After the review of classifieds and flash game sites, I think it would be worth it to devote some time to look at the situation of the private shopping clubs or online outlets that are proliferating on the internet.
Now we can say that ecommerce is functioning well in Spain and I think that, to a great extent, it is because of the success of these kinds of sites that have become an obsession with a lot of people (waking up at 7 in the morning to enter a promotion of Privalia is something not very normal).
No surprise that this success is not only a phenomenon in Spain. In France, for example, there’s a real rage and they have Vente Privee as the best example of this business. This company has made a strong arrival in the Spanish market and already accounts for a few million clients all over Europe. On a European level, there’s another company, Private Outlet with versions for five countries.
So that’s the panorama of the Online Outlets in Spain and Latin America. I have found 10 projects of this kind, 9 developed in Spain and one in Argentina. Of the 10 projects, there are 3 (Privalia, BuyVip and Vipventa) that have received investment and compete directly with each other. There are two others that are beginning to stand out (DreiVip and Ofertix) and another 5 that are in their initial stages. Let’s take a further look at each one of them:
The leaders:
Founders: Lucas Carné, José Manuel Villanueva and Bruno Coffre
Founded: 2006
Investors: Luis Martín, La Caixa and Nauta Capital
Funding: around 7 million euros
Access: does not require invitation
Headquarters: Barcelona (Spain)
Founder: Gustavo García
Founded: 2006
Investors: DAD, 3i, MCI, Michael Kleindl, Bertelsmann, Grupo Intercom
Funding: around 17.5 million euros
Access: invitation required
Headquarters: Madrid (Spain), Milan (Italy), Frankfurt (Germany)
Founder: David Ducos
Founded: 2006
Investors: Mobius
Funding: 2.75 million euros
Access: invitation required
Headquarters: Madrid (Spain)
Notes: the blog of Sonia
The aspirants:
Founder: Margarita Olivares
Founded: 2006
Investors: unknown
Funding: unknown
Headquarters: Badalona (Spain)
Founder: Antonio Alcantara
Founded: 2007
Investors: unknown
Funding: unknown
Headquarters: Barcelona (Spain)
Notes: Revelation Web Yahoo 2007
The recent arrivals: Geelbe (Argentina), Glamounity, Sinempujar, Compralia and Vipcompras
Do these newcomers have any possibilities to compete with the other five companies that enjoy a huge competitive advantage and with other companies that have already arrived from other parts of Europe?
As far as the competition between the three big ones (Privalia, Buyvip and Vipventa) with the figures of investments and business that they manage, the leadership is going to be closely related with the creation of a brand, with obtaining the best products at the best prices and with offering the best customer service possible.
An idea for these companies looking to increase their user base: can you imagine if one of these companies reaches an agreement with Tuenti to publish their campaigns of branded clothes in form of an event inside the preferred social network for young people?
2 October 2008 at 6:04 pm
The idea is certainly not novel, there are several online outlets based in the USA. They all started out with strong public interest; good sales performance….but all had low margins. Ultimately, none of the investments became success stories. I suspect the same will be true Spanish outlets. The current credit crisis is creating chaos in the retail segment and online outlets will be hit very hard. Their investors will likely get wiped out or foolishly continue to sink more capital. Most of the online shops, with the exception of BuyVIP, looked like they are backed by very small VCs that do not have deep pockets. Good luck!!!
2 October 2008 at 6:09 pm
Wow….I agree with Dwayne. Look at the first company….Privalia. They are funded by a bank (no a venture firm) and a venture fund call Nauta?? Tiny fund with little capital and no exits to brag about. Website says they are specialists in the wireless sector. What the #$@#!!! Wow….I wouldn’t want to be an limited partner in that fund. Bye bye $$$$$
10 November 2008 at 1:21 am
[...] the success of the private shopping clubs in Europe, it is logical that the model goes to Latin America as well. For now, Geelbe is [...]