U.S. e-commerce adopts a social network strategy from China
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Verishop, the luxury e-commerce site created by former Snapchat Chief Business Officer Imran Khan, expects to sell $50 million of gross merchandise volume in 2020, sources tell Axios. It's also launching a social-shopping experience that will include influencers and a personalized feed of content.
Why it matters: Social media apps like Instagram, Facebook and Snapchat have made efforts over the past few years to offer users a better shopping experience. Verishop is doing the opposite by launching a trusted marketplace first and a social media experience around it second.
Be smart: This strategy has been used by Chinese tech giants for years, and is now starting to make its way to the U.S.
- Chinese e-commerce giant Alibaba has long included social experiences like live video chat in its Taobao marketplace to build trust between shoppers, merchants and the platform.
What we're hearing: According to a source familiar with the expansion, the goal is to have influencers — both brands and individuals — be able to create posts through a self-service platform that that are distributed on a customized feed.
- The feed will launch in the next six months. Over time, influencers and brands will be able to monetize their posts, based on the goods purchased from their content, according to a source familiar with the plans.
- The company will use artificial intelligence to recommend the products from the social posts to users if those products are available on Verishop, or it will recommend products similar to the ones featured in the post if they aren't.
By the numbers: When Verishop launched a year ago, it had over 180 brands signed on to the platform. Today it has over 600 brands and 12,000 different product choices. By the end of the year, it is expected to have sold $50 million worth of goods.
The big picture: Verishop's aim is to create an online experience akin to a digital shopping mall.
- While other big retailers like eBay and Amazon dominate the e-commerce experience for inexpensive or used goods, Verishop is aiming to create a single marketplace for luxury goods only.
- That one-stop shop mentality means that consumers can buy, return and customize their shopping experience across dozens of brands on all one website, similar to the way they would shop at a mall in real life: all of the stores in one building.
The bottom line: It's easier said than done. Amazon tried to launch a social media shopping discovery feature called "Spark" in 2017, but shut it down in 2019 in favor of a less formal feature called #FoundItOnAmazon.
- It also faces some competition from other e-commerce upstarts like "The Yes," which are trying to redefine the dying department store business online.
