The key is in the very complicated interlace of "Jade xxxx GmbH." and "Brillant xxxx GmbH." companies.
Jade, Juwel, Brillant, Bambino, Platin and others.
See Jade 1076. GmbH. and Jade 1085. GmbH. as sample
They have big losses because they sell below cost to gain traction. All cloned companies seem like bubbles.
Rocket Internet AG. / All ventures are created using a complex system of shell companies. /
Rocket Internet's Samwer Brothers + AB Kinnevik + Tengelmann Ventures.
From the article "Rocket Internet makes case for €3.3bn valuation" at Financial Times
a (deleted) comment there:
It looks like the FT articles about Rocket Internet in the past few months have been the outcome of Samwer’s PR agency…having said this, below are a few points for thought
-All ventures are created using a complex system of shell companies. This is a fact and very easy to verify
-The purpose of such structure is threefold: record fictitious sales and expenses to avoid German taxes, multiply the number of “consultancy contracts” that the ventures need to pay to Rocket holding and hide cash outflows from the ventures
-The ventures are actually companies without strategy, without sustainable growth, loss making
-Thanks to consultancy contracts and other tricks, the brothers are able to return from their investment in each venture within 2 years, leaving the entire loss to other investors
-KPIs and financials are manipulated and sometimes totally made up. The IT system is unable to provide reliable data and investors simply cannot audit the numbers
If anybody is interested, I’m happy to give more details.
In summary, the brothers did a wonderful job in raising funds and an even better job in creating a big machine with nothing underneath and keeping a cut of the funds for themselves instead of using it for developing the business. But, after all, isn’t it what a large number of ventures founders do these days? Set up a boring online business, make a fancy website and good marketing materials and raise funds to pay their salary for a few months or (if lucky) for a few years? Rocket just did it in a bigger way, fooling tax authorities too
If you want to replicate a big success in Brazil, it will be as hard as the same to replicate it in all European countries, but in this case with 1/8 of population and the majority of the persons DO NOT own or WILL NOT use a credit/debit card to buy online! They will prefer to research online and then buy offline.
Many if not most, USA, Canada or European businesses models are unfeasible in Latin American countries! Perhaps the same situation for Africa, Russia or even Australia.(transportation costs could be 10 times bigger than Europe)
Euros 35 million subsidy for Zalando
Please remember I am the person who denounced them to Interpol last January 2014.