Reasons Why Abof Failed to Compete Against Other Fashion Brands | Abof Failure Case Study

The primary factor that drives any startup is not just the idea but also the ways in which the novelties are pitched in based on the market trends. Keeping that in mind it is also important to look through the various ways in which start-ups have come up and gone through the test of time by adapting and improvising their key ideas depending on market requirements.

This article will be looking at an e-commerce platform that had to shut down due to various reasons. The highlight here is that they didn't stop there. Today they have come back in a new form announcing their presence in relevant areas. Abof.com by Aditya Birla Group is this e-commerce website that deserves careful scrutiny of its inception, downfall and resurrection.

Abof.com was launched in 2015 by the famous billionaire Aditya Birla. Abof stands for All About Fashion and was considered to be a significant competitor along with Amazon and Flipkart in the fashion industry. They had consolidated its branded apparel business under the label of the lifestyle retailer Pantaloons Fashion and Retail India Ltd. However a company with a strong foundation in all sense of the word had to wind up its operations and transactions by the end of 2018.

Abof.com was the second e-commerce venture by the Aditya Birla Group that had to shut down. The first one was Trendin.com. The following are the primary reasons that led to the closing down of the firm.

Reasons Why Abof Failed
Efforts Taken by Abof to Revive the Brand

Reasons Why Abof Failed

Inability to Manage the Competition

When Abof was launched, they had to compete with e-commerce giants like Flipkart which owned Myntra and Jabong along with Amazon and Snapdeal. As far as this matter is concerned, the company should have ideally analysed the marketing patterns of its competitors so as to respond in such a way that would help themselves improve their businesses. However, analysts who observed the functioning of Abof says that the firm failed in marketing their products efficiently.

While companies like Myntra, Amazon, Jabong focused heavily on social media ads, re-marketing in addition to tying up with Google, Abof did not engage in these methods actively. The opportunities for the company to channelise a huge amount of money for the purpose was possible considering the fact that they were backed up by a giant like Birla.

Failed Campaigns and Price Disparities

In an already complicated world, it is extremely important to be the best and stand out for better sales. As far as the customers are concerned, they will go for the best deal at the best price.

Considering the similarity in the options given by all the competitors in the fashion industry, one of the main things that ensure the business is by making sure that the customer profit ratio is high. At the same time, it is also important to ensure the standing of the company. However, Abof approached the competitive market in a very different manner.

It can be seen that the company didn't follow the basic pattern wherein new ventures do the business with less profit margin at least in the initial years. The ambition to earn billions within a short span of time fell upon them in a negative manner.

When Abof launched their site, they made it extremely clear that they will not give any kind of discount. They also added that their "target consumers are not the guy who is looking for a deal”. One thing that they forgot was that when it comes to daily wear apparel that is available in multiple places, everybody will go for the cheapest one. By the time the firm realised its mistake and introduced more than 70% off on their products, it was too late.

Lack of Options

One of the main intentions of this e-commerce website was to sell their own brands amidst a few other brands. In such a scenario it is very important to have a clear-cut statement that attracts customers to their particular brand instead of others.

While pitching a new brand amidst others that are available in multiple places it is also necessary to hold the customers with them without going to another platform to avail themselves of a better deal. Such a complex intention of the company along with its stringent rules that did not give enough discounts like others further eroded the credibility and site traffic of Abof.

The situation was further aggravated by the wide expanse of offers and varieties provided by its competitors like Amazon and Flipkart in their websites. The fewer brands and options in Abof spoke for its own downfall.

Efforts Taken by Abof to Revive the Brand

It did not take much time for Aditya Birla Group to recognise that the soil under their feet was flowing away. Although they had refused to provide any discounts, they had to offer up to 70% off on the products that were available on the portal.

The company also tried to enhance their marketing game by publicising its 3D trial room to the customers via TVC. The campaign was supported in selected cities like Lucknow, Chandigarh, Patna, Jaipur. They had also tied up with popular shows. However, the campaign didn't reach the audience as expected.

As it became more difficult for the firm to continue, the HR director at Aditya Birla group said that considering the vastness of the e-commerce business it is a struggle to make money from the venture for some time. He also added that it doesn't seem logical to continue when it is very clear that things are not right. December 31, 2017, was the last day of its operations.

Even when it shut down, Abof gave a good example to the firms around. They did not abandon their employees. More than 200 of them were absorbed to other wings of the Aditya Birla Group. They were also given the option to quit along with payroll for 4 1/2 months.

The company's way of taking responsibility for the future of the employees who trusted the vision of the venture showed the commitment of the company towards its employers. Through effective communication and handling of the entire process, the shutdown was hassle-free which is usually a rare sight to see. They were are also not ready to stop learning.

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Conclusion

Today Aditya Birla Fashion and Retail Ltd have announced the launch of Abof which will now be available in other e-commerce platforms like Flipkart and Myntra through third-party sellers. By utilising the vast network of Flipkart and Myntra they are all set to expand their reach across the subcontinent and thereby introduce customers to a wide range of collections. It is hoped that the company will make a strong comeback by learning from its mistakes.

FAQ

Why did ABOF fail?

Abof refused to provide any discounts on its products, Its marketing strategy failed to attract customers and it had fewer options than its competitors.

Who owns ABOF?

Aditya Birla Group launched fashion retail site Abof in 2015