Saturday, July 19, 2014

Dafiti lost Euros 72.9 Million during 2013 in Latam countries!

Logistics costs and distances in Argentina make it difficult to offer free shipping in cheap products.
In Internet shopping, some products are coming into Argentina from another continent at no cost
(perhaps from Alibaba).
Why free shipping is not common in Argentina ? It constitutes a barrier to the development of eCommerce locally.
For instance, Dafiti in Argentina sends free shipping if you buy over ARS299 pesos (in the range USD28-USD32), less than the average sale ticket of the site. 
(Dafiti losses money sending a free shipping delivery in Argentina because it fixed a low level, perhaps to gain traction. PREDATORY PRICES)

Please remember:
If you want to replicate a big success in Brazil, it will be as hard as the same to replicate it in all European countries, but in this case with 1/8 of population and the majority of the persons DO NOT own or WILL NOT use a credit/debit card to buy online! They will prefer to research online and then buy offline.

Many if not most, USA, Canada or European businesses models are inviable unfeasible in Latin American countries!

Perhaps the same situation for Africa, Russia or even Australia.
(transportation costs could be 10 times bigger than Europe

e.g. If you buy a pair of shoes from Dafiti, it seems Dafiti is selling below cost to gain traction, so Dafiti is going to lose money selling that pair of shoes, and if Dafiti delivers that pair of shoes to your house for free, the fee of the courier in Argentina or Brazil could be 10 times the fee of the same courier in Germany or Sweden.)
All European countries fit in Brazil or Australia,

Big investments, big losses 
As for the young Latin American Amazon clone, Linio, 2017 is set to be a good year – with estimated revenues of €281m, the Samwers claim that the return on sales will be an impressive 12%. This is a clear sign of the Samwers’ huge and rather unrealistic ambitions: by comparison, the company’s US original, Amazon, makes just  1.1% in returns. 
I suspect no one of the cloned companies by Samwer Bros. are really profitable or sustainable for the next 5 years, to until 2019 at least; and as they will not be able to sell to the original company they had copycatted, as they failed to sell Affinitas GmbH. to eHarmony Inc. last March 2012 and as the Management Team can not innovate in nothing because they are not entrepreneurs, they will collapse. All cloned companies seem like bubbles.

Please read also:
Rocket Internet AG. Q2 2014 financials via AB Kinnevik

article: Oliver Samwer will die nächsten 25 Jahre weiter ackern
A person saying "I will stay for the next 25 years" means "I will run away in less than 25 months ahead"

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