China: Jialebao buys embattled produce e-commerce company
Chinese e-commerce group Jialebao.cc has purchased the acquisition of Yummy77.com, an online produce platform which had announced its closure last month due to financial struggles.
"The acquisition was a strategic decision," said Jialebao representatives during a press conference in the second week of May.
"A forerunner in the online grocery sector in China, Yummy77 offers us established brand and consumer groups as well as experienced global procurement operations and established cold-chain logistics and storage systems.
"We hope to build our own Jialebao brand as a the flagship amongst all of China's fresh produce e-commerce firms, so it was a growth-oriented strategic move for us to acquire Yummy77.com."
The negotiations started in mid-April, says Jialebao. However, as Yummy77.com is undergoing a liquidation process for bankruptcy with certain financial information still unclear, Jialebao is yet to reveal a concrete valuation and specific plans for the acquisition.
"We're still negotiating with many of Yummy77.com's suppliers over the company's delayed payments. As a matter of fact, many suppliers were infuriated with Yummy77.com's closure and computers and servers were taken away from the company's office earlier, which caused the loss of financial data and increased the difficulty of auditing," Jialebao said in a statement.
"And this is also why we were only able to acquire Yummy77.com's brand and some but not all of its assets.
When asked about staff restructuring, Jialebao says a "good number" of former Yummy77 employees had already joined Jialebao and the rest were welcome.
Customer membership accounts affiliated with Yummy77.com will be transferred to Jialebao's membership system, with a potential name change to be confirmed later this month.
Headquartered in Shanghai and established in May 2013, Yummy77.com obtained Series B investment of US$20 million from Amazon in 2014. On April 7, 2016, Yummy77.com suspended its operations due to its dire financial situation.