Gamification and social media have become cornerstones in every consumer app category these days, and today, one of those that is using them to build a new e-commerce platform in Europe is announcing a seed round to boost its growth is Blidz. This startup is a social shopping app that offers deep discounts (many items in categories like jewelry, clothing, and gadgets are sold for just $0.99) on products based on how many people gather to buy them, as well as presenting users with a selection of games. . On top of that to unlock more offers, it has raised $6 million in a seed round of funding after seeing its initial growth reach 50,000 monthly users.
General Catalyst, one of a group of US venture capitalists that has paid increasing attention to Europe's startups, and European VC Peak are jointly leading this round, with D4 Enterprises, FJ Laboratories and previous sponsor IPR, along with with a few people: Youngme Moon (the Harvard professor who focuses on the digital economy), Christopher North (formerly a longtime Amazon executive, now primarily an investor), and Don Hoang (the former Uber and Revout executive) .
If you are acquainted with the world of social shopping and the description of Blidz It sounds a bit like, it may be largely thanks to the fact that it is a clone of existing projects, specifically of Pinduoduo, the highly successful gamified social shopping app in China, which CEO Lasse Diercks, who co-founded Blidz with Markus Haverinen (CPTO), cites as direct inspiration.
“We saw the trend of Pinduoduo, we learned how the model worked, we built it and presented it to the market a little over a year ago”, he says matter-of-factly.
The successes and challenges of Pinduoduo are keys that are worth contemplating when thinking about Blidz– The Chinese platform currently has a market capitalization of nearly $60 billion (listed on Nasdaq) and nearly 870 million active shoppers, although recent growth has slowed due to increased competition and the weaker performance of the Chinese economy in general. This generates focus on the potential for Blidz, though also from some of the same long-term growth problems.
However, longer-term challenges seem like a distant consideration at the moment for a startup that is only a year old. Like the founder of Pinduoduo, Colin Huang, Diercks says he saw an opportunity to bring a different offering to the marketplace beyond Amazon's domain, but also his, Amazon's, approach to e-commerce that was essentially being replicated by other marketplace platforms (built to scaling with a large number of SKUs, optimizing personalization, search and ads to show products to potential buyers, improving margins by providing your own products alongside these and/or other logistical economies of scale, …).
| SKU | Stock keeping unit It is one of the fundamental elements to control and manage the stock in the warehouse. SKU is the unique reference number of a product, as it appears registered in the company's system. |
"Our vision is to liberate Western consumers," Diercks said. "We want to offer Western consumers a better and less expensive shopping experience."
In his opinion, that offer is approached in two ways. First of all, it is about the frontal experience. Using gamification (there are currently four games in Blidz, with plans to have more available), Blidz also uses social linking (sharing the purchase in the message history with friends and groups) to engage users, causing them to create their own network effect by recommending products to people they know through social channels, and so that they are convinced of buying products by seeing how many others are also buying them, and as a result, the price is reduced.
In fact, that has been the technique used in the pre-Internet days, pioneered by home shopping live television shows where people phoned in to buy products.
Second, there is the choice Blidzas Pinduoduo before, you are doing to accept a much lower sales margin in exchange for selling more units.
Translating that to the current Internet landscape in regions like Europe and the United States was easy, as the market and motivation are the same.
“60% of e-commerce in Europe today is dominated by Amazon, and then a long list of others like it. We think there is a monopoly on price marking,” he said. “In the end, that is the vision of the company, to offer consumers a better and less expensive shopping experience.”
Blidz he believes the solution is to accept a much smaller margin on goods sold and simply aim to sell more to make up the difference. Pinduoduo in China, he said, he sometimes earns as little as 0,5% off a sale. "This is a 60x difference compared to, say, Wish«.
China is playing another key role for the company beyond being the market that gave rise to the platform that is the inspiration for Blidz: It is also the key country in the supply chain of the goods that are sold in Blidz. That's the new reality of trade: Although there are signs that some startups are building business models that encourage more production of goods closer to those who buy, China remains a key supplier to the global consumer market, and it will be for a long time. .
“We are building a supply chain in China where we have a team of ex-boys from Wish. They are building this for us,” Diercks said. It's not about buying cheap products, it's about taking advantage of a new generation of products coming out of the country's factories that are just as good and sometimes better than the average offerings. He then buys them in bulk, in a concept he described as "quality at price."
“We don't want to work with all providers. We want to work with a select number,” she said. "And that supply constraint seems to be giving Blidz better bargaining power,' he added. “They are waiting to come aboard. The ultimate vision is to be the Shein of this space,” referring to the Chinese fashion disruptor that has leveraged its own direct relationships with clothing and accessory manufacturers for a higher level of quality and then sells those products directly to consumers. .
The social shopping space is littered with many businesses that appeared to be rocket ships, only to shut down their engines before reaching long-term stratospheric orbits. Diercks does not believe that Pinduoduo, and now Blidzare comparable to these. "We don't think Groupon or LivingSocial have ever really been that social," because they never really leveraged people's own social graphs in their approaches to selling. They are also more focused on experiences than products, even recently Groupon's goods business has changed somewhat.
The potential of Blidz is to build your model for more markets and collect more variants and improvements in the process, with a loyal user base. These factors have been enough to sell the idea to the main investors involved.
“The founding team of Blidz has a number of unique ideas related to the evolution of online commerce,” said Adam Valkin, MD of General Catalyst. “They are creating a new customer experience in the West by combining social media, gaming and shopping into one data-driven, user-friendly and entertaining platform. We are excited to see what emerges from this talented team.”
