The official launch of this project was on 12th December 2015. In format, ToBox looks like the usual strip of goods, which has search by category, price filter, ‘basket’, geographical location, information on new goods, discounts and special offers, a ‘select’ function and so on. In its nature, the project is a marketplace, an aggregator of small shops and producers, master craftsmen and designers, in some ways like Asos, Wildberries, Lamoda and Etsy, but it does of course differ somewhat from what else is in the market at present. The main difference is that it has its own messenger, like the ‘intercom’ so widely used in electronic commerce, but without the delay, a sort of analogue of a real live sales consultant.
Denis Ponomarev, Products Director of ToBox:
— People make very active use of such correspondence with the sales department. It is not stressful for the vendor either, because he sees both his own errors and the reaction to the goods and prices. Absolutely no pressure to sign if you aren’t buying, all you have to do is register. And you can even say “it’s cheaper at the other place over there”...
The ToBox Seller app, by which the vendors can fully control their shops by telephone, became available in Google Play on 14th January, and in AppStore on 4th March 2016.
The ToBox service does not try to compete with the big players. It relies on salespeople on the social media (Instagram, vKontakte). It gives them a tool for more efficient sales.
— Why do people trade in the social media, after all? Because there is a large free audience there. That’s it. But it is hard to sell there, there are limitations on descriptions, direct marketing works badly, you have to keep looking at the posts, going into the commentaries of clients, not just those of “critics”.
So we created convenient functional software. And by the middle of March, 1500 shops had already come over to us from the social media. Now we are approaching the moment when we shall be ready to begin cooperating with medium-sized shops. But we are in no hurry. We don’t want to cut off our concept at the roots.
The dynamic of the expansion of the partnership network is not bad. Growth totals about 300-400 shops a month. When the service was first open, you had to make an application to “come up” on it, on which a decision was taken later by the manager. This helped to avoid a wave of testing shops and to get onto tried and tested vendors at once. Later we developed a moderation system: a whole section looking through each kind of goods and each shop. A reply is given within 24 hours, always with comment and advice on how to improve the proposition. Now this section is expanding. It sets out 1500-2000 forms of goods a day.
The service does not earn anything and exists by investments. At the launch stage, executive director Feng Lin invested about half a million dollars of his own money. In September, two sponsors were drawn into Round A: Xiaomi and Shunwei Capital. The total investment was $2,000,000. Now we’re getting ready for Round A+. According to the plans, the Shunwei Capital investment group will invest $50,000,000 in the startup in 2016 (!).
The creators know very well that it takes a very long time for e-commerce projects to pay for themselves. For example, Lamoda, according to its own calculations will reach break-even point in five or six years.
— We are taking it one step at a time, and we admit that the project is long-term and it would not be sensible to take money out of it now. We are winning our audience, people who consider, as we do, that the service has a future, and are willing to work with us.
Anyway, the site is free and will remain so. We plan to achieve profitability from another project, our own paid service, which we shall start developing within two years. It will be integrated into the site, and all the shops represented on ToBox will use it. And the company will take a percentage of that.
The average cheque is now 1800-2000 roubles. Although there are also luxury offers, designer goods branded articles from Italy – there is even a quadricycle shop. And there are orders worth many thousands, even hundreds of thousands of roubles.
ToBox in Russia is only the first phase of the project. In the long term the creators of the service see prospects for expansion into the developing e-commerce markets – which means Australia, India and Brazil. They also want to make an Initial Public Offering.