Zilingo is on a roll. Less than a year after grabbing US$54 million in Series C, the Singapore-based online fashion marketplace has just closed a massive US$226 million round with some of the best VCs in the world to expand into new markets in Southeast Asia.
CEO Ankiti Bose, who comes from a business analyst background, has been heading the company since its inception in October 2015. The startup is already making waves in the online fashion industry in the region and has been registering a steady growth for a while.
e27 had a chat with Bose to know about Zilingo’s growth story and future plans.
Below are the edited excerpts from the interview:
US$226M is a hell lot of money for an under four-year-old online marketplace, and this round comes less than a year after you raised US$54M in Series C. What is so special about Zilingo that has attracted the best investors to this round?
Zilingo is a commerce platform that is making the fashion and beauty supply chain more efficient through technology. Zilingo connects businesses across the entire supply chain and empowers them with everything they need to run a business — from design, product development, fabric procurement, manufacturing, cataloguing, marketing, inventory management, distribution, billing, customer service, working capital and trend forecasting.
By creating inclusive growth for businesses in fashion and beauty, Zilingo is democratising the industry and bringing the best value, the latest trends and the widest choice to fashion and beauty shoppers anytime, anywhere.
So in essence, we’re not just an online marketplace. We’re a full-stack commerce platform that’s unlocking efficiencies across the whole supply chain. We’re aggregating and digitising a US$3-trillion industry, a majority of which extremely fragmented and needs investment and infrastructure to evolve.
So we see a multi-hundred-billion dollar opportunity, and we believe we’re not even one per cent done!
With this, you have raised US$308M in total. Is much of your earlier investments exhausted already? In which areas and markets have you been spending investment the most?
We think capital raising and capital spending are delinked. Fortunately, fashion is a high margin segment and this means that we can invest our capital into long term avenues of growth. We’ve spent the last few years building and expanding our tech stack so that a large number of merchants in the fashion supply chain can use it — whether they are big or small.
Indonesia has been a focus market for us and we see immense opportunity in scaling the business here. Going forward, we’re also looking at the Philippines and Australia as key markets to expand.
How have been your brand building activities going on? Now with a deep pocket, are you looking for innovative ways to reach out to more fashion lovers in Asia?
We’re continuously experimenting with brand building and implementing creative campaigns to reach more people in all our markets. We empower the teams in our local markets to create viral and interesting brand campaigns that are localised and deployed across all effective channels in that geography. Our teams on the ground know best what marketing and branding resonate with our audience.
One of the key concerns for any VCs, particularly in Asia, is that e-commerce companies are burning massive dollars for customer acquisition. What has been your experience? Is it really wise and sensible to spend money on offers and discounts? What has been your strategy so far?
What customers want in Asia, and I believe everywhere in the world, is the best product, the best pricing, the best variety, the best quality. One way to achieve growth is definitely through deep discounting and in some cases this may be effective, but that is not a path for us. In the long term, it’s critical to improve the entire supply chain so that customers are getting value for money without businesses having to burn money at every step. Our focus is on giving the customer the most value for their spend, and that can be done very effectively and sustainably by empowering merchants to be more efficient.
Growth through acquisitions/mergers is one of the best strategies for companies expanding geographically. Have you ever looked at this scenario? Do you see any companies with good synergies in Asia for acquisition?
We do see some opportunities for acquisitions — but primarily to add to our technology stack. We haven’t yet identified any good synergies with existing companies but we are looking out for interesting and novel technology that can add value to our merchants.
In the funding press release, you mentioned you will use the fresh financing to “invest in the infrastructure and technology needed to further integrate and digitise the fashion and beauty supply chain”. Can you elaborate more on this plan?
The fashion supply chain today is highly fragmented and disaggregated. Most of the manufacturers and raw material suppliers are completely undigitised. A majority of businesses in this industry are not equipped with the technology that can help them scale. We need to invest in the infrastructure needed to bring these businesses into the modern technology-driven ecosystem we’re building. This means a lot of coaching, education and skill development to enable entrepreneurs to harness technology effectively.
We’re also investing in building out the product so that every use case for the merchant is covered and that the platform is effortless to use. This is a continuous investment in developing and scaling our software to make sure it’s accessible to all.
The Philippines, Indonesia and Australia are the three markets that you are expanding to in 2019. What opportunities are you seeing in these markets? Why did you pick three different markets with different fashion sense and culture to expand to in this calendar year?
Each of these markets for us poses a market opportunity. Indonesia and the Philippines are large, high growth markets where the fashion and beauty industry has a lot of potential. At the same time, there are few players serving merchants in the industry with a full-stack solution.
In Australia, the fashion consumer has high per capita income and the population is sizeable. It’s one of the fastest growing fashion and beauty markets in the world. Meanwhile, fashion manufacturing and supply in Australia is still originating from Asia and we see ourselves making these routes more efficient.
Can you talk more about the Philippines market? Why did it figure in your 2019 expansion list? Is fashion e-commerce fast evolving in the country? What is so unique about it?
The Philippines is the second largest market in Southeast Asia in terms of population, and with e-commerce and digitation starting to take hold, merchants are hungry for tools to help them grow, but they have very little access to technology and software they need. So we see an open playing field here.
Some experts opine that offline is the future of online commerce? How do you look at this view? Do you think e-commerce companies will eventually have to set up offline stores to survive? Do you think this is applicable for fashion e-commerce as well?
We believe that the future of retail is in meaningful experiences. There will be seamless integration between online and offline. Especially in fashion, touch and feel and delight will still be relevant. So we don’t see offline going away in fashion and beauty. Instead we want to make the lines blurred between these two worlds.
Can you share more details about your B2B offerings Zilingo AsiaMall and Z-Seller platform?
Zilingo Asia Mall is our sourcing solution for brands, SMEs and labels. Through the Zilingo platform, they can access manufacturers and suppliers globally from the world’s fashion supply hubs. Through us, merchants can have a smoother process during sourcing and they can enjoy pricing as efficiencies are unlocked.
Z-Seller is the console/SaaS tool that every business on Zilingo uses to manage his or her business. Everything from procurement to inventory management to pricing to shipping and distribution can be managed through the software. Merchants can also use the platform to unlock other services like cataloguing, marketing and financial services.
In an interview last year, you told me that “blockchain has been on our minds for sometime now, and we recognise its potential in solving problems of distributed trust”. Any progress on this yet?
We are experimenting with solving for trust in interesting ways. Blockchain remains an area of interest and we will talk more about it soon.
Where is fashion e-commerce in Southeast Asia heading for? What are some of the key trends you read currently?
Southeast Asia is at the cusp of rapid growth. With higher per capita incomes and high social connectivity, fashion trends spread fast and often die just as fast. Instagram and celebrities drive fashion choices today more than ever before and street culture is on the rise. Being responsive to these trends is critical if you want to always provide consumers with the trends and styles they’re looking for at an affordable price.
Commerce in general is also moving away from traditional browse, click, shop experiences to more entertaining experiences for the consumer. Livestream shopping with KOLs and shopping games are a trend that’s entering the market fast. It’s no longer just about utility, it’s about delight and entertainment as well.