What is Fordeal? Why has Fordeal developed so well in the Middle East? Today I will introduce to you the Middle East e-commerce platform Fordeal.
Fordeal is the second dark horse of Chinese cross-border e-commerce in the Middle East after JollyChic. It has kept a low profile since its inception, but has developed rapidly. From 370,000 users in 2017, to 16 million new users in 2018, and 27 million new users as of September. Sales reached 1 billion yuan in 2018 and are expected to exceed 2 billion yuan per year.
In the Chinese cross-border e-commerce download rankings compiled by AppAnnie, Fordeal ranked tenth. For a company that has only been established for two years, this is already very difficult.
Company Profile
Fordeal was founded in 2017. The main body of the company is Guangzhou Dora Technology Co., Ltd. Its CEO Lv Hao (Shi Nian) is a former early member of Mogujie and the head of the algorithm team.
Development History
1. In March 2017, six founding members of Fordeal gathered in a 40-square-meter house in Hangzhou to complete the development of the first version of Fordeal.
They have experienced the rapid rise of China's e-commerce and believe that the world-leading e-commerce experience is an opportunity for Chinese e-commerce to go global. As for the target region, they chose the Middle East, which is a region with scarce resources but high per capita income;
During its early stages, Fordeal received angel round financing from Xiangfeng Capital.
2. In September 2017, the Fordeal team moved to Guangzhou. As an international trade 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 world's factories, especially clothing factories and small commodity factories, are basically in China. These are the things that overseas e-commerce will sell as the first step in overseas trade.
3. In October 2017, Fordeal officially began to promote itself, and the platform's sales increased rapidly at a rate of doubling every month;
From December 2017 to January 2018, Fordeal received a Series A round of financing led by Yuanjing Capital and Qianshi Venture Capital;
In May 2018, it received a B round of financing led by Shunwei, with old shareholders participating in the round; in December 2018, it received a C round of financing led by Hillhouse Capital, with old shareholders participating in the round; in January 2018, it received a C+ round of financing led by Heyu Capital;
Development Vision
Fordeal said that in 2018, in addition to further deepening its presence in cross-border merchants, Fordeal will complete localization upgrades and will upgrade from a cross-border e-commerce company to an overseas e-commerce company.
Cross-border e-commerce emphasizes exports, and its perspective is from the supply side. Overseas e-commerce refers to focusing on local consumers and solving all consumption demands of local consumers. Based on this, Fordeal will complete the construction of local warehouses by 2020, introduce a large number of local merchants, and cooperate with local logistics companies to upgrade logistics trunk lines and last-mile delivery services. After the upgrade is completed, Fordeal will become a comprehensive e-commerce platform covering all categories.
Fordeal positions itself as a retail service platform. On the one hand, it focuses on consumer needs and introduces excellent merchants who have long served Middle Eastern consumers; on the other hand, it collaborates with logistics, warehousing, payment and other service providers to improve e-commerce infrastructure. Currently, Fordeal has no entry fees, no funds settlement fees, and a 15-day account period, which are policies that have absolute advantages over most platforms.
The pit that you skip
With the big brother Zhiyu paving the way ahead, Fordeal's strategy was very cautious and avoided many pitfalls that Zhiyu had encountered. For example, Fordeal's model is relatively light. It did not involve heavier overseas warehouses, local order fulfillment, B2B bulk cargo imports, and self-built local dispatch teams in the early days. It has always focused on e-commerce itself and has not engaged in other businesses such as payment and local life.
Why does the Middle East continue to produce dark horses in cross-border e-commerce?
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, nearly 20% of global trade logistics, and nearly 4% of the world's GDP. Whether or not to seize this market is a question for many independent sites or sellers.
In fact, compared with developed markets, the difficulty of major emerging markets is equally difficult. The difficulty of e-commerce in the Middle East lies in the greater political instability, smaller population, greater physical distance than Southeast Asia and India, and greater cultural differences. But the Middle East also has its own advantages, making it a natural soil for the development of cross-border e-commerce
1. The industrial structure is incomplete and all goods are imported
There are several popular regions for cross-border e-commerce in emerging markets: India, Southeast Asia and the Middle East. Each country will more or less protect its own light industry and impose restrictions on foreign goods, especially India. In the past year, many e-commerce companies have suffered a lot in this area.
However, due to the hot climate and desert environment in Saudi Arabia and other Gulf countries, it is difficult to develop light industry on a large scale, and goods are mainly imported. Therefore, the industrial structure determines that these countries will not impose too many restrictions on foreign goods. The generally low tariff levels in the Gulf countries are an obvious manifestation of this.
2. E-commerce is still in its early stages of development and has a low penetration rate
The development of local e-commerce is still in its early stages, with the overall e-commerce penetration rate being only 1.9%. Even in the UAE, where commercial activities are the most active, the e-commerce penetration rate is only 4.2%, which is far from regions such as China and the United States where the rate is over 10%.
According to Fordeal, only about 5% of the tens of millions of users have ever made online purchases. In terms of consumption frequency, Middle Eastern customers basically shop online once a month, but Taobao users in first-tier cities shop more than 40 times a year on average.
The current stage of e-commerce in the Middle East is similar to that of China around 2008. At this stage, consumers, merchants, and logistics are all very immature, but immaturity means a lot of opportunities.
3. Relatively wealthy, with high average order value
Saudi Arabia's per capita GDP exceeds 20,000 US dollars, and the UAE's is as high as 40,000 US dollars. The purchasing power here is far beyond the reach of emerging markets such as Southeast Asia and India. This is already well known and will not be repeated here.
This is the end of my introduction to Fordeal today. If you have any questions about Fordeal, please leave a message in the comment section.
