Indiaplaza looking to Ctrl-Alt-Del its operations, negotiating dues with sellers

India’s one of the old timers in online retailing Indiaplaza, seems to be going through rough patch. As per various sources, the company may be struggling with cash flow situation with debt and is looking for a ctrl-alt-del to restart its operations with fresh funds.

Like many other Online Retail companies, Indiaplaza also works with sellers on credit, with total payable amounting upwards of Million USD. As per some of the sellers we talked (on condition of anonymity), the company is now offering them a choice to settle dues @ 50% of total value. This, as mentioned by sellers, is an attempt to clean up company liabilities so that it can raise fresh capital. In lieu of these settlement the sellers are asked to provide a No Due Certificate to the company.

It is also stated, that similar process was adopted by Indiaplaza few years back, when an investor finally underwrote all seller liabilities of the company.

On contacting Vaitheeswaran, CEO, Indiaplaza, to know the exact scenario of Indiaplaza, he neither accepted nor denied the information and said, “We are always in discussion with vendors on various matters, that is confidential, we can’t disclose in Press.”

As per the Alexa rankings, the traffic on Indiaplaza has fallen dramatically in  last 6 months.

The company is certainly looking to raise funds from last few months, and in words of Vaitheeswaran it is difficult to raise funds in this market, he also said that Indiaplaza will be raising funds in a short span of time. But according to one of the ex-employee of Indiaplaza, the company had already raised a round from a big brand and the above activity is to clear up the dues and start fresh.

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This is not something new for Indiaplaza, before also in 2011, prior raising funds the company has merged two of entities ( and  into single brand i.e. in February and later on in April it had raised $5 million in funding through a fresh issue of equity, from NEA – IndoUS Venture Partners.

Indiaplaza Timeline

Vaitheeswaran founded the company, at that time it was known as In 2002, the name of the company was changed to Fabmall, which had two business formats i.e. an online platform and an offline chain of grocery stores. In 2006, the Aditya Birla Group acquired the Fabmall chain of grocery stores, known as the More chain of stores. After this the name was changed to In January 2007, acquired US-based and created India-centric online shopping company with two distinct websites, to serve customers in the US, and to serve customers in India. In February 2011, the company merged both websites into a common single website, to serve customers worldwide.

Sellers on receiving end

With growth on ecommerce in India, all major online retail companies were supported by sellers, selling their products at the back. Right from Indiatimes, Rediff, days and till today when marketplace is a common trend, it is the sellers who back product demand of ecommerce. However somewhere in rush of ‘consumer satisfaction led valuation, these sellers are getting ignored.

Though all companies claim to have seller protection program, but sellers are generally left out in conversation. Recently when issue surfaced, there were many sellers with their money stuck with Timtara; however, market talked mostly about consumers. Iamwire believe that sellers play a very important role in ecommerce ecosystem and there must be programs to neutrally help sellers against these issues either by consumers or online retail cos.

  • Huckleberry Finnlock
  • Taha Khan

    India plaza has become cheaters, we as a vendor in this competitive world provide best and cheap rates to these fraud people with the credit period of 1 month and we land up paying 50 % from our pocket after blocking money from 6 months

    I strongly believe we all India plaza vendor have unity and fight together

    I am making all the list of Vendor, who has been effected by India Plaza and we fight together

    Be rest Assured we will get our money back not with 50% but with 100%

    Leave your name, number, email id, Amount, since when payment is pending


  • matrixinnovation

    Dont know how ecommerce can think of stepping on vendor due , or for that matter discounting on vendor dues and to re establish itself.

    Had discussion with many a vendors who are ready to go to any extent to get their money back from

    I am one of the vendor who has my money struck with them since November 2012

    Sad enough to say , ” some time back there was a technical glitch in backend and any vendor was able to download all the sku , vendor and purchase price if he was having a backend panel.

    We matrixinnovation called him at midnight to update him about this malfunctioning.

    Did’nt know we were to be axed with our payments.

  • Kartik Mehta

    As a seller , i think 2013 will be the year when the so called ecom bubble will burst !

  • Vebb

    Quite surprising to note that vendors are agreeing to a 50% cut on their legitimate dues. This is not the first time that Indiaplaza has taken this route. There should be a concentrated and a serious action taken against such perpetrators as this amounts to fraud. If this is the situation with vendors, fail to understand as to what would be the fate of employees… it is been told that they have not been paid for the last 6 months or so

    • Vishal Jain Jain

      Indiaplaza the reputed brand run and managed by industry expert
      and pioneer Vaitheeswaran, founder and CEO is under big crisis.

      The company has stopped paying it vendors and there are “n” numbers
      of vendors whose payments are on hold due to unavailable of funds.

      The reason provided by great “Damager” of the company is
      that there are expecting funds from Mr Pram whose in USA and waiting for some

      I am a backend service provider of India Plaza and our more than
      5lks is outstanding which India plaza is unable to pay due to unavailable of funds
      and company is asking for us for some settlements.

      We have not agreed as no formal email is been sent by the Vaitheeswaran,
      founder and CEO of the company.

      Last sentence over the phone with my Vaitheeswaran, founder
      and CEO is we are shutting our shops and asking for settlements. I am leaving
      the company and not responsible for your funds.

      Raising my Voice legally and sending notice to India Plaza.

      Why such irresponsible people should be given
      position in industry who cannot answer a vendor on the outstanding payments.

      We need to educate other to not to compromise and
      get in trap of Mr Vaitheeswaran.

      Vaitheeswaran is taking about integrity and
      providing services in industry but he not able to manage his own baby

      I have personally read articles about his Point
      of view on Ecommerce industry but all goes to vain if you are not the follower
      of standards made by you.

      SHAME of such aperson.

  • Arrow

    The problem is IP never innovated, they refused to change or for that matter even considered change in either the business model, category mix, sellers or mgmt. It became pretty boring to even type, it was too downmarket for a lot of people to do that, did not build brand either. Consumers are and were never loyal, so innovate to stay relevant, that never happened too. On top of it, they raised a meager $5Mn, how the hell on earth was it ever going to be enough for a player who had been around for 12 yrs and built a sizeable amount of liabilities. it was negotiating with sellers even then & delaying payments. Wonder why investors don’t ever see that. In a very interesting conversations, I heard an investor telling an enterpreneur…you know we are not looking at regular ecommerce, when asked what was he looking at, he said not sure…Im quite sure he was waiting for someone to come and tell him a great, sexy story about a way to do ecommerce popular in siberia and he would have invested. One big fund invested one big ecommerce co based on a story of warehouse mgmnt which turned out to be FAKE, the same co also co-invested in the same cos shoe verticle, it’s in their face, now we see investment going into the offline MLM model. So now we invest in sarda group kind of cos?? Guys wake up, invest only if you understand the business and people behind them. Forced NOCs from sellers, mktng cos and other creditors will not ensure, you investment is safe. No wonder we have no eBay, Amazon, Etsy & Fab, only hollow & shallow stories that do not sustain w/o $10Mn mktng spends. I love being a consumer today, neither an eComm enterpreneur nor a seller. I’ll wait till investors run out of moneys or options to recklessly invest.

  • Mohit

    In India, and i think elsewhere as well, market is tilted towards consumers. Sellers, even with best of the intentions, are always ignored…