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According to the Mckinsey and Business of Fashion report “The State of Fashion 2020“, Southeast Asia is a region of nuanced opportunity for the fashion industry. Southeast Asia is a hot combination of:
- 40% of the market is under the age of 25, young and dynamic buyers.
- Internet penetration of 63% with 402 million social media users
- Unorganized and diverse fashion retailers
- Growing middle-class disposable income
Southeast Asia is formed by six core markets — Vietnam, the Philippines, Indonesia, Malaysia, Thailand, and Singapore. The three major e-commerce players in the region — Lazada, Shopee, and Tokopedia — witnessed gross merchandise value multiply seven times between 2015 and 2018 across brands like Adidas and Maybelline.
Yet, what has contributed to Southeast Asia as the hot market today is the rise of the “zillion” valued small fashion retailers empowered by a unicorn.
It all started with a Bangkok vacation! Zilingo founder Ankiti Bose was exploring the Chatuchak market. It was an exotic market of the local designers with dignified expertise. These localized designers lacked the knowledge and skills of the digital media, because of which their talent was not global.
With business in mind and passion in heart, she met her future co-founder Dhruv Kapoor at a party. With a resolve of quitting their jobs and capital of $60,000, they created a fashionable unicorn idea to disrupt fashion technology!
What is the business model and services of Zilingo?
Zilingo’s business model is based on a technology platform that streamlines the global supply chain with innovative trade solutions. It is a visionary idea for responsible and efficient businesses that target global reach. It is headquartered in Singapore and operates in Indonesia, Hong Kong, Thailand, the Philippines, Australia, India, and the United States and has evolved to be an end-to-end e-commerce enabler.
Zilingo started as a long-tail fashion marketplace leveraging Southeast Asia’s growing internet connectivity to bring small merchants from the street markets of Bangkok and Jakarta into the e-commerce fold, supported by distribution, cataloging, and financing services Zilingo began to offer.
After beefing its distribution capabilities, Zilingo expanded its focus towards B2B opportunities across the supply chain with an eye on service opportunities the platform could offer to transform a fragmented, inefficient, cash and tech-strapped value chain.
- Zilingo Trade for Enterprises– Their fashionable marketplace is called the Zilingo trade. They provide wholesale deals using an online marketplace comprising digital catalogs and competitive prices. It delivers a seamless sourcing experience to distributors, wholesalers, and retailers. It also has order, inventory, and invoice management systems.
- Z Factory – Zilingo’s production analytics tool increases efficiency across factory floors. The quality of garments is submitted as inputs that generate data and insights across functional floors and worker efficiency. Live performance management is enabled in productions management.
- Z Marketing Services – Zilingo’s end-to-end advertising and marketing. It has a range of cataloging, graphic designing, digital marketing, and studio services.
- Z Logistics Services – Zilingo’s logistics services for making business processes and logistics efficient. Shipping assistance and flexible payments are enabled for managing multi-customers in one go.
- Z Financial Services – Zilingo’s Fin-tech model that unlocks the working capital required for scaling and operations. It provides easy access to raw material at credit at attractive interest rates and enables advance payout for future sales. It also has cross-border financing products available.
By enabling all end-to-end e-commerce services, Zilingo has received multiple milestones in its short yet significant journey. Let us observe some recent milestones achieved by Zilingo:
- 4000+ partner factories and merchants, 750+ Z software-powered production lines, and 10+ supply country hubs.
- Zilingo had turned a unicorn in 2019 and valued at over $1 billion.
- In 2019, Zilingo catered to more than seven million active users.
- To date, Zilingo has secured $307.9 Mn in funding from investors like Sequoia Capital and Temasek Holdings.
- In January 2020, it gathered a transaction flow of $100 million.
How has Zilingo built one of the largest ecosystems for retailers?
Zilingo is popularly known as an iconic fashion tech platform or data-driven e-commerce for small retailers in fashion. What is truly unique and inspiring in Zilingo’s business model is its subtle strategy that is elaborately enabled using technology. It is a source of inspiration for all pioneering e-commerce platforms for any industry.
The concept of Vertical Integration is a strategy where a company owns or controls its suppliers, distributors, or retail locations to control its value or supply chain. It benefits the companies by giving access to control processes across the value and supply chain to increase efficiency and lower costs. It can happen when a company decides to undertake an added function in the value or supply chain. It involves purchasing and bringing in-house part(s) of the outsourced production or sales process. Reliance Industries: Moving forward with backward integration
Zilingo has turned a highly capital-intensive strategy called vertical integration into a simple B2B product using technology. It has enabled even the small and medium retailers to control and analyze every function across the value and supply chain on an end-to-end basis.
What is even more interesting to note is that it has extended the Asian fashion and clothing techniques using Zilingo Asian Mall in the US.
The ZAM customer is anyone who makes or wants to make their own apparel, a retailer or reseller, or the procurement people in mid to large-size fashion brands. Our team truly believes that no merchant is too big or too small to grow their business online and that every fashion label, big or small, should be placed on a level playing field.Ankiti Bose
What is the road to zillions for Zilingo?
The Co-founder and CTO Dhruv Kapoor highlighted in YourStory’s Future of Work conference held in 2020, “Optimisation for different geographies, therefore, works beyond just languages”.
Making processes accessible and controllable is pioneering for e-commerce. Yet, localization and consumer-centric offering are what drives it forward. Adapting to the pandemic, Zilingo incorporated B2B offerings to include health, home & living, essential goods, and PPE categories.
Many retailers resorted to digitization which Zilingo is streamlining. Their product and service teams are catering to more customers to develop agility and flexibility in their operations. Zilingo has established remote working where the sales and customer service teams are now selling remotely via video calls and telesales.
The Marketing As A Service (MAAS) team has seen increasing demand for digital marketing services, which can be delivered online. According to the Mckinsey Global Fashion Index 2021, “Fashion Players Focused on Digital, Asia, and Luxury May Have an Edge.” It focuses on the silver lining strategy of focusing on the long-term and bright areas of the downturn in the fashion industry.
Building meaningful social experiences and responsible offerings will drive the growth of Zilingo’s inclusive business model. It would be a safe bet to say that we will see Zilingo stimulating equitable technology and opportunities at home too!
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