Prior to launching online marketplace Verishop in 2019, co-founders Imran and Cate Khan defined a white space with strong potential: an e-commerce site catering to influencers-turned-brand founders.
“If you were an independent brand creator, and you were building a brand with a point of view and a story to tell, there was no platform [for you],” Imran Khan said on the latest Glossy Podcast. “Brands in the ‘makers’ economy’ don’t want to be on every platform; they want to be on a platform where they can distinctively tell their stories. They were distributing through social media. Our thesis was that social media would become more crowded, making it difficult for these brands to acquire customers.”
Of course, that’s proven true. In step, Verishop has evolved its business model to provide creator brands with marketing solutions, on top of serving as an aggregator. It’s been successful: Today, Verishop sells 5,000 brands from 3,000 merchants. Its monthly merchant retention rate is over 99%, and its merchant count grew 120% year-over-year in the third quarter. Its marketing solutions business grew 6X in the same period.
“We’re seeing incredible product-market fit,” he said.
Below are additional highlights from the conversation, which have been lightly edited for clarity.
Finding success with livestreaming:
“It’s not so much that livestreaming is working [for us], but [rather that] post clips of our livestreams are becoming very valuable. [Successful] livestreaming really depends on the host — whether the host is very well-known and has a big following, and can bring in a large audience. But we created this [process] where, once a livestream ends, automatically through machine learning, we cut those livestream [videos] into mini clips and put them onto [corresponding] product description pages. We’ve found that this makes a product description page very rich and very helpful. A shopper will not only find product images, but they’ll also see these video clips to learn more about the product. And that’s led to 2X higher conversion.”
Whether social platforms are competition:
“The fact that all these big platforms with lots of revenue and hundreds of thousands of employees are [investing in shopping offerings] validates the market need. But some of the things we’ve done have been very different: No. 1, when a shopper comes to our platform, there is direct intent; they’re coming here to shop, [rather than] look at some influencers’ Stories, for example. We are a shopping destination. … The second thing is that we’re really focused on giving shoppers the best experience. If you look at our net promoter score, it’s around 70. It’s one of the best-in-class scores. We backstop the shopper. If you buy something and you have a problem, you can call our customer support team … and we refund you. None of the social platforms want to do that. With an open platform that doesn’t backstop you, you are vulnerable as a shopper to scams. And that’s a terrible customer experience. The third way we’re differentiated is that we have this vetting process. I call it an ‘Apple App Store’ process. Anybody can submit an app to the Apple App Store, but Apple doesn’t approve everybody. They want to make sure there is nothing malicious there that can impact an Apple customer experience. … [Meanwhile] anybody can be a social media; these days, you can get a blue checkmark for eight bucks.”
The potential for Verishop to become a brand incubator:
“I don’t want to be an incubator for brands, because [that presents] this conflict: ‘Do you support the in-house brands or [do you support your third-party brand partners]?’ My long-term vision is that we [become] a platform for hundreds of thousands of passionate creators of product. If you’re a passionate creator of creating music, you go to Spotify; and if you’re a passionate creator of creating funny, short-clip videos, you go to TikTok. We want to be the platform that supports people who are passionate creators of building brand and product. … But we did develop one [in-house] brand. The reason was so that we could learn the pain points of brands. … [We found that] they need help with packaging. So now, we call up packaging companies and offer them 5,000 brands — if they offer a special deal, we’ll be able to [promise them] more and more merchants, and we can become a customer acquisition source for them. We [also] realized brands need marketing [support], because social marketing — in many cases — is not working. So we’re serving as a new source of advertising product for them.”