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February 24, 2019
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supply chain

E-commerce startup Zilingo raises $226M to digitize Asia’s fashion supply chain

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If you’re looking for the next unicorn in Southeast Asia, Zilingo might just be it. The 3.5-year-old e-commerce company announced today that it has raised a Series D round worth $226 million to go after the opportunity to digitize Asia’s fashion supply chain.

This new round takes Zilingo to $308 million from investors since its 2015 launch. The Series D is provided by existing investors Sequoia India, Singapore sovereign fund Temasek, Germany’s Burda and Sofina, a European backer of Flipkart -owned fashion site Myntra. Joining the party for the first time is new investor EDBI, the corporate investment arm of Singapore’s Economic Development Board.

Zilingo isn’t commenting on a valuation for the round, but a source with knowledge of the deal told TechCrunch that it is ‘a rounding error’ away from $1 billion. We had heard in recent months that the startup was getting close to unicorn status, so that is likely to come sooner or later — particularly given that Zilingo has made it to Series D so rapidly.

Raising more than $300 million makes Zilingo one of Southeast Asia’s highest-capitalized startups, but its meteoric growth in the last year has come from expansion from consumer e-commerce into business-to-business services.

CEO Ankiti Bose — formerly with Sequoia India and McKinsey — and CTO Dhruv Kapoor first built a service that capitalized on Southeast Asia’s growing internet connectivity to bring small fashion vendors from the street markets of cities like Bangkok and Jakarta into the e-commerce fold.

Zilingo still operates its consumer-facing online retail store, but its key move has been to go after b2b opportunities in the supply chain. That’s to say that it is building a network of supply chain pieces — manufacturing, logistics, payments, etc — that it can take to retailers or brands. So, in theory, anyone wanting to get into private labels or fashion selling could use Zilingo as an end-to-end solution to make and source their product.

Revenue grew by 4X over the past year, with b2b responsible for 75 percent of that total, Bose told TechCrunch. She declined to provide raw figures but did say net income is in “the hundreds of millions” of U.S dollar. The company — which has over 400 staff — isn’t profitable yet, but CEO Bose said the b2b segment gives it “a clear pathway” to break-even by helping offset expensive e-commerce battles.

Ankiti Bose and Dhruv Kapoor founded Zilingo in 2015.

The supply chain’s ‘outdated tech’

Moving into the supply chain after building distribution makes sense, but Zilingo has long had its eye on services.

That business-focused push started with a suite of basic products to help Zilingo sellers manage their e-commerce business. Those initially included inventory management and sales tracking, but they have since graduated to deeper services like financing, sourcing and procurement, and a ‘style hunter’ for identifying upcoming fashion trends. Zilingo also widened its target from the long tail of small vendors operating in Southeast Asia, to bigger merchants and brands and even to the fashion industry in Europe, North America and beyond that seeks access to Asia’s producers, who are estimated to account for $1.4 trillion of the $3 billion global fashion manufacturing market.

Zilingo’s goal today is to provide any seller with the features, insight and network that brands such as Zara have built for themselves through years of work.

In Southeast Asia, that means helping small merchants, SMEs and larger retailers to source items for sale online through the Zilingo store. But in Europe and the U.S, where it doesn’t operate an outlet, Zilingo goes straight to the sellers themselves. That could mean retailers seeking wholesale opportunities from Asia or online influencers, such as Instagram personalities, keen to use their presence for e-commerce. Beyond just picking out items to sell, Zilingo wants to help them build their own private labels using its supply chain network.

That rest of the world plan has been on the cards since last year when Zilingo closed a $54 million Series C, but now the next stage of the journey is deeper integration with factories.

“If you think about these factories that make the products, the process isn’t optimized over there,” Bose said in an interview. “The guy or girl running factory likely has no technology, they don’t even use Excel. So we’re going to small and medium factories, increasing capacity utilization, helping to manage payroll, getting loans and other fintech services.”

Kapoor, her co-founder, adds that the fashion supply chain is “is marred by outdated tech.”

