So-called ‘social shopping marketplaces’ have slowly emerged as smartphone and tablet adoption has risen. The heady combination of social networks and shopping never seemed to work that well on the web, but on mobile they have proven to have more of the potential that was always promised but rarely delivered, simply because of the better user interface.
One startup is taking things to the next level, however.
Back in 2012, London and New York based Shopa launched as one of these “social marketplaces”. There, users are rewarded with discounts for promoting products they like. The company later raised $1.4 million.
Today however, its super-charging its model with $11m in new funding, one of the largest Series A investments put into a UK start-up to date.
The additional funding comes from existing investors Octopus Investments (which backed Zoopla, YPlan and Swiftkey) and Notion Capital (which funded Shutl and Duedil). Shopa now plans to launch in China and India after previously launching in the UK and US.
Shopa works both on desktop and via an iOS app.
Users create a personal profile, then customise their own product feed for the items and brands they like. They are then rewarded with discounts by Shopa each time one of their friends purchases one of their recommended products. They can also follow and like other customers, as well as specific brands and products.
The experience is broken, however, when you try to share an item which doesn’t qualify for any discount. It’s these niggling kinds of problems that extra funding will presumably sort out as it looks to build wider partnerships with retailers.
Peter Janes, Founder and CEO of Shopa, says: “The technology (think of it as a monetized version of bitly with a shopping cart attached) allows us to track everything that happens with regards to our retail partners products across any platform and device. Then we can feed that back to retailers. Basically in real-time we can show them who the top advocates are, which products are trending in realtime, which platforms deliver the best ROI, and we can track the whole process from a share to a purchase.”
He tells me that about a third of all Shopa’s revenues in 2016 will come from enterprise packs to retailers of the consumer and retail data they we can unearth via the platform.
According to Shopa, some studies suggest that a social recommendation of a product is 45x more effective in generating sales than any traditional marketing or advertising method.
Let’s hope they get the app right then…