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How Melorra’s Golden Promise Soured
- Melorra, the Indian D2C jewellery brand, is reportedly being acquired by public-listed jewellery firm SENCO Gold for INR 50 Cr ($6.7 Mn).
- This represents a drop of 94% from its previous valuation of INR 1,000 crore ($120 Mn) in 2022 when the firm raised its last funding round.
- Melorra's failure to offer the in-store, ‘touch and feel’ experience to customers, and missing an early move into showroom-based operations, are being seen as reasons for its decline.
- The company has shut down most of its physical store outlets, with many customers having complained about unpaid refunds and poor service.
- It appears to have suffered a cash crunch, although audited financials for the past two fiscal years are not available to verify claims.
- Despite raising funds totalling $72 Mn until 2022, during Melorra's funding spree, the majority of which came from existing and new investors between 2019 and 2022, the firm failed to optimise margins and failed to retain key leadership, including its chief technology product officer.
- Competition from established players that had the operational bandwidth and cash balances to cope with the demand for lightweight jewellery, compromised Melorra’s offerings.
- The firm spent INR 120 Cr ($16 Mn, approx) on advertising in FY22, a 175% jump from INR 43.7 Cr ($5.9 Mn) from the previous year.
- Marketing spend was required to help compensate for the high capex of opening new retail outlets, which were opened in malls and high street locations.
- Data from Data.ai shows that Melorra's active user base was low compared to the competition. Over the last five months, its average monthly active user base was just 129K, compared to BlueStone’s 545.2K.
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