Zilingo: Bringing Bangkok’s Chatuchak Market to the World
Interview with Ankiti Bose, CEO of Zilingo
Street fashion is a business opportunity that’s worth more than 300 Billion USD. Realizing the gaps that existed in the market was a start-up called Zilingo which brings merchants across South East Asia together, online. And they’re also helping these merchants reach a global audience. Seeing phenomenal growth in a little less than 2 years, Zilingo has been in the news recently for closing a $17 Million Series B funding round. We talk to Ankiti Bose to learn more about how serendipity led her to build an e-commerce force to be reckoned with in South East Asia (from an apartment in Bangalore, no less), how their technology has evolved, and how they’re changing the face of B2B fashion retail with the launch of the Zilingo Asia Mall.
You’ve just raised $17 Mn in funding for your Series B within 2 years of establishing your business, which is huge. Did you foresee the kind of traction Zilingo has achieved?
When we started, we knew we were sitting on a $300 Bn market – of products that are manufactured and shipped out of ASEAN and Asia. We knew there weren’t any players here, which we realized was definitely an advantage. We intend for it to be huge because we really believe that a multi-billion-dollar company can be built in the space and region.
Can you tell us a little bit about the history of Zilingo? How did it all start, and how did you get here? Was there an “aha” moment?
We have a serendipitous story – In 2014, when I was still working and I was in Bangkok with a few friends. And I happened to see the Chatuchak market, and at that time I was already keen on doing something on my own. After going to the market I saw that people from not just Asia, but from all these different parts of the world were traveling to Bangkok to buy apparel and accessories. And this sort of made me think of how people from the region, or coming to this region, shop for fashion.
It’s almost a toothbrush use case here. A lot of this crowd is coming for the small time stores or designers – it’s not like they’re going to Zara every day.
So the question I asked myself was “If there is so much fashion and I loved it as a shopper myself, then wouldn’t there be a wider market for this online?”
I was working in Bangalore at the time, and Dhruv, my co-founder, and CTO used to be my neighbor. Given my knowledge of the market and his expertise in building a scalable backend – it all just seemed to make sense. That’s when we took the plunge because we knew that broadly something could be built there. When I look back, it was a very scary decision!
And then there’s the story of a friend’s friend who quit her job, moved to Bangalore and was looking for a place to crash. All I knew was that she was into analytics and wanted to start something of her own. And somehow, she ended up living with me. And then she joined us and all this in between two apartments in Bangalore – building a company for Southeast Asia after having visited only a few times! She now happens to be the CMO of the company. So, it’s super serendipitous! How things came together and think it all began in Chatuchak market. it certainly did. and rest of the things just came together in the next 1-2 months. We had quit our jobs and moved to Bangkok to build Zilingo.
A lot has been written about how Zilingo stays ahead of the curve in terms of adopting technology like AI. How’s that evolution been?
Before we actually get into AI, it’s important to talk about how our technology evolved.
In our region, importantly SE Asia, the important thing to note is that it is super fragmented and India has one currency, with English as its business language; China has Mandarin, Cantonese with one unit of currency with logistics and infrastructure set up in place.
But everywhere else, it is super disintegrated – Thailand is very different from Singapore, and Singapore from Malaysia, which is very different from Indonesia, and so on. What we realized was that there was a huge gap in the market – The biggest challenge for these small sellers was that there is no Shopify for them. So there is no product that they can use, or a suite of products or tools that they can use to digitize their business or manage it – things that come along while going digital. These sellers don’t speak English and don’t use USD – and there was no other localized platform available that managed multiple currencies, languages, sizes which was completely localized to Asia. That’s when we realized was that there was definitely a gap between what they were trying to deliver and was really needed in the market. This was a technology + business problem we were trying to solve. We realized we, as a team had an edge – we all had prior experience working in markets where internet is far more developed and we have access to talents that have been with companies such as Amazon, PayPal etc.
Having said that, we spend a lot of time talking to sellers and trying to understand how they sell on Facebook, or Line Messenger, or other similar tools – helping them solve their pain points.
More than 50 % of our engineering efforts today are spent on maintaining the seller side and making sure there is enough innovation there. Thus, making the lives of these sellers easier. And that what keeps us ahead of the curve in our region because there is no other player doing this. There might be individual use cases but they don’t do other currencies and simply lack the features we provide.
It started with us trying to build an amazing product which helped on the supply side. And once we had that locked in – we started implementing other technologies such as image search and visually similar recommendations with vue.ai, and now video which we’re working on with vue.ai as well as in-house.
What we realized is that at the core of it all is how you make the product just a lot more usable and likable for the cohort that actually likes it a lot. I’ve always been a very strength focused person- so if there’s something good about you or your company, focus on that and make yourselves the best in it rather than focus on the weaknesses. We realized we were popular with our millennial users – and that took us to video, image and shoppable videos. That was the crux of it all – let’s focus on the buyers and sellers who use and love Zilingo and in the region and that’s how we are staying ahead of the curve!
What we realized is that at the core of it all is how you make the product just a lot more usable and likable for the cohort that actually likes it a lot.
Something that is important to note is that none of this is being done by our competitors – you might see this in India and China now, but SE Asia now has a billion people and a much higher per capita income than India. Yet, most of the other technologies available in these countries are lagging behind, which really puts us above our local, regional competitors
I must state, however, that our benchmark is not SE Asia, in terms of product excellence or anything so we are uniquely positioned like that.
You mentioned working with Vue.ai for video and image search. And you’ve also been using AI for auto-tagging and catalog management. What kind of value do you see from these, and some of the other initiatives that Zilingo and Vue.ai have been working on together?
