With global retail ecommerce sales spiking by 27.6% in 2020 and expected to account for more than $6.5 trillion in sales by 2023, the industry is rife with competition – to stand out from the crowd, companies will need to devise creative solutions that tackle pertinent pain points.
Furthermore, as Hans Tung, Robin Li, and Lucas Mussi aptly identify in their joint piece on the state of ecommerce, it is considerably better for ecommerce companies to build their solutions on open systems. This is because such systems afford greater freedom and flexibility for innovation, “cemen[ting] winning strategies through proxy investments, strategic alliances, and specific product offerings.”
In this article, we spotlight three of GGV Capital’s portfolio companies – JOKR, Flieber, and Snappy – and the measures they’ve taken to change or enhance the ecommerce business.
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JOKR: 15-minute grocery deliveries
In today’s fast-paced world, efficiency is key to ensuring the survivability of a business. And ecommerce is no exception. In fact, 56% of online consumers between 18 to 34 years old expect to have same-day delivery. 61% of these consumers are even willing to pay more for this service.
Equipped with this fundamental appreciation of efficiency, JOKR was born. Founded by Ralf Wenzel, the New York-based startup promises to deliver all grocery orders within 15 minutes or less with no minimum spending. It is even able to deliver on its promise without charging its users delivery fees.
Sounds too good to be true? As it turns out, JOKR can maintain this business model – and very effectively at that. It sets up micro-hubs around side streets in metropolitan areas and uses data to predict what customers want, when, and where.
JOKR also uses data to build a dynamic inventory and catalogue management system. This allows it to rotate its inventory easily and even provide its delivery services at any time of the day.
The moment the JOKR app receives an order, it springs right into action, gathering everything and making sure it is delivered within 15 minutes.
The best part of it all is that the delivery is free. On top of that, the groceries themselves aren’t expensive, as they are directly sourced from brands, manufacturers, and wholesalers.
As Ralf explains,
“We are a platform that is not relying on any type of consumer charges. Hence, the business is predominantly a business that generates revenue out of the respective product costs.”
JOKR operates on a plan that works, securing $170 million in its Series A funding round in July 2021. With this investment, Ralf aims to continue the startup’s expansion, focusing on local product offerings and sustainable delivery and supply chains.
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Flieber: Inventory optimisation
Fabricio Miranda, founder and CEO of Flieber, has never always had an interest in ecommerce, having founded a water treatment company in Brazil before coming to the USA to work at a hedge fund. It was only when he encountered someone opening an Amazon store at the hedge fund that he switched gears and entered the ecommerce world as an Amazon seller himself.
As an Amazon seller, he identified a key pain point: retailers constantly ran out of stock. This is especially problematic when a retailer runs out of stock for their more popular items and overstocks less popular ones. This poor inventory management leads to a loss in sales and overall revenue.
Flieber addresses this issue and helps retailers better understand their inventories. Data is key to Flieber’s operations, which it harnesses to advise online retailers on how best to optimise their inventories, deciding which products to sell and at what quantity.
Apart from that, Flieber’s technology also keeps an eye on its clients’ sales. Depending on how their sales are performing, retailers will be advised to ramp things up or slow down their pace.
Fabricio describes Flieber’s business model as such:
“We are all the time projecting what you need and when to launch a new product. If a retailer’s product is similar to another product, the system is also able to predict how well that similar product will sell.”
Flieber stands as an excellent example of identifying an overlooked problem and then working on a viable solution to address it. In this case, inventory optimisation is an obvious ecommerce issue that presents an opportunity.
That is why Flieber secured $12 million in its Series A funding round in September 2021. As Carlo Dapuzzo, partner at Monashees, aptly describes:
“Marketplaces and platforms have made selling products really easy. But everything that happens until you have the product in inventory ready to be sold is still extremely complex. Flieber’s mission to democratize that part of retail is a much-needed step for the future of the retail industry.”
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Snappy: Gifting made simple
The act of gift-giving should be a simple process: the gifter purchases a present, and the recipient receives it. Yet things get tricky when the recipient does not want the gift. In turn, this has caused at least $100 billion of returns to be racked up and processed annually.
This problem caught the attention of Dvir Cohen and Hani Goldstein, who responded by founding Snappy, an ecommerce gifting platform that aims to help users send personal gifts in a manner that is “simple, fun, and stress-free.”
True to its vision, Snappy’s gift-giving process is easy and fuss-free: recipients get to choose their desired gifts before delivery is confirmed. This way, the frequency of returns is reduced, in turn leading to less wastage. While the solution may seem obvious at first glance, it went completely under the radar until Snappy came along.
As Hani describes,
“Part of our success is our focus on the fun of the experience and creating magical moments that will surprise and delight recipients. Our goal is to become the go-to global gifting hub for anyone who wants to send a gift.”
Snappy’s straightforward strategy works, and that’s why it was able to secure $70 million in its Series C funding round, pushing its total funding to over $100 million.
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Shaking up the ecommerce game
As JOKR, Flieber, and Snappy show, staying ahead in the ecommerce game doesn’t necessarily require enormous amounts of research and analysis to figure out the most viable solutions. The problems may be glaringly obvious – all that’s left is to identify these and put together a solution that directly addresses them.