Vimjo

What did it do?

Vimjo was an Istanbul-based e-commerce site launched in 2010 to sell more than 25,000 personal care products, from oral and dental care and home medical devices to cosmetics and healthcare products. It became known for its TV adverts, promotions and fast delivery within Istanbul. The company also opened a physical shop in Ümraniye and planned to build a nationwide network of stores.

Why did it shut down?

According to a 2012 report in the Turkish daily Sabah, Vimjo was unable to sell the goldenberry ('altın çilek') capsules it had stockpiled in large quantities after the product was banned following deaths linked to counterfeit production, and it slid into a financial crisis. According to the same report, former executives said uncontrolled spending had also played a part; millions of dollars had been paid for adverts featuring celebrities. It was also reported that the technical infrastructure and distribution system had not been set up properly. Sabah wrote that nearly 40 creditor companies had filed enforcement proceedings over claims worth millions of dollars. Turkishtime also noted that the site closed in 2012 with debts of millions of dollars, and that the main causes were stock management and a lack of corporate governance.

The story

Vimjo's story began in a small shop in Istanbul owned by the Küçükoğlu family from Aydın. According to Sabah, Murat Küçükoğlu got into business selling slimming products online, then began marketing personal care products imported from Europe and other countries through Küçükoğlu Gıda. Run together with his brothers Mehmet and Mesut Küçükoğlu, the business turned into a large e-commerce venture under the Vimjo brand in 2010.

At a press conference in September 2010 the targets were ambitious. According to a report by BThaber, general manager Ahmet Hakan Özgür said they would have invested more than USD 15 million by the end of 2010 and that the site offered more than 25,000 products, from oral and dental care to cosmetics. Vimjo cast celebrities in its TV adverts, promised delivery within a few hours inside Istanbul and opened its first physical shop in Ümraniye. The plan was to reach 3 shops in Istanbul and 17 nationwide. Membership rose to 130,000.

By March 2012 the picture had changed completely. Sabah wrote that the company had reached the point of halting operations. According to the report, Vimjo had stockpiled large quantities of goldenberry capsules, one of the most popular products of the day; when the product was banned following deaths linked to counterfeit production, that stock was left on its hands. Former executives said uncontrolled spending, above all expensive adverts featuring celebrities, had also put the company in difficulty. The site had become unable to deliver products to customers, and online complaints ran into the thousands. According to the same report, nearly 40 creditor companies had filed enforcement proceedings against Vimjo over claims worth millions of dollars.

Years later, in a list of failed start-ups it compiled, Turkishtime wrote that Vimjo closed in 2012 with debts of millions of dollars, and that the main causes were weak stock management and a lack of corporate governance. Presented as one of the biggest investments in the sector, the venture passed into history in less than two years.

Lessons for founders

• Loading up on large stocks of a single popular product puts the whole company at risk when that product is banned.
• Your advertising budget should grow in proportion to revenue and unit economics.
• Get stock management and distribution on a solid footing before aiming for a network of stores.

Sources

1. "vimjo.com" wants to be the one-stop shop for personal care (BThaber, 2010-10-11)
2. It was the biggest e-commerce investment (Sabah, 2012-03-30)
3. 50 failed start-ups and 50 lessons from their mistakes (30–50) (Turkishtime, 2016-05-23)

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