“It’s imperative for us to build products that introduce machine learning and data science effectively to SMEs while also being easy to use, get adopted and scale quickly. We’re re-wiring the entire supply chain with that lens so that we can add most value,” he added in a statement.

Zilingo encourages retailers and brands to develop their own private labels by tapping into the supply chain network it has built

AWS for the fashion supply chain

Bose said Zilingo’s early efforts have boosted factory efficiency by some 60 percent and made it possible to develop links to retailers while also enabling factories to develop their own private label colletions, rather than simply churning out unbranded or non-descript products.

A large part of that work with factories is consultancy-based, and Zilingo has hired supply chain experts to help provide quality guidance and perspective alongside the software tools it offers, Bose said.

She compares it, in many ways, to how Amazon conceived AWS. After it built tech to fix its own problems internally, it commercialized the services for third parties. So Zilingo started out offering a consumer-facing e-commerce platform but it is making its sourcing networks open to anyone at a cost — almost like supply chain on an API.

That gives its business a two, if not three, sided focus which spans selling to consumers in Southeast Asia through Zilingo.com — which is present in Thailand, Singapore, Malaysia and Indonesia with the Philippines and Australia coming soon — reaching overseas retailers through Zilingo Asia Mall, and developing the b2b play.

In Southeast Asia, its home market, Zilingo doesn’t pressure its merchants to sell on its platform exclusively — “we don’t mind if they go to Instagram, Lazada, Tokopedia and Shopee,” Bose said — but in the U.S. it doesn’t have a go-to consumer outlet. It’s possible that might change with the company considering potential partnerships, although it seems unlikely it will launch its own consumer play.

Zilingo was once destined to compete with the big players like Lazada, which is owned by Alibaba, Shopee, which is operated by NYSE-listed Sea, and Tokopedia, the $7 billion company that’s part of SoftBank’s Vision Fund, but its supply chain focus has shifted its position to that of enabler.

That’s helped it avoid tricky times for specialist e-commerce services, which battle tough competition, pricing wars and challenging dynamics, and instead become one of Southeast Asia’s highest-capitalized startups. The company’s U.S. plan is ambitious, and it is taking longer than expected to get off the ground, but that makes it a startup that is worth keeping an eye on in 2019. It’s also an example that the startup journey is not defined since, in some cases, the biggest opportunities aren’t presented immediately.

News Source = techcrunch.com

It’s the golden age of traditional retail, not its end days

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A lot of people that will say that traditional retail is dying. They’ll point to the rising prominence of e-commerce, which accounts for under 10% of total retail in the U.S. and a whopping 15% or more of total retail in China, as diminishing opportunities for traditional retail. But the reality is that, thanks to technology, the future of traditional retail has never been brighter.

Today, brick-and-mortar retailers not only have unprecedented insight as to what is happening in their stores – from customer behavior, to traffic flow, and more, they also have an arsenal of new tools to keep raising the bar for the customer experience. This transformation can be looked at from three angles: Smart consumption, smart supply chain and smart logistics.

Smart consumption is blurring the boundaries of online and offline for retailers and customers alike. With AR/VR technology in offline stores, customers can walk into a store, and virtually ‘try on’ an article of clothing, for example, without ever visiting a fitting room. Similarly, while sitting at home, they can virtually place a treadmill in their living room to determine the best fit. IoT has even made it possible for customers to make purchases from the comfort of their cars. At every step of the way, the goal is to improve customer retention and loyalty.

Equally as important, smart supply chain is helping retailers improve operational efficiency by leaps and bounds. Whereas traditional retail requires a fair amount of guesswork — what will customers like, how many of each individual item will they want to buy, and over which time period — smart supply chain driven by AI and big data means that retailers have a much better sense of what customers actually want, and when they want it. With dynamic information about sales, pricing and inventory, brands can improve their time to market, inventory control and product design, and retailers can make smarter decisions about their offerings, making the most of confined physical retail spaces.

But if retailers can’t get products into customers’ hands quickly and cost effectively, then all of the efficiency of smart consumption and supply chain is of no use. It is imperative that behind all of the glitzy offline technology and supply chain algorithms, are extremely efficient logistics.

