of problems at its various India businesses.

    Last year, it changed leaders at most of its businesses including Jabong, Foodpanda, FabFurnish and Printvenue in a bid to revive the sagging fortunes of the online ventures.

    It also replaced its co-founder duo of Arun Chandra Mohan and Praveen Sinha by a professional chief executive Sanjeev Mohanty, a Benetton veteran.


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    ( Originally published on Jan 27, 2016 )
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