Gamification and social hooks have become cornerstones of every category of consumer apps these days, and Europe is announcing a seed round to give its growth a boost. A social shopping app that offers big discounts on goods based on how many people are coming together to buy them, and then presents users with a selection of games on top of that, is called Blidz.
European VC Peak and General Catalyst are co-leading the round.
If you're familiar with the world of social shopping and the description of Blidz sounds familiar to you, it's because it's a clone of Pinduoduo, the wildly successful gamified social shopping app in China.
He told me in an interview the other day that they saw the trend of Pinduoduo, learned how the model worked, and sent it out to the market a little over a year ago.
The Chinese platform currently has a market cap of nearly $60 billion and nearly 870 million active buyers. There is a lot of potential for Blidz, but also some of the same growth issues.
The startup is only a year old and the long-term challenges seem far off. Diercks told me he saw an opportunity to provide a different offering to the market beyond the domination not just of Amazon but the Amazon approach to e- commerce that was essentially being repeated by other marketplace platforms.
Diercks said that they want to liberate Western consumers.
He thinks that the offering is addressed in two different ways. It is about the front-end experience. Gamification and social hooks are used to engage users and get them to create their own network effect by recommending products to people.
The trick was pioneered by home shopping live TV shows where people phoned in to buy goods.
The choice that Blidz has is to accept a lower margin on sales in exchange for selling more goods.
The internet landscape in Europe and the U.S. is very similar to that in the US at the moment.
Sixty percent of e- commerce in Europe is dominated by Amazon. He said that the company wanted to offer Western consumers a better and less expensive shopping experience.
He believes that the solution is to accept a much smaller margin on goods sold and then sell more of them to make up the difference. He said that China's Pinduo makes as little as 0.5% off a sale.
China is a key country in the supply chain for goods that are sold on the platform. China remains a critical supplier for the wider consumer market and will be for a long time, despite the fact that there are definitely signs of some startups building business models that nurture more manufacturing and goods production closer to those who are making purchases.
We are building a supply chain in China with ex-Wish guys. Diercks said that they are building this for them. This is not about buying cheap goods, but using newer generation of products that are just as good and sometimes better than the average offerings. He described the concept as "quality-to-price."
We don't want to work with every supplier. He said they want to work with a number. The end vision is to be the Shein of this space, he said.
The social shopping space has a lot of businesses that look like they are rocket ships, but they don't last long. Diercks doesn't believe that Pinduo and now Blidz are the same. They are more focused on experiences than products, even if the goods business has shifted a bit.
The idea of building out that model to more markets and possibly picking up more local variations along the way has been enough to convince top investors to take a chance on it.
Adam Valkin, MD of General Catalyst stated that the Blidz founding team has a number of unique insights relating to the evolution of online commerce. They are creating a new customer experience in the West by combining social media, gaming and shopping into a data-driven entertaining and easy-to-use platform. We are excited to see what emerges from this team.
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