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At the beginning of 2022, Jolly Chic, a cross-border e-commerce platform that has won financing from a number of well-known institutions, once again reported bankruptcy. In just a few years since entering the Middle East in 2015, JollyChic and the company behind it have repeatedly reported similar news.
However, this time, along with the website, App, Seller Center landing page can not be opened, cross-border e-commerce industry has speculated, once the Middle East market e-commerce dark horse JollyChic may no longer be able to sustain.
However, the outside world may not have noticed that in the App Store and Google Play, an e-commerce application, ChicPoint, has quietly launched. Judging from the information obtained by Zhixiang Network, ChicPoint does carry the shadow of Jolly Chic, and there are similarities with the fast fashion giant Shein that swept through the Middle East.
In fact, this application has a lot to do with the administration, and the CEO is Xing Liming, a cross-border e-commerce "veteran" who once worked for the emperor.
This time, Xing Liming, who has a wealth of experience, also chose to bet on the Middle East. Fortunately, he is catching up with a new round of dividends in the Middle East market, but many top e-commerce players are also accelerating their progress towards the Middle East. In the future, will this veteran of the Middle East e-commerce have a chance?
Former executives return to the Middle East
In August 2020, a shopping app called ChicPoint quietly launched in the Middle East.
Users familiar with the Middle East e-commerce market may associate ChicPoint's name with another e-commerce app on the market - JollyChic. In fact, the two apps are really related.
ChicPoint CEO Xing Liming has 15 years of experience in the e-commerce industry, and before starting his business, he worked in Jolly Chic, known as the "Middle East Taobao", serving as vice president, CFO and other positions.
Judging from the information obtained by Zhixiang Network, in terms of business direction, ChicPoint also has many similarities with the former JollyChic. ChicPoint also chose to take the lead in cutting into the Middle East e-commerce market from female users. ChicPoint plans to start from Muslim clothing products and expand categories around female user purchase scenarios. ChicPoint said that relying on China's high-quality apparel supply chain, it currently covers more than 1,000 cooperative factories, focusing on products and high cost performance. Using data-driven product selection testing, for women aged 25-45, starting from the clothing category, with an average of 7500+ products online every month.
Insiders said ChicPoint's self-labeling is to become the first e-commerce platform for Muslims, in three stages. The first stage mainly promotes Muslim traditional women's clothing, starting from strong cultural attributes and regional differentiation categories, obtaining seed users and building user trust. The second phase mainly promotes daily women's clothing and maternal and infant clothing, while meeting the needs of modern fashion (moderate fashion), expanding women's clothing, maternal and infant categories. The third stage is to develop all categories of products and continuously enrich the product matrix.
Judging from the account operated by ChicPoint on Instagram, as of now, the company's selection is mainly based on women's and children's clothing. ChicPoint said that there is a set of intelligent selection system, which greatly improves the efficiency of the new. In the second half of 2021, the average number of new models per month exceeded 13,000, and the online cycle of new categories was 7 days. At the same time, based on the refined popular elements, matching high-quality supply chain resources, the sales rate of new products in 30 days in the second half of the year reached 40%.
Once JollyChic is also from the creation of the Middle Eastern people's online wardrobe, in the selection of big data technology with the help of big data platform, the company every day to capture the world's fashion trends for analysis, and then share the data to the cooperative manufacturers, the factory only needs to produce a small number of samples, to ensure the first time to customers to see the goods. Subsequently, the executive will place an order according to the number of clicks of the customer, and judge the customer's needs according to this and convey it to the manufacturer.
At the same time, on the operation side, based on big data, the company's background will mark customers as 10,000 different labels, including customers' natural attributes, social attributes, behavioral attributes and consumption attributes, etc., and the labels are combined with each other to subdivide the group to the extreme, and marketing based on big data.
For now, ChicPoint said, Saudi Arabia and Morocco are its main markets. Launched in Morocco less than half a year, the monthly GMV exceeded one million US dollars, and the app Android download volume was close to 1 million, ranking first in the shopping list. Next, ChicPoint plans to expand into the Nigerian market, with a total population of 200 million and Muslims accounting for 50%. From the Middle East to North Africa, ChicPoint expects a GMV of $60 million in 2022.
