When Little Black Book (LBB) launched as a blog in 2012, Zomato had already been a restaurant-listings website for four years. But many people still relied on LBB to know which were the new and trendy eateries and watering holes in their city.
Three years later, Zomato decided to venture into food delivery, as the limitations of being just a discovery platform became obvious. LBB, which also posts gifting guides and reviews of clothes and accessories, had a similar challenge. It had to find ways to turn its content into commerce. So, in 2018-19, it rolled out its online store, LBB Shop.
Things started to look good. In the year ended March 2020, LBB Shop accounted for over a tenth of LBB's revenue of US$2 million. Then came - you guessed it right - Covid-19.
Curating local content during the pandemic-induced lockdowns was hard, advertising revenue cratered, and direct-to-consumer (D2C) brands thus far reliant mostly on LBB Shop became opportunistic. They wanted to sell on as many online stores as possible and started working on their own websites and apps.
Expectedly, even when start-up funding seemed to be out of control, LBB's valuation rose less than 10% to ~$16 million in December 2021. Three months later, LBB had stopped onboarding new brands in LBB Shop.
LBB was running out of time, money, and options.
Then, in early August, lifestyle e-tailor Nykaa–also founded in 2012–threw LBB a lifeline by buying it for an undisclosed sum.
Our insightful article today is about the unravelling of a once-promising and popular website, and the pitfalls of the content-to-commerce business model
