Pinkoi, A Marketplace For Independent Designers In Asia, Raises $9M And Launches English Site
When I moved to Taiwan in 2007, I was struck by the large number of independent designers in the city—and how hard it was to find them. Most only sold at weekend craft markets and their online presences were scattered across different blogging platforms and social media sites. In just four years, however, Pinkoi has dramatically changed that, serving not only as an e-commerce platform for small studios, but also as a community hub.
The site now has 25,000 sellers throughout Asia and two million monthly users and plans to ramp up its expansion plans with $9 million in new funding from Sequoia India and GMO Ventures. The Taipei-based startup, which launched an English-language site today, will also use the capital to improve product search and discovery.
Pinkoi was started in 2011 by chief executive officer Peter Yen, chief product officer Maibelle Lin, and chief technology officer Mike Lee. Before founding Pinkoi, Yen and Lin worked in Silicon Valley (Yen was previously a senior engineer lead at Yahoo, where he helped spearhead the launch of Yahoo Answers). They spent a lot of time browsing estate sales, vintage markets, and craft fairs in San Francisco, and wanted to increase the profile of independent designers in Asia.
“There are a lot of really great designers and we believed that they deserved a great platform and marketplace to promote their own brands,” says Yen. “We wanted to bring the community together, because Etsy has the U.S. community, but no one had really bridged Asian design communities in the same way.”
Pinkoi now has 50 employees and offices in Tokyo, Hong Kong, Bangkok, and San Francisco, with plans to open one in Shanghai soon. While its profile is rising in Asia, most TechCrunch readers are probably unfamiliar with Pinkoi and curious about how it compares to Etsy, which went public in April, ten years after it was founded in Brooklyn. The most obvious difference is geographical—Etsy’s focus is on North America and Europe (the site has offices in seven countries, but none are in Asia).
The two companies also launched with different business models. Etsy is an open marketplace, where almost anyone can have a store. Pinkoi, on the other hand, has a selection process (Yen says the site currently approves less than 10 percent of designers who apply in Taiwan, its main market). There are several reasons for this approach. The main one is that Pinkoi wanted to avoid the problems that plague open marketplaces like Etsy and Alibaba’s Taobao, including counterfeits and poor quality products, which makes new designers less enthusiastic about joining the platform (Pinkoi allows factory-produced items, as long as they are made in small batches and the manufacturing process is closely monitored by designers).
Curation also lets Pinkoi offer a wider variety of products to attract different demographics (for example, it is now seeking more designers of men’s accessories). Yen notes that in several of Pinkoi’s main markets, including Taiwan and Japan, working hours are long and people have limited time to browse online (Yen says that shoppers sometimes spend just 30 seconds browsing before placing an order), which means the site has to deliver desirable items with each search if it wants to keep shoppers interested.
Bringing Asian Design To The World
Items from handmade and small designers are gradually becoming more popular in Asia and Yen believes that the market will catch up to North America’s within three to five years. Factors that may help drive its growth include increasingly mature luxury markets in China, Hong Kong, and Japan, which means that more consumers are turning away from branded goods and looking for one-of-a-kind items that aren’t as conspicuous.
While the majority of Pinkoi’s shoppers are in Asia, the startup is using several tactics to attract consumers in the U.S., Canada, Europe, Australia, and New Zealand. Along with its English site, it also has an international transfer service that forwards orders from multiple vendors to shoppers. Pinkoi has developed its own software so the shipping program can scale up, Yen says its main focus is making English-speaking shoppers more comfortable with ordering from Asia (he adds that most people chose direct shipments for their next orders).
Pinkoi hopes to get more international buyers, but its design focus is still Asia, with an emphasis on China, Hong Kong, Macau, Japan, and Thailand. Recruiting sellers in each place comes with its own challenges.
For example, even though Japanese design is highly regarded throughout the world, many designers have not started selling internationally, particularly if they are located outside of major cities like Tokyo. In China, on the other hand, independent designers often have trouble competing with luxury brands, so they have to cultivate consumers in other countries in order to survive.
In order to overcome cultural differences, Pinkoi’s employees spend a lot of time going to design shows and events to meet people. The company also invites designers to workshops and weekend markets in Taipei.
“If you just email or call designers, they will think ‘who is this person?’ We do a lot of video conferencing with designers so they can see a face. We spend a lot of time talking to them, finding them at different expos, and exchanging name cards,” says Yen. “In China, a lot of designers know about Pinkoi and are willing to list on us, but they want to know how they get paid and what the rules for joining Pinkoi are, so they email us and we will do a video conference, too.”
Yen says the amount of legwork Pinkoi puts into meeting with designers is a competitive advantage for the brand, because it increases loyalty among both vendors and shoppers. In addition to other handmade marketplaces in Asia, like Mumbai-based Craftsvilla in India (another Sequoia investment), iichi in Japan, and Thailand’s Blisby, Pinkoi also competes with mainstream e-commerce platforms like Taiwan’s Books.com.tw, which sells items from independent brands. Yen is not worried about Alibaba launching a similar site, however, because the Chinese e-commerce giant is concentrating on initiatives like its online payments and cloud computing businesses and handmade goods are considered a niche market.
“Our core value is community,” he says. “We are not only a marketplace, but also great people connected to each other in different countries.”
Article source: TechCrunch.com