It’s no secret that one of the many changes that has taken place during COVID-19 has been the increase in online shopping. Consumers spent nearly $862 billion online with US merchants in 2020 (Digital Commerce), up 44% year-over-year, the highest annual growth in at least two decades.
That shift put many businesses in warp speed to focus their e-commerce strategies in the early days of the pandemic. It also led to a spike in the number of e-commerce sellers as a whole, with record numbers of sellers moving to third-party marketplaces like Amazon and Etsy and launching on platforms like Shopify and WooCommerce.
As sellers have rapidly moved online (4+ million US-based sellers account for more than $150 million in GMV), one of the biggest hurdles to clear is offering affordable, unique inventory to stand out from the growing field of competition. China has been a popular sourcing destination for small and large businesses alike, specifically Alibaba and Aliexpress as the most commonly used vendors. But as the barrier to selling online has dropped, many SMBs have started to look elsewhere to differentiate, particularly other South Asian and Southeast Asian countries (think: India, Bangladesh, and Vietnam). International retail chains and buying houses have long enjoyed sourcing from these regions, but they’ve remained mostly inaccessible to small buyers due to the unstructured, offline nature of doing business there.
These countries already have many suitable export categories in retail. Of an estimated $67 billion worth of retail goods exported out of India every year, the largest retail categories include jewelry, apparel, accessories, and home décor – all of which translate well to e-commerce. (Today, the US is already the largest export market for Indian goods, representing 17% of total goods exports.) Yet no online platforms have really existed for US-based SMBs to discover trusted suppliers, purchase large quantities, and manage the entire buying process.
That’s exactly why Bzaar exists and why we’re excited to lead their seed round.
Bzaar is a wholesale marketplace connecting suppliers in India with local sellers in the US. It solves the two main problems holding back small brands from sourcing in India, specifically vendor discovery (i.e. finding unique, vibrant designs) and trust (i.e. verifying suppliers of those items are legitimate and reliable). Bzaar gives them the same advantages as big retailers have long experienced when it comes to international sourcing (unique selection of high-quality goods, competitive prices, reliable shipping windows, flexible payment terms, etc.) to make it easier than ever to buy uncommon products directly from skilled designers, craftsmen, and artisans.
Brands can choose made-to-order goods from an extensive catalog of products offered by some of the smallest to some of the largest exporters. They can customize and private label these products, as well as work with Bzaar team to get their own products manufactured by these exporters. In any of these instances, Bzaar provides an end-to-end experience, taking care of the entire process from sampling to packaging, quality control to logistics.
We’re excited to lead the company’s seed round, and in doing so, to invest in one of our own. I’ve known Nishant for nearly a decade, including while he was an investor with Canaan India. Most recently, Nishant led corporate development at Flipkart, India’s largest e-commerce company (and now a part of Walmart). Nishant, along with the rest of his founding team, is incredibly knowledgeable on e-commerce strategy, well-connected to the supplier ecosystem in India, and knows the value that can be created by enabling SMBs to digitally source products across borders.
As we all look to put COVID in the rearview mirror, we believe businesses will look to lessen their sole dependence on China for product sourcing, and India represents a massive, underpenetrated opportunity. Between growing demand from SMBs in the US, and a significant amount of wholesale activity already happening in India, the market Bzaar is targeting is extremely large. The team understands the enormity of the challenge facing them, and the digital transformation required to make international wholesale transactions a seamless online experience.
We believe in this team, their deep experience, and the vision to create a cross-border B2B marketplace. We are thrilled to support them and can’t wait to see what’s next.