From smart warehousing, which ensures products get moved out and on their way to the customer as fast as possible, to autonomous delivery vehicles, which make urban delivery more efficient through being able to avoid traffic and follow scheduled routes, to drones, smart logistics work their magic behind the scenes to get products to customers’ doors.

Businesses that embrace innovative technology and invest in it wisely will have a better chance of being a step ahead of the competition and their likelihood of success will be magnified.

Technology is no longer just a support for retail. It is the essential tool for retailers to thrive in the market.

News Source = techcrunch.com

China’s Nreal raises $15M to shrink augmented headsets to size of sunglasses

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A former Magic Leap engineer believes the problem with most consumer-facing augmented headsets on the market is their bulky size.

“You wouldn’t want to wear them for more than one hour,” Xu Chi, founder and chief executive officer of Nreal told me as he put on a bright orange headgear that looked just like plastic Ray-Ban shades. Called Light and powered by Qualcomm’s Snapdragon processor, Nreal’s first-generation mixed reality glasses officially launched at Las Vegas’ tech trade show CES this week.

With a light-weight play, the two-year-old Chinese startup managed to bring in some big-name investors. Aside from debuting Light, Nreal also announced this week that it has raised $15 million in total funding to date. The proceeds include a Series A from Shunwei, the venture fund that Xiaomi founder set up, Baidu’s video streaming unit iQiyi, investment firm China Growth Capital, and others. According to Xu, R&D is his company’s biggest expense at this stage.

The financial injection bears strategic significance to Xiaomi and iQIYI. The former is best known for its budget smartphones but its bigger ambition lies in an Apple Home-like ecosystem that surely welcomes portable MR headsets. IQiyi, on the other hand, already has a channel dedicated to virtual reality, which is meant to immerse the end user in a completely digital environment. MR content may just be around the corner to provide an interactive experience of the real world.

Taking money from Shunwei rather than straight from Xiaomi is a thought-through choice. Xiaomi has backed hundreds of manufacturers to gain control over supply chains. Its portfolio companies, in turn, get access to Xiaomi’s retail channels, but they make comprises on various fronts such as product design and pricing.

Xu doesn’t want his freshly minted business to lose independence. “We don’t want to pick sides. We want to be able to work with Oppo and a whole lot of other brands. We want to be compatible with a wide range of devices — smartphones, laptops, PCs, and so on,” said the founder.

Founder and CEO Xu Chi holding Nreal Light’s glasses and chipset. Photo: Nreal

In early 2017, the Chinese entrepreneur started Nreal with his cofounder Xiao Bing, an optical engineer. The brand “Nreal” conveys the partners’ vision to bring users to spaces that fall between the real and unreal. Xu, who spent years working and studying in the US, decided to pursue his ideas back on his homeland for easier access to supply chains.

“We are combining our technological know-how from overseas with great resources in China’s manufacturing industry,” the founder said of his firm’s edge.

The 85-gram (about 3-ounce) Nreal Light isn’t as featherweight as regular glasses but it’s a significant improvement from the biggies it’s going after — Magic Leap One and Microsoft’s HoloLens. Nreal was able to shrink its gadget size because it uses a display solution that requires fewer cameras and sensors than its peers, Xu explained.

Furthermore, Nreal is fixated on the consumer market from the outset, unlike its bigger rivals which, in Xu’s words, are “building gadgets for the next five or even ten years.”

“They want to disrupt everything from cell phones, computers to televisions. They are not necessarily oriented towards consumers,” Xu added.

Nreal Lights

The smart glasses come in a variety of colors. Photo: Nreal

When it comes to performance, Light claims its display has a 52-degree field of view and a 1080p resolution, which my human eyes weren’t able to verify when I wore it to play an interactive shooting game. That said, I did experience minimum dizziness and latency on Light, as the company promised.

The only irritating part was I started to feel the weight of the specs on my nose bridge a few minutes into my session. Xu assured me that what I tried on was a prototype and that an assortment of nose pads and lenses for different facial features will be available. The glasses also come in a variety of flashy coral colors.

