Leadership at e-retailer Choxi tries to restore order and its image

September 14, 2016 02:41 PM

Besieged by angry customers who haven’t received merchandise they ordered, vendors which haven’t been paid, hundreds of complaints to the Better Business Bureau and a slew of critical posts on social media, flash-sale e-retailer Choxi is attempting to avoid the complete collapse of a once highly promising business. It has recently overhauled its top management, and its investors are working to repair the company’s tarnished image.

CEO Deepak Agarwal was forced out by Choxi’s investors in August, and chief marketing officer Vishal Agarwal has left the company as well, according to the retailer. Neither former executive could be reached for comment.

“The circumstances under which (Deepak Agarwal) left are described as pretty typical,” Choxi’s general counsel, Cliff Schneider, tells Internet Retailer. “When a company gets to a certain point in which investors feel things aren’t moving in the right direction, one of the playbook calls is to change management.”

Schneider says no single executive is currently leading the company; rather, it’s being run by investors in a “management by committee” system. “It’s a combination of folks that have a management and a retail background,” he says.

Choxi has raised $52 million across two rounds of funding according to CrunchBase. data shows Choxi did an Internet Retailer-estimated $980 million in sales last year, up 40% from $700 million in 2014. Choxi, No. 48 in the Internet Retailer 2016 Top 500 Guide, faces a litany of suppliers that haven’t been paid and many more unhappy customers. A Choxi consumer complaint page on Facebook has almost 3,800 members for consumers who are upset with the company, which was known as Inc. until it rebranded as Choxi in April 2015. The company also has an “F” rating with the Better Business Bureau in New York, with more than 1,700 complaints closed against it in the past three years. Shoppers have taken to social media to complain that they haven’t been receiving orders are unable to contact anyone at Choxi to report the problems.

Suppliers have complained that Choxi has not made payments on time, and Schneider acknowledges that shoppers weren’t receiving orders because Choxi’s customer service provider wasn’t getting paid on time. “Customer service is outsourced, and that is one of the vendors that wasn’t receiving timely payments,” he says.

Choxi right now has about 60 customer service agents online and a month-long backlog of customer service calls and emails, Schneider says. He says the retailer is in “restructuring mode” to rebuild trust with shoppers and suppliers, and he insists that Choxi will not be declaring bankruptcy despite its recent struggles.

“Words are helpful and sentiment is helpful, but ultimately we need to demonstrate to our customers and our suppliers by actions,” he says. “With suppliers it’s going to be paying them on time. With customers it’s going to be providing good customer service.”

Earlier this week and late last week, calls to Choxi’s customer service line went unanswered, but on Wednesday a representative answered a call. An email to the general customer service address resulted in a response from a customer care representative named Kristof, acknowledging the company’s recent difficulties. The surprisingly frank email from Choxi’s customer service operation sent to complaining customers admits its many problems and begs for patience on the part of its suppliers and customers. It reads:

“We would like to take this opportunity to thank you for your business, loyalty, and patience while has gone through a transition period. We are happy to report that is now under new Management. As a new management team, we are diligently working to clear the backlog of inquiries and shipments. This process will take a while; with more customer service agents coming back online each day and working day and night to get back on track, we will once again have the capacity to address each customer on a timely basis and we anticipate being full (sic) operational within the next 30 days.

"Within this time frame (and as soon as possible) you will be updated on the exact status of your order(s). We are working extremely hard with our suppliers to fulfill all orders as soon as possible. Our goal is to fulfill all outstanding orders within the next 30 days, but because of the number of suppliers involved, it may take up to 60 days. Once your order has processed and is ready to ship, tracking information will be emailed as normal. If you are expecting a refund, we expect that to be fully processed within the next 30 days as well.

"We've made significant changes at Choxi and we plan to be your favorite online shopping site again and once again, thank you for your patience. We sincerely apologize for not being able to respond to your inquiries on a timely basis prior to these changes. If your inquiry has not been addressed as of today, we ask that you send another email (or simply reply to this one) so that our customer service team can assist you right away.

"Thank you again for your business, loyalty and patience and we look forward to continuing to provide you with the products that keep you returning to our website often.”




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