In the bustling landscape of India’s e-commerce boom, AskMe emerged as a promising contender, aiming to revolutionize how small and medium enterprises (SMEs) connected with consumers. However, what began as an ambitious venture would soon become a cautionary tale of overreach and mismanagement. This is the story of AskMe’s meteoric rise and sudden collapse, leaving in its wake thousands of jobless employees and a trail of unpaid debts.
The Birth of a Digital Directory
AskMe’s journey began with a simple yet powerful idea: to bring the traditional Yellow Pages into the digital age. GETIT Infoservices, a company with decades of experience in publishing physical directories, recognized the shifting tides of information consumption. In 2010, they launched AskMe.com as a digital classifieds portal, aiming to bridge the gap between local businesses and online consumers.
The timing seemed perfect. India’s retail ecosystem was rapidly moving from print to digital, and AskMe positioned itself at the forefront of this transformation. In 2012, the company expanded its vision with the launch of AskMeBazaar, a marketplace model targeting the smallest SMEs – a segment often overlooked by e-commerce giants like eBay and Flipkart.
Rapid Expansion and Acquisitions
Fueled by the optimism of India’s burgeoning e-commerce market, AskMe embarked on an aggressive expansion strategy. The company diversified into multiple verticals at a breakneck pace:
- AskMeBazaar for general e-commerce
- AskMeFurniture, formed by acquiring Mebelkart.com for $20 million
- AskMeGrocery, launched after acquiring BestAtLowest for $10 million
- AskMePay, a self-made payments platform
- AskMeFin, a FinTech platform for business loans and services
This rapid expansion was backed by Malaysian billionaire T. Ananda Krishnan’s firm, Astro Holdings, which owned a staggering 98.3% stake in the company. With such hefty financial backing, AskMe seemed poised for success.
The Cracks Begin to Show
Despite the outward appearance of growth, AskMe was battling significant internal challenges. The company’s technology infrastructure, crucial for any e-commerce venture, was surprisingly weak. Reports suggest that the database was being operated on Excel spreadsheets, rather than sophisticated CRM software. This led to severe operational issues, including delayed payments to sellers and slow refund processing for customers.
Moreover, AskMe’s leadership team was heavily skewed towards marketing and sales backgrounds, with a noticeable absence of technical expertise at the top level. While this approach helped in rapid customer acquisition and geographical expansion, it left the company vulnerable to technological shortcomings.
The Unraveling
By 2016, the cracks in AskMe’s foundation had become gaping chasms. Orders dropped by a staggering 90%, and the company found itself in a financial quagmire. The ecosystem that AskMe had built began to crumble:
- Buyers were leaving due to poor customer service, delayed deliveries, and slow refunds.
- Sellers faced technical issues and delayed payments, with some reporting discrepancies in commission rates.
- Logistics partners filed legal notices for non-payment of dues stretching over several months.
- Employees stopped receiving salaries, leading to protests in various locations.
The situation reached a critical point when top board directors resigned in June 2016. The final blow came when Astro Holdings decided to exit the company, leaving AskMe without its primary source of funding.
The Sudden Collapse
On August 19, 2016, AskMe abruptly shut down operations, leaving approximately 4,000 employees jobless. The company’s management blamed Astro for the collapse, citing unpaid dues of Rs 300 crore. Astro, in turn, announced plans for a forensic audit of AskMe’s books, echoing a similar situation that had recently unfolded at another e-commerce company, Jabong.
Timeline of Key Events:
- 2010: AskMe.com launched as a digital classifieds portal
- 2012: AskMeBazaar marketplace model introduced
- 2013: Astro buys Getit Infoservices from Network18 group
- May 2015: AskMe acquires BestAtLowest for $10 million
- August 2015: Invests $20 million in Mebelkart
- June 2016: Top board directors resign
- August 19, 2016: AskMe shuts down operations
Lessons from AskMe’s Failure
The collapse of AskMe offers several valuable lessons for aspiring entrepreneurs and established businesses alike:
- Focus is crucial: AskMe’s attempt to compete in multiple verticals simultaneously led to a lack of expertise and resources in any single area.
- Technology is the backbone of e-commerce: Neglecting technological infrastructure can lead to operational nightmares and customer dissatisfaction.
- Balanced leadership is essential: A mix of technical and business expertise at the top level is crucial for sustainable growth.
- Diversify investor base: Relying heavily on a single investor can leave a company vulnerable to sudden funding cuts.
- Customer and partner satisfaction should be prioritized: Neglecting the core ecosystem of buyers, sellers, and logistics partners can quickly lead to a company’s downfall.
- Manage cash burn judiciously: Rapid expansion without a solid revenue model can quickly deplete resources.
AskMe’s story serves as a stark reminder that in the fast-paced world of e-commerce, ambitious growth must be tempered with strategic planning, robust infrastructure, and a relentless focus on customer satisfaction. It’s a cautionary tale that continues to resonate in India’s startup ecosystem, urging entrepreneurs to learn from the past and build more sustainable businesses for the future.