Nreal Light won’t be shipping until Q2 this year and mass production won’t arrive until Q3. Xu hasn’t priced his brainchild but said it will probably hover around $1,000. By comparison, HoloLens charges $3,000 and Magic Leap One costs $2,300.

Where does that price tag leave Nreal in terms of profitability? It’s a matter of what kind of consumer hardware Nreal wants to become. “Do we want to be Apple or Xiaomi?” The founder asked himself rhetorically. He’s sure of one thing: As the MR industry matures in China, production costs will also come down. The company is already mulling its own factory so as to beef up supply chains and reduce costs, according to Xu.

News Source = techcrunch.com

In 2018 the ticketing industry finally killed the ‘sold out’ show

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Among the many myths that were laid low in 2018, perhaps none was as welcome to throngs of live event fans as the fantasy of the sold-out show. Indeed, as the ticket market has moved to adopt new technology the new-found transparency has had one prime victim: The Sellout.

The highest-profile debunking of the sellout in sports for 2018 came from Washington, DC.

Originally reported by the Washington Post, the Washington Redskins officially ended their decade-long season-ticket waitlist this June. Once claimed to be 200,000 fans deep, the reality of Redskins demand hadn’t been as rosy since the glory days of Riggins and Theisman. In 2018, the Redskins have been selling single game tickets like never before — even using the secondary market as a favorable point of comparison.

Other high-profile examples of this shift include the Golden State Warriors, who, despite selling out 100% of their regular season games, had hundreds of tickets available on for Game 1 of the NBA finals in the minutes before tip-off.

If the Redskins and Warriors signaled a shift away from the sellout era in sports, Taylor Swift’s Reputation tour did the same for music. Having wrapped up earlier this month, Reputation finished as the highest grossing US Tour in history, despite a flurry of articles lambasting the artist for not selling out many shows.  Ironically, it turns out that the most important factor in her record-breaking success was exactly that: not selling out.

Rather than a lack of demand, these unsold tickets for high-profile events are the result of the latest trend in the ticketing industry — making sure you have tickets to sell when fans want to buy them. Anyone that has purchased tickets on the Internet knows that the most active buying window is in the days and hours leading up to an event.

Before the Internet, while this last-minute market existed, it was contained to street corners and run by local brokers. For most of the 20th century, managing this aftermarket was a job ticket owners were comfortable outsourcing. With it’s limitless reach and real-time distribution, however, Internet-based selling changed their comfort level dramatically, by removing the ticket owner from the supply chain and costing them billions in margin. It also created a product category that became one of the worst, if not the worst, on the Internet.

If not for the universal appeal of live events, ticketing as a product would have died with Pets.com .  Instead, teams, artists and promoters became the poster children for the Internet’s power to disrupt. The response from many ticket owners was to simply to hang up a ‘Sold Out’ sign at the box office in the weeks, days and hours before the game — one that is just now starting to be taken down.

Photo courtesy of Getty Images

To understand why that happened, it’s important to recognize that when the Internet took off, teams were principally in the season-ticket business, while artists and promoters were in the record-selling business.  Selling last-minute, ‘on-demand’ tickets simply wasn’t a focus. The Internet, however, turned that secondary market niche into a product category worth $10 to $15 billion at it’s peak — two to three times the size of the primary market it was based on.

In order to compete in this always-on marketplace, ticketing technology has received billions of dollars of investment in the last decade, with the goal of making it more compatible with the Web itself. In the last two years, Ticketmaster, Seatgeek and Eventbrite have all announced ‘open platform’ models that make it as easy to sell tickets in places like Facebook and Youtube as it does in Stubhub.

In January, Ticketmaster and the NFL announced a new platform deal that, for the first time ever, allows teams and leagues to define their own distribution ecosystem.  As one of the biggest destinations for ticket buying online, sites like Stubhub and my company, TicketIQ, have become direct-to-fan distribution channels in the new ticketing marketplace.

