Ensogo, the daily deal and flash sales website, has announced it is shutting down all business units in Southeast Asia to reduce its cash burn and focus its efforts on new investment opportunities.
Ensogo Australia, which is listed on the Australian Securities Exchange, confirmed it will no longer provide financial support to its subsidiary Southeast Asian business units.
Co-founder Kris Marszalek has also quit his chief executive post.
"These business units will be shut down. All staff have been informed and communications will be made to customers in the coming days," said a company statement yesterday.
"These decisions have been made to preserve the company's cash for new investment opportunities."
A local employee of Ensogo Thailand said the company is waiting for a clear compensation policy for its 100 employees, customers and local online merchants.
Formerly known as iBuy, Ensogo owns a network of e-commerce websites in Hong Kong, Singapore, Malaysia, the Philippines, Indonesia and Thailand. It was founded by entrepreneur Patrick Grove of Catcha Group, who also established online businesses iProperty and iCar.
Ensogo launched as a daily deals website around 2010. Then in late 2015, it began to transition to what it called a "game-changing" shift for the business -- a mobile marketplace.
Pawoot Pongvitayapanu, president of the Thai E-commerce Association, said the industry is transitioning, with more consolidation to come. Ensogo's main regional rival is Lazada, owned by Alibaba.
"Only big players with a healthy financial status can survive in the hyper-competitive market," he said. "The flash sales market eroded margins but earned no customer loyalty."