Tango was valued at one billion dollar when Alibaba invested $280 million in it last year. Unfortunately, after a failed move into e-commerce, Tango Messaging App Company has laid off about 9 percent of its current workforce.
The Tango Shop of the Mountain View-based company that was launched and powered by Alibaba and Walmart back in May this year was closed down and this led to the termination of appointment of about 30 employees of this company.
Eric Setton, who is the CTO of Tango, informed the idea didn’t actually pan out as they didn’t see the conversations they wanted from the deal. He stressed further that despite the fact that there was a considerable amount of traffic, the volume didn’t materialize. The Tango messaging app was recently updated to accommodate the flow out of the e-commerce, but regrettably couldn’t maintain the team working on that program.
Tango now has 270 employees all over its U.S. office and a smaller presence in Beijing, China, subsequent to the reorganization. In spite of the retrenchment, Setton affirmed that Tango is on pathway to have its highest quarter of revenue to date.
However, Setton did not give an update on the current user base of Tango. It was at the launch of Tango Shop in May that the company claimed that Tango messaging app has 300 million registered users. That was not really a big difference to the earlier 200 million registered users announced in March 2014, by the time an investment was made by Alibaba and Tango proclaimed a 70 million monthly active users.
Tango’s user growth is stalling due to lack of fresh user metrics, most especially when there is maturity in mobile messaging and network effects come into play to attract users to the most established and more popular apps.
Tango Shop offered users the chance to find and buy items listed on Walmart or Alibaba Aliexpress.
Tango Shop and the move into e-commerce failed because some other messaging apps are dominating the conversation terrain in the United States. On the other hand, there is differing culture in the U.S. and in-app commerce is striving to be a success in China, where the dominant social company is WeChat with little competition, while U.S. consumers are spoilt for option in terms of social media, e-commerce platforms and messaging.
Setton admitted that social e-commerce is likely to work for other players like Facebook messenger, although the Tango Shop didn’t work out as the company had hoped. He then looks forward to see the strategy adopted by competitors in the future.