(AP Photo/Jeff Chiu)

Before we singlehandedly credit technology for killing the sell out, it’s worth asking whether the decline in sellouts is simply the result of exorbitant ticket prices and increased competition for consumer attention. While there’s no question that it’s become harder to get people off of their couches for average events, the robust growth of the experience economy suggests the opposite trend.

According to a December 2017 McKinsey report, millennials spend 60% more on live experiences than GenXers — all in search of not only genuine connection, but also fresh social-media content. For the Reputation tour specifically, last-minute tickets on the secondary market were actually 35% cheaper than 1989 tour, which made buying tickets day-of the event more affordable than ever.

As for the Redskins, while their 2018 season hasn’t turned out as they’d hoped, at the box office, they’ve set themselves up for success in the years to come.  When demand spikes, whether as the result of a new stadium or a championship run, they’ll benefit directly and handsomely. As a point of reference for what kind of profit they might expect, the Financial Times reported that Taylor Swift’s per-show gross for Reputation increased by $1.4 million, including two dates in July at Fedex Field, home of the Redskins.

In “Look what you Made Me Do” the sixth song on the Reputation album, Taylor Swift sings about past “games”, “a tilted stage” and “unfair disadvantage”, for which she now seeks retribution. As a statement about her artistic and commercial stature, it’s clear she no longer wants to play nice. In addition to a jab at her artistic nemesis, Kanye West, it also reads like a farewell to the ticket market of old that has frustrated consumers for almost two decades.

Despite claims that she sold out her fans to achieve Reputation’s record-breaking success, the numbers mean that it’s a model we’ll be seeing much more of in the years to come. Regardless of how you feel about her forcing fans to Buy, Like and Watch to get their place in line for tickets, the good news for the ticket market overall is that it was her decision to make.

News Source = techcrunch.com

LemonBox, which brings US vitamins to Chinese consumers, raises $2M

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LemonBox, a Chinese e-commerce startup that imports vitamins and health products from the US, has raised $2 million to develop its business.

The company graduated from Y Combinator’s most recent program in the U.S. and, fuelled by the demo day, it has pulled in the new capital from 10 investors which include Partech, Tekton Ventures, Cathexis Ventures, Scrum Ventures and 122 West Ventures.

LemonBox started when co-founder and CEO Derek Weng, a former employee at Walmart in the U.S, saw an opportunity to organize the common practice of bringing health products back in China. Any Mainland Chinese person who has lived or even just visited the U.S. will be familiar with such requests from family and friends, and LemonBox aims to make it possible for anyone in China to get U.S-quality products without relying on a mule.

The service is primarily a WeChat app — which taps into China’s ubiquitous messaging platform — and a website, although Weng told TechCrunch in an interview this week that the company is contemplating a standalone app of its own. The benefit of that, beyond a potentially more engaging customer experience, could be to broaden LemoonBox’s product selection and use data to offer a more customized selection of products. Related to that, LemonBox said it hopes to work with health and fitness-related services in the future to gather data, with permission, to help refine the personal approach.

LemonBox’s team has now grown to 20 people, with 12 full-time staff and 8 interns, and Weng said that the new funding will also go towards increased marketing, improvements to the WeChat app and upgrading the company’s supply chain. Business, he added, is growing at 35 percent per week as LemonBox has adopted a personal approach to its packaging, much like Amazon-owned PillPack.

“This is the first time people in China have ever seen this level of customization for their vitamins,” Weng told TechCrunch.

Members of the LemonBox team with Qi Lu, who heads up Y Combinator’s China business

Qi Lu, the former Microsoft and Baidu executive who leads YC’s new China unit, said he is “bullish” about the business.

“What LemonBox offers resonates with me and is serving a clear China market needs. Personally, I travel a lot between China and the U.S, and I often was asked by my relatives to help purchase and carry them similar products like vitamins,” he said in a prepared statement.

“More importantly, what LemonBox can do is to build an initial core user base and a growing brand. Over time, by serving their users well, it can reach and engage more users who want to better take care of their broader nutrition needs, use more data and take advantage of increasingly stronger AI technologies to customers and personalize, and become an essential service for more and more users and customers in China,” Lu added.

News Source = techcrunch.com

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