Social shopping as it exists in China — gamified shopping online in groups and with friends — has never really taken off in the West. But one Finnish startup is now trying to bring the model to Europe.
Social shopping app Blidz has today announced its €6m seed round for a shopping app very similar to China’s largest social shopping app, Pinduoduo. The round was led by global VC General Catalyst and European VC Peak.
Blidz users can access heavily discounted products on the app and drive the prices down further by sharing the items they want to buy on social media.
So-called group shopping — platforms that group individuals so they can buy products and services at a discount — is not a new thing in Europe or the US, with the likes of Groupon having been around for years. And at the intersection of social and shopping, Facebook, Instagram and Snapchat all have ecommerce elements.
But no one has quite recreated the Chinese social shopping experience which lets friends shop with other friends, spurred on by addictive gamified features.
How does social shopping work?
There are a lot of items to choose from on the Blidz website — around 2m, according to CEO Lasse Diercks. That includes everything from electronics to makeup and kitchenware to toys. “We also have a couple of groceries set up — this is a space we are moving into,” says Diercks.
Unlike Groupon, you don’t just buy the items you want together with strangers on the website. At Blidz, you have to get your own network involved.
With discounts of up to 95% off the original price, the idea is that you buy the item of your choice and then share it on social media to get your acquaintances to buy the exact same thing. If one of them does, you get the item for the discounted amount. If no one joins you, you will be credited with Blidz's own cash, to be used for other purchases.
And if you don’t want to share that you're buying a wig or some nipple chafing cream on social media, you can still buy it — you just won't get the discounts.
Who would want to share any purchases on social media?
According to Indra Sharma, partner at Peak, sharing your purchases on social media is particularly a thing for Gen Z shoppers.
“They want to buy on recommendations from people they know, whether it is food, clothing or other things. You trust your community — that's a big change in ecommerce that's happening right now,” she says.
Europe has only a few startups that are treading in the same waters as Blidz. There is Turkish startup Groupanya, focused on deals, UK-based Cherryz, an online marketplace for finding low-priced products, and French startup Minimall, which attended YC in 2020 and enables group buying directly from factories.
So why would Blidz succeed where others have failed?
Similar to Pinduoduo founder Colin Huang, both Diercks and his cofounder Markus Haverinen have extensive knowledge of ecommerce and games, the latter being the reason Diercks moved to Helsinki in the first place (Finland is very hot when it comes to games).
They launched Blidz’s shopping site in 2018 and played around with gamification, which included in-app games.
One issue was how they would handle the cash returns to customers that didn’t manage to get anyone else to join in on their deal. With credit card payments, it would be a charge to pay it back. An in-house points system was the answer.
“What if we can use our experience from gaming and shopping and combine the two worlds? What if the Blidz cash also could give the user a direct benefit? And that's when the whole thing really came together,” Diercks says.
Blidz launched its latest social model in early 2021 and has seen its user base grow by 1500% in a year.
In addition to Catalyst and Peak, Turkish D4 Ventures, existing investor IPR VC and a range of angel investors former Amazon UK CEO Christopher North invested in the seed round.
According to Diercks, it costs Blidz on average $4 to acquire a new customer. In comparison, the average cost for traditional ecommerce is somewhere around $20-$50, and in some cases much more.
“Due to our social features, and due to the stickiness of our app, we are not in the same pressured position to earn that money back immediately,” Diercks says.
Because of the small price paid for new customers, the prices paid for goods can come down.
Does that really add up to 75% discounted goods?
With discounts ranging from 75–95%, how can the company ever make any money? According to Diercks, it’s possible by cutting out the middleman and shipping all the goods straight from factories.
This is not something that Blidz has set up yet, but the startup is working on the marketplace technology and the factory integration is planned for next year.
So far, the company has launched in the US, Canada and Australia. And being a Finnish company, one would think that there would be a European version of the website, or at least a Finnish one. But no.
“We're planning to launch in Europe fairly soon, especially Germany and also the UK. The main reasoning was focusing on the largest English-speaking market first. Now that we're growing fast, we will expand back to Europe,” he says.
Browsing through the website (being based in Europe I cannot get the app), I do find some silly nice things that at first I think are toys for my kids but then realise they are colourful hooks for kitchen appliances.
The one thing I get most excited about is something that I probably will never be able to get from the European site — fresh-frozen lobster tails from Maine. That I wouldn’t mind sharing on my social media, whether I’m Gen Z or not.