Shopa sells goods through online recommendations and aims to reach 20m users by the end of next year
One might imagine there are not many firsts left in online retailing but Peter Janes would disagree, fired by an ambition to revolutionise the way people shop on the web.
The British entrepreneur is chief executive of Shopa, a London company claiming to be the world’s first online marketplace selling fashion goods through the recommendations of people on social networks.
It offers 450 brands, with others including River Island in the pipeline, and is expanding into homewares and consumer electronics.
Mr Janes says deals are in place to form partnerships that will eventually take this number beyond 10,000 brands.
Shopa has more than 1m users and is projecting that it will reach 20m users by the end of 2016.
“What we have is in essence the world’s first social marketplace,” says Mr Janes. “We have the ability to associate an individual with a recommendation and to track that recommendation across any platform, whether it is Facebook, Twitter, Pinterest or something else, on any device.
“We can show users what products are trending, who their top advocates are, where their products are being shared and ultimately what’s being bought because of recommendations.
“We can attribute an individual; with a referral, which has not really been done before. We can see what is being promoted and where it’s happening and filter all that back to retailers or businesses who work with us. And we do it all in real time.”
Mr Janes, 33, a former sports agent at IMG and Wasserman Media Group, set up Shopa in 2011 after the sale, for a seven-figure sum, of his previous business, the Post Network, which had developed software allowing users to create personalised news feeds based on their interests.
He says he noticed at his last business the limitations of so-called “affiliate networks” – intermediary agencies that allow marketeers to reach individuals by having their banner adverts on thousands of blogs and personal websites, paying the individuals behind such sites for traffic and sales generated.
“Affiliate networks hadn’t really evolved in more than a decade,” he says. “Individuals couldn’t plug themselves into these networks and 70pc of all sales online were generated through word-of-mouth or recommendations from individuals. We set about trying to create the technology that allowed an advertiser or retailer to work with individuals within social networks.
“What has happened since 2008 is that an individual is able to influence an exponentially bigger audience than they were before because their sphere of influence has typically grown from maybe 100 Facebook friends to over 1,000 and they have now got Instagram, Twitter and LinkedIn accounts, so their ability to touch others is much greater.”
Shopa secured patents for its technology in 2012 and has created what Mr Janes says is already the world’s largest affiliate network working with individuals. It holds no stock itself, pulling in products from retailers on its portal.
Shopa takes a commission of between 15pc-20pc on sales, though it does not disclose its revenue. Each of its sales belongs to the retailer supplying the goods, which owns the relationship with the customer. But Shopa is able to track users who sign up, reward them for their recommendations and create a link between them and retailers.
“The key difference between us and traditional marketplaces is that users are discovering products based on the interactions of others,” says Mr Janes.
“When you go to Amazon.com or Alibaba’s Tmall in China you normally know what you want before you go there. They’re the best propositions in the world for allowing you to search for what you want, find it, buy it and get it delivered to you.
“What they don’t do very well is help you discover new products and brands you otherwise wouldn’t know about, based on interaction with people you know and trust. That’s what we’re doing.”
Shopa has 45 staff and offices in London, New York, Mumbai and Shanghai, and last year secured $11m (£7.2m) of funding from venture capital groups including Octopus Ventures and Notion Capital.
It has French, German and Spanish websites, is launching a Mandarin version this month and plans to be operating in 10 countries, including Australia and New Zealand, by the end of this year, and in 30 countries within three years.
Mr Janes has recruited internet commerce executives such as finance director Adam Woodhouse, formerly of fashion website ASOS, and chief operating officer Nicky McShane, previously at advertising giant WPP. Shopa is now working on another round of financing to allow it to scale up its business in China.
“There’s only one social media-based marketplace out there and that’s us,” says Mr Janes. “We want to be a London technology company waving the UK flag globally. It’s a pretty ambitious project but we have aspirations to be the UK’s biggest global technology company. If we open up India and China in the right way, it wouldn’t be silly to suggest we could have over 100m members in three years.”
This article was written by Andrew Cave from The Daily Telegraph and was legally licensed through the NewsCred publisher network.