What China’s ecommerce growth means for startups like Bindo.
Superlatives abound for China’s business-to-consumer (B2C) ecommerce market: it is the second largest in the world next only to the US, the fastest growing, and has the most potential for growth.
According to German research firm yStats, B2C ecommerce sales in China grew over 60 percent year on year in 2013, representing online activity by over 300 million consumers. By 2017, online shoppers are expected to grow to over 500 million.
The customer-to-customer (C2C) segment, on open marketplace sites like Alibaba’s Taobao, is still larger than the B2C, although this is changing. The top B2C estores in China are Alibaba’s Tmall and arch rival JD.
UBS says China’s B2C ecommerce will outgrow C2C in one or two years. Two reasons: first is growing concerns about the sale of counterfeit goods sold on C2C platforms, second is the expansion of retail brands into online. “The opportunity of B2C is that many offline brands or retailers in China do not have an online strategy. B2C platforms strive to help these companies open online shops,” said Erica Poon Werkun, head of Asian Consumer and Internet Research at UBS in a report.
A new chance for startups
Well aware of these numbers and forecasts, a startup called Bindo, which developed an iPad point-of-sale (POS) system, is ready to ride on China’s growth.
“China is now the number one digital retail market in value and penetration and compared to their US counterparts, Chinese consumers are much more willing to use smartphones to make direct purchases. China’s digital retail market is beginning to shift back from C2C (Taobao) to B2C (Tmall) as consumers are having a fundamental paradigm shift to only trusting purchases made from official retailers and brands,” explains Nikki Chan, director of PR and brand marketing at Bindo.
“With this shift of the on-demand economy back to B2C, there is a huge opportunity for growth of Bindo,” Chan adds.
Closing the offline and online loop
Bindo was founded by Jason Ngan, an engineer by training who later fell into finance and hedge funds. Seeking a change of pace, Ngan teamed up with Brad Lauster, a UI/UX designer who held stints at LinkedIn and Intel, to found Bindo in early 2011.
Bindo began as a marketplace idea, but Ngan and Lauster realized early on that indexing the inventory of multiple stores all with different inventory management systems was a huge and almost impossible task. So they decided to start from scratch and create the Bindo POS system, which helps retail merchants easily add and manage inventory in the cloud.
As UBS said, in China, brick-and-mortar stores are starting web-based operations, but this often necessitates separate systems for almost every aspect of the business.
Chan says Bindo’s iPad POS system centralizes inventory management for merchants that engage in omni-channel commerce, increasing operational efficiency and reducing inventory wastage. “Our integrated CRM and Bindo payment gateway also recognizes customers by their credit card numbers, allowing merchants to tie consumer purchases across in-store and online channels,” she notes.
Coming soon is “Bindo Market,” a mobile app which will allow consumers to make purchases from any merchant using Bindo POS. Delivery will be same-day.
“The aim of Bindo Market is two-fold; to allow customers to be able to purchase locally and more conveniently, saving time and money on shipping costs that would otherwise be imposed on bigger retail giants like Amazon and also to allow merchants to be discovered by shoppers around them,” Chan says.
The whole Bindo retail solution therefore closes the online and offline loop.
The startup operates in Hong Kong and New York City, both strategic locations to capture the China and US markets. But because some brands have a global presence, there are retailers using Bindo’s POS system in 30 other countries, including Australia, Dubai, Taiwan, the UK, and Korea.
There are 3,000 retail merchants using Bindo at the moment. The company has also processed US$1 billion sales in the last six months, and checked out more than 500,000 unique customers in Manhattan stores alone. It aims to reach 6,000 stores by year-end.
Depending on each business’ needs, Bindo charges a subscription fee for its POS system, plus a charge for every additional register. It also earns through credit card processing fees and soon it’ll also nab commission from Bindo Market sales and big data opportunities with brands.
Bindo is up against other platforms like Shopify, Vend, Lightspeed, Shopkeep, Revel, and Square.
Find out more: https://www.techinasia.com/bindo-china-ecommerce-growth/