Raena was started in 2019 to generate personal treatment brands with top rated social media influencers. Just after a number of launches, however, the Singapore-centered startup discovered an intriguing trend: customers had been buying batches of products from Raena every 7 days and reselling them on social media and e-commerce platforms like Shopee and Tokopedia. Last calendar year, the corporation made a decision to concentration on those sellers, and pivoted to social commerce.
Today Raena announced it has raised a Sequence A of $9 million, co-led by Alpha Wave Incubation and Alpha JWC Ventures, with participation from AC Ventures and returning buyers Beenext, Beenos and Attempt. Its very last funding announcement was a $1.82 million seed round declared in July 2019.
Right after interviewing persons who had established up on the net retailers with products from Raena, the company’s group understood that sellers’ earnings probable was capped for the reason that they were being having to pay retail price ranges for their inventory.
They also saw that even even though new C2C retail versions, like social commerce, are gaining recognition, the elegance industry’s source chain hasn’t retained up. Sellers generally need to purchase minimum portions, which will make it more durable for folks to start out their have businesses, Raena co-founder Sreejita Deb explained to TechCrunch.
“Basically, you have to block your cash upfront. It’s hard for personal sellers or micro-enterpreneurs to do the job with the outdated offer chain and types like elegance,” she mentioned.
Raena made the decision to pivot to provide individuals business people. The firm delivers a catalog that contains largely Japanese and Korean skincare and splendor brands. For all those models, Raena signifies a way to enter new marketplaces like Indonesia, which the startup estimates has $20 billion market place option.
Raena resellers, who are mainly ladies amongst 18 to 34-years-aged in Indonesia and Malaysia, decide what products they want to aspect on their social media accounts. Most use TikTok or Instagram for advertising, and set up on the internet suppliers on Shopee or Tokopedia. But they really do not have to have inventory. When any individual buys a item from a Raena reseller, the reseller orders it from Raena, which ships it immediately to the shopper.
This fall-transport product usually means resellers make larger margins. Given that they do not have to obtain their inventory, it also drastically lowers the barrier to launching a small organization. Even however Raena’s pivot to social commerce coincided with the COVID-19 pandemic, Deb said it grew its earnings 50 moments among January and December 2020. The system now has more than 1,500 resellers, and statements a 60% vendor retention fee just after six months on the platform.
She attributes Raena’s advancement to several aspects, including the maximize in online shopping throughout lockdowns and individuals hunting for approaches to gain additional earnings in the course of the pandemic. While pressured to continue to be at house, individuals also commenced expending extra time on the net, especially on the social media platforms that Raena resellers use.
Raena also benefited from its focus on skincare. Even though several retail types, like coloration cosmetics, took a strike, skincare items proved resilient.
“We noticed skincare experienced better margins, and there are specific markets that are professionals at formulating and creating skincare items, and desire for those people items in other elements of the earth,” she explained.
“We’ve ongoing becoming a skincare organization and since that is a category we experienced insight into, it was our initial entry place into this social promoting model as properly. 90% of our sales are skincare,” Deb extra. “Our leading-offering products and solutions are serums, toners, essences, which can make a great deal of perception for the reason that men and women are in their properties and have far more time to dedicate to their skincare routines.”
Social commerce, which will allow people today to get paid a side profits (or even a whole-time earnings), by leveraging their social media networks, has taken off in several Asian markets. In China, for case in point, Pinduoduo has come to be a formidable rival to Alibaba via its team-marketing product and concentration on new make. In India, Meesho resellers offer solutions like garments as a result of social media platforms like WhatsApp, Fb and Instagram.
Social commerce is also gaining traction in Southeast Asia, with gross products price growing threefold all through the initially 50 percent of 2020, according to iKala.
Deb reported one of the approaches Raena is distinctive from other social commerce providers is that most of its resellers are marketing to consumers they do not know, alternatively of spouse and children and pals. A lot of currently experienced TikTok or Instagram profiles concentrated on natural beauty and skincare, and experienced formulated reputations for currently being educated about merchandise.
As Raena develops, it plans to retain the services of a tech staff to build equipment that will simplify the approach of handling orders and also strike promotions instantly with makers to raise financial gain margins for resellers. The funding will be made use of to enhance its group from 15 to about 100 around the following a few months, and it plans to enter additional Southeast Asian marketplaces.
#Singaporebased #Raena #Sequence #pivot #skincare #beautyfocused #social #commerce #TechCrunch