Can’t keep rolling, rolling, rolling

In The Checkout this week, we look at how Indian ecommerce roll-ups handle their first test and weigh in on Meta’s move into virtual clothing. [Read from your browser]( The Checkout 🛒 Welcome to The Checkout! Delivered every Thursday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in ecommerce. If you’re not a subscriber, get access by [registering here](. Written by Qishin Tariq Journalist Hello {NAME} Whenever a new trend rolls into the public sphere, I have to weigh my [FOMO]( against my reluctance to buy into something new. Sometimes it's terrible at first bite, like how matcha was suddenly added into everything. Sometimes, it takes showrunners seven seasons before they send a TV franchise right into the dumpster so close to the finale. But unlike me, venture capitalists generally have less hesitation and way more FOMO. In the case of ecommerce roll-ups in India, it went from a cool new idea into a vertical that attracted millions in investment in just a year. But with similar firms in the US facing issues amid a global economic slowdown, what does it mean for the industry now? In this week’s Big Story, my colleague Samreen digs into whether India’s players have hit a speed bump - or a wall. For the Hot Take, I looked at the Avatars Store, Meta’s latest foray into ecommerce and the metaverse. It’s a huge opportunity, but can Meta go all in without sacrificing its advertising business? – Qishin THE BIG STORY  [India’s young roll-ups may be in for a wake-up call]( Two roll-up ecommerce companies have stunned the Indian ecosystem, hitting unicorn status in less than a year. But are the valuations justified, and how will they weather the current market downturn? THE HOT TAKE Meta’s latest attempt to crack online shopping - but not in the real world Here’s what happened: - Meta is introducing Avatars Store, an online shop that sells digital outfits from luxury fashion brands. Users can get these virtual clothes to customize their avatars on the company’s social platforms. - The move could bring in more revenue to its metaverse efforts, which are reporting billions in losses. - Though character customization is massively profitable in video games, are social media users as willing to spend on as much on their avatars? Here’s our take: When was the last time you updated your Facebook profile photo? While Meta already offers free but limited customization, the new Avatars Store will feature outfits from designer brands, starting with Balenciaga, Prada, and Thom Browne. Branding doesn’t come for free, though. Users will have to pay real cash for these digital outfits, [reportedly]( between US$2.99 to US$8.99 to start - the typical price range for in-app purchases in mobile games. More interestingly, however, CEO Mark Zuckerberg said Meta plans to make the store an [open marketplace]( where developers can create and sell clothing. He noted that such digital goods will be a big driver of the creative economy. But the question is, will selling digital clothes meaningfully push Meta’s social commerce and metaverse fortunes? Or will it prove to be another distraction? Despite going so far as to rebrand the company, Meta’s metaverse bet has only hemorrhaged cash. The company’s Reality Labs operated at a [loss of US$2.96 billion]( in the first quarter of 2022 and [shed over US$10 billion]( throughout 2021. Zuckerberg said the losses will likely get bigger this year. On the creators’ side, how much will fashion brands earn from selling their IP on Meta? And will smaller brands want to participate? While Horizon Worlds - Meta's virtual reality game - has a creator monetization feature, it hasn’t revealed how the profit will be split on the Avatars Store. Those questions remain unanswered, but the opportunity is undeniable. Morgan Stanley estimates that by 2030, digital fashion could be a [US$50 billion industry](. For luxury brands, non-fungible tokens and social gaming could boost earnings by about 25% as well as bring in Gen Z shoppers. To be clear, Meta isn’t the first to enter this space or team up with major fashion labels. Ralph Lauren partnered with a South Korean social networking app called Zepeto to launch a virtual fashion collection. Gucci has also collaborated with online gaming platform Roblox. But none of these players could rival Meta’s sheer reach, size, and resources, which could prove to be the game-changer. Doing so may also propel the company past its social networking rivals [TikTok]( and Snapchat. Ultimately, it will also depend on how much the global giant is willing to invest. As its lagging [social commerce]( strategy shows, Meta’s tried-and-true [advertising business]( is still king. Will Meta risk something that keeps shareholders happy to go all in with a hot new space? – Qishin  NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ Zilingo founders Ankiti Bose and Dhruv Kapoor filed a [management buyout proposal]( for the troubled fashion ecommerce firm, creating a potential comeback for former CEO Bose. 2️⃣ JD.com will [merge the Jingxi Business Group]( with its JD Retail division as the Chinese ecommerce giant continues to restructure. Its other divisions are also at risk. 3️⃣ Dailybox Group, an Indonesian food delivery and cloud kitchen service, has [raised US$24 million]( for local expansion, tech improvement, and brand development. 4️⃣ Singapore-based ecommerce roll-up Rainforest has banked [US$45 million]( in funding, taking its total capital to over US$100 million. 5️⃣ CityMall, a social commerce platform based in India, is [laying off 191 employees]( - or around 15% of its workforce - to align with its “evolving business model.” That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you next week! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. 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