For me, AI has some sexy use cases, and then there are some functional use cases. So, to me image search – it’s a great value add, looks good and creates a lot of buzz. But, for us as a partner of Vue.ai, one of the most useful AI use cases is auto-tagging. Simply because we have thousands of sellers each putting up 5000-10,000 products per month. And that is a ridiculously high number of SKUs.
AI can make the process simple for a seller where they won’t need a human army to type all of these product details manually. This makes this not only faster but also more accurate with lesser errors. When we were testing out AI for tagging, it was more fail-safe when compared to the merchandising or catalog management teams doing the tagging manually.
For us as a partner of Vue.ai, one of the most useful AI use cases is auto-tagging. Simply because we have thousands of sellers each putting up 5000-10,000 products per month. And that is a ridiculously high number of SKUs.
We haven’t gone live with vue.ai’s shoppable videos on our sites yet but we have done our versions of shoppable videos. Content is constantly evolving. It used to be a lot of text earlier, which evolved into photo sharing. Then we saw an increasing number of people sharing Snapchat videos, and Instagram videos. So if this (video) is how people want to consume content then that is how e-commerce needs to evolve, and how we need to start selling. And just to drive home that point – on Zilingo, we’ve seen a 400% higher click-through rate on video than any non-video shoppable content. That’s a 4x jump!
When we were testing out AI for tagging, it was more fail-safe when compared to the merchandising or catalog management teams doing the tagging manually.
For any marketer, the ROI is amazingly high so I think we have benefitted a lot from both the sexy and functional use cases of AI. Shoppable videos and auto-tagging have made our lives significantly better.
We’ve seen a 400% higher click-through rate on video than any non-video shoppable content. That’s a 4x jump!
I love how video is developing for us. We are doing a bunch of vue.ai’s shoppable videos. I don’t think we are close to tapping the potential of visual content just yet, but making videos and stories shoppable is going to go a long way. And I think what we are trying out now is using influencers and celebrities to create collections using videos. And with so much evolution happening – once AR or VR become popular, visual content may not even be what we use today. But I do believe that video is going to grow phenomenally, and there’s a lot more that we can expect.
I love how video is developing for us. We are doing a bunch of vue.ai’s shoppable videos. I don’t think we are close to tapping the potential of visual content just yet, but making videos and stories shoppable is going to go a long way.
I won’t be surprised if Amazon starts using their X-ray technology in Prime Video to start selling products. So we shouldn’t just be looking at video ads, but finding newer ways to monetize video content.
There’s a lot of buzz surrounding Zilingo Asia Mall, your B2B business, and it seems to be solving some very unique challenges. Can you tell us about the progression towards a B2B model?
One of the first things we noticed when we started Zilingo was that we would get 50 to 100 inbound requests a day from buyers across the world asking for products from Thailand and Korea, and how they wanted them.
We were already doing cross-border selling for B2C end users by then. But one of the things we realized was that the 300B$ that I had mentioned earlier was contributed by businesses that procure from Asia.
If businesses across the world are procuring from Asia, such as buyers in the US and Europe – it could be due to the value for money that this market offers, or the styles that arrive earlier than some of the other markets – for example, you see something on the ramp in Milan and in the same week it’s already on the streets of Thailand. Usually, fashion from the ramp takes a few months to reach the stores. But if someone has seen it in Thailand, chances are that it’s already on the streets.
We realized that we have a unique supply at our disposal that has an incredible demand from a lot of these small businesses that buy 500 or 1000 items at a time. Which is when we thought, that instead of making them shop from Zilingo, we provide them a different platform – because their needs are different. These buyers are looking at differentiated pricing – either volume discounts, or other costs such as duty. That’s when we started to build a separate platform for them where we can also optimize our costs, our pricing and our margins accordingly. We took the entire user and seller base that would only cater to larger transactions, which led to the creation of Asia Mall which is a very profitable business for us.
Every month, we see 500-600 transactions on Asia mall; which is a small number compared to our B2C business, but order values are significantly larger.
We’ve been able to crack the supply chain problem for a lot of these buyers, something that they see a lot of value in. Because typically if they order from China, Korea, Thailand, or any other South East Asian country – they have middlemen involved. This includes your importers, exporters and in some cases the country’s customs agents which just adds to the overheads. So by the time the order reaches the buyer, it’s not as competitively priced as it is when it’s with us. Especially since we take care of the entire supply chain, where have partners integrated for each of the activities – from freight, to duty, Quality Control, and more. So in effect, the customer needs to deal with only one middleman instead of six between them and the manufacturer.
We’ve seen a great response so far, and over 80% of the customers who have done any B2B transactions with us return for more transactions.
More importantly, they are returning consistently. While the initial transactions are smaller in size, they are getting larger in size as we continue to build trust.
While a lot of the features on the site are similar to our B2B sites, we’ll be adding a lot of new features which are very B2B focused, and take the requirements of repeat buyers into consideration. So you’ll have features like a dynamic calculator that considers the MOQ (Minimum Order Quantity), shipping conditions such as FOB, customs, duties, and more. This dynamic calculator will tell the customer the different parameters that will impact the cost – for example, how the pricing changes when you change the location or the order quantity. We’re hoping that it will make the conversion process easier, requiring lesser conversations between us and the customer.
As I mentioned earlier, building trust is extremely important. To that end, we’re working towards associating with the right trade organizations and have trust seals. There is a lot going on with the B2B business, and are super excited about all the things that will come with it.