Taggle.com Shut Down. Indian eCommerce Bubble Bursting?

I think it had to happen. With the recent flooding of deals-based websites in the Indian eCommerce scene; lot of startup companies are finding it difficult to sustain their businesses. Taggle.com - one of the startups that first played in the 'service deals' domain and then moved to the product commerce domain has shut down operations effective immediately. The company started its journey in June 2010 with $1m funding. The message company has posted on the front page of their website clearly shows the 'insider' story of how ecommerce websites are finding it very difficult to sustain in the competition. Taggle.com claims that the competition is selling products at a lesser price using the venture capital funds to attract customers and that is not the right way to build a sustainable business.

The company says that the team is back to the drawing board to decide what to do next. Check out the message cross posted from taggle.com homepage: -

Dear Users,

We have decided to cease our ecommerce operations effective immediately. We will not be taking any more orders from our users.

We started Taggle in June 2010 with US$1M in funding to build a sustainable and profitable business by getting the best service and product deals for our users. We have always believed in providing superior experience and value to our users. When we realized that service deals were not giving the best value to users, we quickly shifted focus to only products. Our users responded very positively to the shift and it reflected in our revenue numbers too, we grew our revenues 10 times within 3 months of the shift.

However, the current market conditions have many ecommerce players selling products at below cost price to lure users. The only way to sustain the business at this time is to get into a price war and burn a lot of investor money and try to outdo competition in a Last Man Standing game. This practice goes against our philosophy of building a sustainable and profitable company. Hence, weve decided to go back to the drawing board to figure out the best way forward.

We thank all our users who have shown trust in us and supported us with their business.

In case you have any questions or want to reach out to us we can be reached by email at #-Link-Snipped-#

Thank You
Team Taggle.

PS: We will be refunding Taggle Cash balance to the customers, but Taggle Points are not redeemable in cash, please see #-Link-Snipped-# for details.
What I fear is that this could just be the start of the ecommerce bubble burst. We do not see any innovation in the way these ecommerce websites operate or offer value to the customers.

Do you think other popular ecommerce websites in India will sustain their business models?


  • Kaustubh Katdare
    Kaustubh Katdare
    Addendum: If anyone's ever purchased from Taggle.com - can you comment on their customer service? I think this is one of the biggest pain points Indian ecommerce websites have. I've had my own share of frustrations with few other leading ecommerce websites.
  • Gandalf
    Depends on their managerial skills
    It is a business similar to airlines
    But innovativeness in operations
    led to a profitable Indigo Airlines

    were all big players are shouting foul 😔
  • silverscorpion
    An e-commerce site I know is doing very well is Flipkart.
    I have made purchases from that site, and I'm very happy with their customer service.

    I think it all depends on the execution. Agreed, price wars are not good for anyone in any business.
    But those who manage not to fall into a price war, can sustain and grow their businesses, I think.
    Although, I have no clue how anyone can avoid a price war if everyone else in the competition is doing it.
  • Kaustubh Katdare
    Kaustubh Katdare
    Flipkart's not profitable; as far as I know.
  • Gandalf
    Flipkart's not profitable; as far as I know.
    Though it is valued at whooping $1 billion due to its sales
    i have read that it losses around 6 crores per month.

    And Market experts believe it is over valuated and investors wouldn't get an Exit Option if current scenario prevails
  • Kaustubh Katdare
    Kaustubh Katdare
    It's all VC money. Same story goes with Myntra.com which burns cash at the rate of Rs. 5cr/month.
  • tech_vaibhav_ee
    It is sad to see such an incredible sector going this path. Wonder what's going to happen when amazon enter India.
  • Kaustubh Katdare
    Kaustubh Katdare
    It is sad to see such an incredible sector going this path. Wonder what's going to happen when amazon enter India.
    I believe Amazon will enter India through acquisition. There were rumors that they'll acquire Flipkart because they've a greater brand presence. The key to success in India is excellent customer service. Else; there are bloggers like me who dig a big hole their online reputation.

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