TSMP Law Corporation partner Felicia Tan was quoted in a Straits Times article on 19 September 2021 for a follow up feature article on the demise of Reebonz, the online platform for trading luxury second-hand goods.
She said that Reebonz has been troubled for a long time: “Despite having raised millions in capital, it has failed to turn a profit for over a decade.”
She also said the company’s removal from the Nasdaq points to investors not trusting its business strategies.
The biggest problem Reebonz likely faced was poor cash flow as it has expanded aggressively in the region, even amid an increase in customer complaints that they had not been paid for sold consigned items, she added.
She said the pandemic-induced growth in e-commerce has not been uniform across platforms.
“Reebonz’s customers lie at the mid to lower-end of the luxury market, and might have suffered disproportionately due to job losses and pay cuts”.
She commented that the global surge in e-commerce has also resulted in more competition for Reebonz.
This is not just from similar third-party platforms but also mass luxury brands selling their products on their previously for-information-only websites, with discounts that could rival those from third-party platforms.