May 25, 2022

Today, gamification and social hooks have become a cornerstone in all categories of consumer applications, and today Europe is announcing a series of launches using them to create a new e-commerce platform that drives its growth. Blidz is a social media shopping app that offers big discounts on items based on the number of people who come to buy them (many items in categories like jewelry, clothing and gadgets sell for $0.99) and then to users offer a selection of games in addition to unlocking. More Deals – An initial funding round raised €6 million ($6.6 million at current rates) after an initial increase of 50,000 users per month.

General Catalyst is one of a group of American venture capitalists that has focused more on supporting startups from Europe in recent years — and European venture capital Peak are leading this round. D4 VenturesI Fabric enterprisesI FJ Labs and previous financiers IPR.VC also participates along with some individuals: Youngmi Moon (Harvard professor of digital economy), Christopher North (formerly a longtime Amazon executive and now mostly an investor), and Don Hoang (former Uber and Revout executive).

if you are fatty The description of Blidz seems a little familiar to you from the world of social shopping, and perhaps because it’s pretty much a clone of, in particular, Pinduoduo, a hugely successful social shopping game app in China, which CEO Lasse Dirks, who co-Markus Haverinen (CPTO), cited as direct inspiration.

“We saw the Pinduoduo trend, learned how the model worked, built it, and launched it on the market a year ago,” he told me in a recent business interview.

The fortunes and challenges of Pinduoduo are noteworthy when you think of Blidz: The Chinese platform currently has a market capitalization of around $60 billion (listed on Nasdaq in the US) and around 870 million active buyers. slowed down due to increased competition and the weakness of the Chinese economy as a whole. This speaks to the great potential of Blidz, but also to some of the same long-term growth challenges.

However, long-term goals seem like a distant idea for a startup that is only a year old at the moment. Like Pinduoduo founder Colin Huang, Dirks told me that he saw an opportunity to not only bring to market a offering different from Amazon’s dominance, but Amazon’s approach to e-commerce, which essentially built other trading platforms (embedded). . To scale with more SKUs, optimize personalization, search and advertising to show products to potential buyers, improve margins by offering your products with this and/or other logistics savings).

“Our goal is to free Western consumers,” Dirks said. “We want to provide Western consumers with a better and cheaper shopping experience.”

He says there are two ways to go about this proposal. First, it is a frontal experience. Using gamification (there are currently four games on Blidz and more to come), Blidz also uses social hooks (share your offers on the timeline and in messages to friends and groups!) with its own network effect. They are used when recommending products. people they know through other social channels and convince people by seeing how many other people are buying them, which causes the price to drop.

(Actually, this was a gimmick that was used back in the pre-Internet days, originally designed for home shopping on a live TV show where people were encouraged to buy things.)

Second, Blidz has the option, like Pinduoduo before it, of accepting much lower sales margins in exchange for selling more products.

Translating this into today’s Internet landscape in regions like Europe and the US was not difficult given that there is very little difference in the market right now.

“Today, 60% of e-commerce in Europe is dominated by Amazon and then taken over by many others. We believe there is a monopoly on getting the price.” “Ultimately, the company’s vision is to provide Western consumers with a better and cheaper shopping experience.”

The solution, he believes, is to accept a very low markup on goods sold and aim to sell more to make up the gap. According to him, Chinese pinduo couples sometimes earn as little as 0.5% of sales. “That’s a 60 times difference compared to, for example, Wish.”

China plays another important role for the company, in addition to being the market that gave birth to the platform that inspired Blidz: it is also the main country in the supply chain for goods sold on Blidz. Here’s the reality of commerce: While there are signs that some startups are building business models that enable more production and production closer to customers, China remains an important supplier to the broader consumer market. long wait. I

“We are building a supply chain in China where we have a team of ex-employees. They do it for us,” Dirks says. It’s not about buying cheap stuff, it’s about using the new generation of products coming out of the country’s factories that are good and sometimes better than average. He then buys them in bulk according to a concept he describes as “value for money”.

“We don’t want to work with every supplier. We want to work with the elect.” This supply cut puts Blidz in a better negotiating position, he said. “They are waiting to get on board. The ultimate goal is to shine this space,” he said, referring to the Chinese fashion sensation that used its direct relationships with apparel and accessories manufacturers to achieve high levels of quality and then produced those items. Sells only directly to consumers.

The social retail space is littered with many companies that look like rocket ships, only to have their engines burn out before they reach long-term stratospheric orbit. Dirks doesn’t think Pinduoduo and Ab Blidz are comparable. “We can’t believe Groupon or LivingSocial have ever been this social,” he said, because they never used their social people cards in their sales approach. They also focus more on experiences than products in their DNA, although Groupon’s accessories business has changed somewhat of late.

The ability to expand this model to more markets and perhaps accept more local variations, as well as take away what seems to be a loyal user base for now, along with selling ideas to lead investors so they can move sufficiently.

IThe Blidz founding team has a unique understanding of the evolution of online commerce,” Adam Wolkin, MD, General Catalyst, said in a statement. They are creating a new experience for customers in the West by integrating social media, gaming and shopping in a data-driven, entertaining and easy-to-use platform. We’re excited to see what comes out of this talented team.”

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