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Home > Strategy > Taggle Shuts Shop: A victim of hyper-competition

Taggle Shuts Shop: A victim of hyper-competition


 

Taggle, which raised $1 million from Battery Ventures and Greylock Partners, a few months ago, has shut its shop abruptly. The reason, as given by the Taggle team is hyper competition in the e-commerce space. This is what the team had to say to its customers:

 

“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 care@taggle.com 

Thank You 
Team Taggle. ” 

 

 

Taggle had started as a group buying/ discount deals site and later turned into an e-commerce venture. Although it was able to increase its revenues by a commendable percentage (3 times of its earlier revenues), there was a huge pressure on margins due to a dozen other competitors offering similar services (and ready to take a cut on the margins).

I feel this is a very good decision taken by the team. It is better to live for another day to fight rather than bleed to death. As mentioned in the post on the Taggle website,  they found it better to go back to the drawing board and re-strategize than burn the investor money in fighting the competition with giving discounts.

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