Shopa is hoping that this time rewarding users with discounts will be the way to drive an audience around a shopping-oriented social media app.
Social-media shopping has never quite taken off: eBay and Amazon, while successful, lack a social sharing aspect that appeals to younger consumers. Pinterest acts predominantly as a showroom rather than a marketplace. Not all products on the site can be bought.
Facebook Beacon infamously cratered when people got angry that their purchases were being broadcast on Facebook. Both Twitter and Facebook have experimented with "Buy" buttons but they have not been widely adopted. Facebook in particular has a long history of failing when it comes to financial products. Facebook's discontinued e-commerce plays include Facebook Deals, Facebook Offers, Facebook Gifts, and the experimental "Want" shopping button. For some reason, consumers have repeatedly balked when it comes to using Facebook as a shopping device.
Shopa set up as a B2B marketplace for retailers in 2012, and this year raised more than £7 million in investment funding to launch a consumer model internationally. The company has taken $12.4 million in total. The investment came from Oxtopus Investments (which has backed the likes of Zoopla and YPlan), and Notion Capital.
Shopa works in the same way as other social networks, with a profile, tools to favourite items and add collections. But users are also "rewarded" with discounts if one of their connections/friends purchases something they've spotted and recommended. CEO Peter Janes, 33, tells Business Insider that the company benefits both shoppers and retailers. For customers, it acts as a social network, where people "discover, share, and buy products." The rewards strategy and the self-contained nature of the site make it different. The purchase takes place on Shopa, unlike sites such as Pinterest which drive traffic to retailers' own sites to complete transactions.
As an e-commerce platform for stores, Shopa "monetises the power of recommendation," Janes says. "It provides retailers with the optimum sales platform." Links are monetised when posted, Janes says, and products themselves can begin to "trend."
Shopa has patented social tracking technology that allows it to follow and analyse social interactions around their brands, across all devices, in real time. The network's analytics give retailers data on what consumers buy and how they got to each product. In short, Shopa shows shops what people are buying, when they're buying it, how they found items, and where and to whom they shared their purchase. Janes says Shopa follows the whole process - from discovery to sale.
"For example, when John in Reading clicks on a pair of shoes, buys them, it will display his purchase in a similar way to Pinterest. But we can also help show retailers how he came across the shoes and who he shared them with. We can actually put a value to sharing something - we could tell an online store how much that sale was worth in terms of recommendation; £45, for instance," Janes says.
Shopa launched an iOS app earlier this year ahead of the company's official consumer launch on March 10. The company has 32 employees in its London King's Cross HQ.
Janes also tells BI that the company is opening offices on the East and West coast of the US, as well as in Delhi and Shanghai. He says India and China as "huge areas for growth." "These marketplaces are massive for e-commerce; a lot of our revenue, we expect, will come from here," he notes.
Shopa
So far, Shopa has around 400 brands on board. High street retailers such as River Island have signed up, though there are also high-end fashion names like Jimmy Choo and Gucci on the site.
Janes says he hopes to see 10 million members worldwide within a year. The user demographic is 18-30, with a relatively high disposable income (i.e. millennials, probably largely from London).
Ultimately, Janes believes Shopa will work where others have failed. He says the "power of recommendation" today impacts how Millennials find and buy products more than traditional marketing methods - companies don't buy ads on the site. "The product does the talking," he tells BI. "Shopa doesn't use banner ads, but aggregates shares and likes to showcase sales. Social is the holy grail of e-commerce."