Hot Middle East
However, judging from the choices of female users, ChicPoint may not completely copy JollyChic, but hope to imitate Shein's successful path. However, unlike in the past, the reintroduced ChicPoint may be underestimating the Middle East market.
In the Middle East, the rulers are the first to take their place in the market as early as 2015. At that time, the level of competition in the Middle East market was not fierce. In the following years, e-commerce platforms with a keen sense of business have also discovered the potential of this market and have successively moved to the Middle East.
Shein entered the Middle East in 2016 and sold 200 million yuan in the Middle East that year. In 2017, Amazon increased its investment in the Middle East market by acquiring Souq.com, the region's largest online retailer, for $650 million. That year, Mohamed Alabbar, president of Dubai real estate giant Emaar Properties, raised $1 billion from backers, including Saudi Arabia's sovereign wealth fund PIF, to launch a local e-commerce platform Noon.com. In the same year, Fordeal, a cross-border e-commerce platform from Guangzhou, also joined the melee of e-commerce competition in the Middle East, and Alibaba's AliExpress also looked at the Middle East market.
According to the late Late Post report, it was Shein and Fordeal, a cross-border e-commerce company also from China, who "ate" the growth that should have belonged to JollyChic. Although JollyChic's Taobao model grew rapidly in the early days, by 2018, Shein's brand and reputation, which had been deeply involved in the Middle Eastern market for three years, gradually took shape and entered a real explosive period. Picodi's report notes that Middle Eastern consumers have a brand factor of 67% when making a purchase decision, outpacing other factors. Another rival is Fordeal, an e-commerce platform founded in 2017 that almost completely replicates JollyChic's development path, but with a more ferocious style of play.
In cross-border e-commerce, if it is about big data selection, operation, and the pursuit of the ultimate supply chain, Shein is one of the leaders, and the Middle East is one of Shein's most important markets. In order to be close to the love and culture of female users in the Middle East market, Shein has also set up a Middle East design group to design and manufacture clothing exclusive to Middle Eastern women according to the current fashion trend and the overall style tone of the Middle East women's clothing market.
Shein's tailor-made clothing for Women in the Middle East
Under the attack of many competitors, the executive failed to take advantage of the advantage of entering the Middle East first, but under the fierce market competition, it took the lead in showing fatigue, and many times there was news of arrears of supplier payments, tight cash flow, and the company facing bankruptcy.
Nowadays, another round of dividends in the Middle East e-commerce market is coming, and the arrival of the epidemic has brought about the rapid growth of the e-commerce market.
According to RedSeer, e-commerce in the MENA region grew by 52% in just one year after the COVID-19 outbreak, reaching $22 billion in GMV by 2020 and another 35% by 2021 to reach $30 billion a year in GMV. On the other hand, users in the Middle East have always been known for their bold shots. Data from fast fashion e-commerce shein reveals that Middle Eastern users often place one-time orders of more than $200 on Shein's platform, with an average unit price much higher than $150 in the United States.
Therefore, ChicPoint from the royal team has caught up with the "good time" and can take advantage of the situation to take advantage of the race. However, instead of the past, the Middle East market is gathering a number of top players, and according to Bloomberg, Noon plans to raise up to another $2 billion from Saudi sovereign fund PIF and other investors in the next three to four years, mainly to upgrade infrastructure and speed up delivery to capture a larger share of the Gulf e-commerce market.
JD.com also finally entered the Middle East market after waiting and watching for a long time. In July 2021, JD.com officially signed a partnership agreement with Emaar Malls in Dubai and fashion e-commerce company Namshi to enter the Middle East market. It is reported that the Dubai-based website will provide JD.com with local logistics, warehousing, marketing and content creation support in the Middle East.
In the Middle East, where many top players are around, the future e-commerce market will surely usher in a period of acceleration, whether ChicPoint will rely on many years of rich experience to gain a foothold, or will repeat the fate of the emperor, everything is still unknown.