Zulily, named one of Fast Company‘s most innovative companies in retail this year, is being purchased by the parent company of home shopping network QVC. The flash sale site has floundered in recent months, despite racking up $1 billion in sales during 2014.
QVC’s owner, Liberty Interactive, is allegedly paying $2.4 billion to acquire Zulily–a sum that will benefit shareholders like Chinese e-commerce giant Alibaba, which owns a 9% stake in the company. (In May, when news of Alibaba’s status as a shareholder was made public, the stake was valued at more than $150 million.) Together, QVC claims, QVC and Zulily will earn more than $10 billion in annual revenue.
Zulily targets mothers with fleeting discounts on clothing, toys, and other goodies for children and parents. The site exclusively offers flash sales on its items, which means most merchandise doesn’t last for more than a few days. QVC is one of the most prominent home shopping networks on television; it also has an e-commerce companion site.
Zulily went public in November 2013, and after a surge that saw it skyrocket to a $7 billion market cap in February 2014, skeptics have driven down its stock price to its lowest point as a public-traded company. It’s easy to diminish Zulily—it does everything “wrong,” Amazon will crush it eventually—but it’s also an interesting case in the widening gulf between Wall Street and technology companies.
… A whopping 80% of its orders come from returning customers. Why? Is it merely a validation of the volatile private-sale model that caused other competitors like Fab to crash and burn? Is it a testament to the buying power of moms? Yes, and yes, but it’s more than that too. Zulily has grown its business incrementally, albeit at light speed, solving thousands of tiny daily inefficiencies along the way. It’s hired well, spent efficiently, shunned the hype game, and quietly invested in a flexible and powerful technological infrastructure that emboldens employees to move fast, break stuff, learn from their mistakes, and do just a little bit better next time.
[via the Wall Street Journal]