Buyers clubs along the lines of Vente Privee (which started in France) and Brand For Friends in Germany are spreading like wildfire across Europe and no wonder. They are business models tailor-made for the recession, offering big discounts on designer goods among almost guaranteed buyers. They hit revenue almost from the word go and the jungle drums tell me that Vente-Privee is on course to deliver hundreds of millions in revenue this year alone.
Now online shopping club KupiVIP.ru in Russia, operated by Privat Trade Ltd has raised $8 million in a second round of funding from Mangrove Capital Partners, Arlan, and ABRT Fund, we hear from Russian blog/search startup Quintura. The company previously raised $3 million from the same investors. The site organises designer brand online sales in fashion and fashion accessories with discounts of up to 70% off boutique prices. KupiVIP has hit 200,000 registered users since launching last October.
Now, Brands4friends is also Mangrove backed. Notice a trend anyone? Expand into big territories and then exit by rolling up these startups into a sale to a retailer hit by the downturn that needs a new model. QED, perhaps…
As I wrote in February last year, News International saw the trend early in the UK and invested in online fashion company Brand Alley UK, which offers private sales and bargains designer fashion brands. The joint venture with French online boutique BrandAlley is, of course, a luxury “private members’ club”. BrandAlley was launched in 2005, is backed with VC cash (I’m just checking who) and claims a membership base of well over 1.3 million and 200 brands.
There are rumors that Magento, the wonderful eCommerce platform, is releasing a private sales module that will enable the proliferation of private sales across Europe and North America. Given the platforms low-cost and barrier to entry, we may see more of these type site on the ground soon.
Hi there,
First, I’m french, and impressed to see TC US talking about these “ventes privées”
Then 1 question: is there any US Website on that model ?
And a comment:
In France, there is almost 40 websites on that model (you can see them all here: http://www.touteslesventes.com/les_sites_de_ventes_privees.html), and it looks like the market is getting to struggle. One or two big players, with lots of funds and a real platform (not only the webplatform, but also the logistics, the photoshooting, the marketing, and so on..) keep getting up, but many others smaller just try and leave the market after 1 year when discovering how not-so-easy it is …
Also, users of these websites get easily registered to all of these websites, meaning mass-mail covered (not spam.. but 10 emails about buyers club each day … ouch), meaning the direct email is not anymore efficient to reach these targets.
So how to ? Spend thousands dollars each week on advertising in Google ads. So, only the bigs still live..
==> I’m not sure about the magento module, even if Magento is wonderful. My opinion is that the trick is NOT the webplatform (through an agency, it would worth 15-25k$). But everything around it
Regarding BrandAlley, their VCs are :
BNP Paribas (Bank),
Caisse des Dépôts et Consignations (CDC Entreprises – it’s a state organisation)
A Plus Finance (VC)
And to give more few stats, on touteslesventes.com since january 7th ‘09, we’ve covered 1030 sales, including 572 different brands.
Best,
PH
wow, 2 comments on a post about startups/business models in Europe/Russia..
Mangrove (probably Michael Jackson) is going great guns in Russia.
There are a lot of these clubs already in existence and there is a big resale and exchange market (in Moscow at least) for designer clothes.
8 million seems a lot of cash, what is it being used for, do you know?
Hi,
Got to feel sorry for the Web1.0 guys of LetsBuyit.com.
I realise it’s slightly inverted, but the model of a closed (private) group having access to limited stock at discount prices stands – and they were doing it in the 90’s; The current iteration has been in development for years now.
Kind regards,
Shakir Razak
Looks like the only real use of Quintura is as a source of gossip from .RU
It’s amazing how much cash these guys collect, but for VC’s it’s an easy game: some must be bought by larger retailers in due time. An example of one in which retailers already invest is the Dutch based (but delivering all throughout Europe) 42HRSClub (http://www.42HRSClub.com). They seem to grow very fast and have good relationships with the brands. That also counts, I think.
I was digging the name KupiVIP so much, I just got http://www.KupiTix.com. What do you guys think?
Michael, “Kupi” mens “buy” in russian
KupiVIP probably copied the name of the start-up BuyVIP (www.buyvip.de) in Frankfurt.
read here
http://www.aromatechab.se
To clear this up, KupiVIP did not get 8Mio in the 2nd round! They got $2,5M in the 1st round and sold 20% of their shares for $2M end of of this spring. They are currently spending massive marketing money and are educating the market. Good for the No2 in the market. If anybody knows an investor for the No2 ($1M needed) please let me know.
Rds from Russia
MatWin
PS:4PH Langlois: check out http://www.gilt.com, that’s the US start up which is already selling millions.