Fordeal, established 2 years, the second dark horse in the Middle East
Editor’s note: This article is from WeChat public number “ePanda goes to the Middle East” (ID: ePandaMENA).
Fordeal is the second dark horse in the Middle East for cross-border e-commerce in the Middle East after JollyChic. It has been keeping a low profile since its inception, but it has developed rapidly. From 370,000 users in 2017, to 16 million new users in 2018, and 27 million new users in September 2019. In 2018, sales reached 700 million yuan, and in 2019 it is expected to exceed 2 billion yuan.
Fordeal ranked 10th in the ranking of China’s cross-border e-commerce downloads by AppAnnie. For a company that has only been established for two years, it has been very difficult.
How did Fordeal develop?
Company Profile
Fordeal was founded in 2017. The company’s main body is Guangzhou Yula Information Technology Co., Ltd., and CEO Lu Wei (food year) is an early member of the former Mushroom Street and the head of the algorithm team.
Development history
March 2017, the six founding members of Fordeal gathered in a 40-square-meter home in Hangzhou to complete the development of the first version of Fordeal.
They have experienced the rapid rise of Chinese e-commerce, and believe that the leading e-commerce experience is an opportunity for Chinese e-commerce to go out to sea. In the target area, they chose the Middle East with limited supplies but high per capita income;
For the start-up period, Fordeal obtained the angelic financing of the peak capital.
September 2017, the Fordeal team moved to Guangzhou as a whole. As an international business center, Guangzhou is closer to the production bases in Guangdong and Fujian. Behind China’s e-commerce is the advantage of the domestic industrial chain and supply chain. The global factories, especially the garment factories and small commodity factories, are basically in China. These are the first things that sea-going e-commerce will sell as the first step in sea trade.
October 2017 Fordeal began to be officially promoted, and platform sales increased rapidly with monthly volatility;
December 2017 to January 2018 Fordeal received a Series A round of financing led by Yuan Zhen Capital and Asahi Ventures;
May 2018, obtained the B round of financing led by Shun, the old shareholders and investment; in December 2018, won the C round of financing led by Gao Wei, the old shareholders Investment; in January 2019, won the C+ round of financing with Yuyu Capital;
Development Vision
Fordeal said that in 2019, in addition to further deepening cross-border merchants, Fordeal will complete localization upgrades, which will be upgraded from cross-border e-commerce to overseas e-commerce.
The cross-border emphasis is on exports. The perspective is from the supply side. The overseas e-commerce refers to the local consumers and solves the consumer demands of all local consumers. Based on this, Fordeal will complete the construction of the local warehouse in 2019, introduce a large number of merchants, and cooperate with local logistics providers to upgrade the logistics trunk line and the last kilometer delivery service. After the upgrade is completed, Fordeal will become a comprehensive e-commerce platform covering all categories.
Fordeal will position itself as a retail service platform, on the one hand, around the consumer demand, introduce long-term service to the Middle East consumers; on the other hand, cooperate with logistics, warehousing, payment and other service providers to improve the e-commerce infrastructure . At present, Fordeal has no handling fee, no settlement fee for fund settlement, and 15 days of account period and other policies have absolute advantages.
Skip pits
Before the big brother is in charge of the road, Fordeal’s strategy is very cautious, avoiding a lot of pits that have been stepped on. For example, Fordeal’s mode is light, heavy overseas warehouses, local orders, B2BImports of bulk goods and self-built teams have not been involved in the early days, and they have been focusing on e-commerce itself, and have not done any other business such as payment and local life.
Why does the Middle East continue to produce cross-border e-commerce black horses?
The Middle East is one of the most unstable regions in the world, but it accounts for nearly 30% of the world’s oil supply, accounting for nearly 20% of global trade logistics, accounting for nearly 4% of world GDP. Whether this market should be grasped or not is a lot. Independent station or seller’s questions.
In fact, compared with developed markets, the difficulty of major emerging markets is not easy. The difficulty of e-commerce in the Middle East lies in the fact that political instability is large, the population is small, the physical distance is farther than Southeast Asia and India, and cultural differences are even greater. But the Middle East also has its own advantages, making it a natural soil for cross-border e-commerce development
The industrial structure is incomplete and the goods are all imported.
Cross-border e-commerce has several hot spots in emerging markets: India, Southeast Asia and the Middle East, each country will protect its own light industry more or less, and restrict foreign goods, especially India, which has been a lot of electricity in the past year. The merchants have planted a lot of heads in this piece.
However, the Gulf countries such as Saudi Arabia are subject to the hot climate and desert environment of the country. It is difficult to develop light industry on a large scale, and the products are mainly imported. Therefore, the industrial structure determines that these countries will not have too many restrictions on foreign goods. The general low tariff level in the Gulf countries is a clear manifestation.
E-commerce is still in its early stages of development with low penetration rate
The development of local e-commerce is still very early, and the overall e-commerce penetration rate is only 1.9%. Even in the UAE, where business activity is most active, the penetration rate of e-commerce is only 4.2%, and more than 10% of regions such as China and the United States still have It is very far away.
According to Fordeal, only about 5% of tens of millions of users have e-commerce shopping; from the frequency of consumption, Middle Eastern customers basically buy online once a month, but Taobao first-tier users spend an average of 40 per year. More than once.
The Middle East e-commerce at the current stage is close to China in 2008. At this stage, consumers, businesses, and logistics are very immature, but immature means a lot of opportunities.
Relatively affluent, high unit price
Saudi’s per capita GDP is over $20,000, and the UAE is up to $40,000. The purchasing power here is unmatched by emerging markets such as Southeast Asia and India. This is already well known and will not be repeated.
编 | 云晞@出海
Picture|Pexels
