[Founder Talk] What it takes to win the social commerce race with David Ng from Pollen

06/16/20 • 38 min

BEYOND UNICORN: Private Investors' Knowledge Base

Today’s guest is David Ng, co-founder and CEO of Pollen, a community sales-as-a-service platform empowering brands to turn their fans into resellers. We began our conversation by diving into Pollen’s business model – understanding the challenges and opportunities of a B2B model versus a B2C model, dissecting the key value proposition and the key stakeholders’ relationships of social commerce, highlighting the difference between social commerce and multi-level marketing. Lastly, we discussed the competitive landscape of social commerce and how Pollen positions itself among the competitors.

Key highlights from our conversation

Direct to consumer brands and social commerce go hand in hand A lot of famous direct to consumer brands became popular due to social media so what social commerce does for D2C brands now is to enable them to go one step further from engaging their community through contents to turning them into resellers for the brands.

Key difference between multi-level marketing and social commerce Multi-level marketing is focused on the recruitment of other agents where the bulk of the income comes from instead of selling for the brand while social commerce focuses on selling for the brand by attracting people who can build personal relationships with the buyers.

The key value proposition for social commerce is centred around the hypothesis that “I am more likely to buy it from someone I trust as opposed to buy it from someone whom I don't know or by seeing a brand’s advertisement”. There are three key stakeholders at the heart of social commerce – the brand or supplier, the resellers and end consumers.

Casual sellers make up the bulk of the reseller network 75% of the community piloted at Pollen is made up of casual sellers who are potential buyers too while the remaining 25% of the community are hardcore sellers who see social commerce as a way a main income generating engine.

Non-commodity type products are more suitable for social commerce such as fashion, beauty, food, wellness, lifestyle because purchasing decisions for such products depend on a multitude of factors beyond pure functionality and price alone.

Content at a glance with time-code

(01.26) David’s background story and the journey to founding Pollen (03.22) Snapshot of Pollen’s business model (05.09) Direct to consumer brands and social commerce go hand in hand (07.43) Difference between social commerce and multilevel marketing (11.46) Casual sellers vs hardcore sellers (13.36) The B2C element of social commerce (16.04) What types of products work best for social commerce (20.05) B2B vs B2C social commerce business models (32.20) Unicorn discussion: the fine balance between profitability and valuation

Episode linksPollen: https://www.pollen.store/ Jumper AI: https://jumper.ai/

Key highlights from our conversation

Content at a glance with time-code

Episode linksPollen: https://www.pollen.store/ Jumper AI: https://jumper.ai/

Previous Episode

[Expert Talk] The business of fashion and retail with Stefaan Le Clair from Berenike Global Fashion Management (Part 2 of 2)

This episode is part two of our industry talk on fashion and retail. And it follows on from our discussion in the previous episode released two weeks ago. In this episode, we looked at the rise of Direct to Consumer brands, and how technology contributed to this trend; the truth surrounding online and offline retail, the challenges faced by department store and then circling back to considerations of franchising and licensing which were first introduced in the last episode. Finally, we conclude our discussion by zooming out to a more general discussion on overall industry trends.

Our expert guest is Stefaan Le Clair, the Managing Director of Berenike Global Fashion Management. Stefaan’s past industry experiences include being the VP of Retail Europe at Espirit Group, the CEO of denim brand Lee Cooper, the General Manager of Hudson’s Bay Benelux which is also the parent company of Saks Fifth Avenue, the CEO of Galerie INNO which is a department store chain in Belgium.

Key highlights from our conversation

Direct-to-consumer brands: do-it-all Vs excel-at-allDirect to consumer brands have the ability to communicate directly to end consumers instead via third parties thus it is easier to maintain distinct brand entity. However, when it comes to distribution channels, it is rare to see brands who do-it-all become a specialist in all the channels. So, brands have to strike a fine balance between do-it-all but not excel at all aspects and outsource certain elements to more experienced partners.

Online and offline are doomed to be married forever The cliché discussion of “is offline going to die in favour of online?” or “is online going to die because of lack of profitability?” is unlikely to yield useful conclusions. What is more important is the wishes of consumers which depend very much on the type of product and the emphasis on convenience.

Certain products such as mid-level premium luxury brands and lingerie work better in offline settings with the involvement of salesperson while for certain product categories, online offer the opportunity of wider product assortment which is difficult to achieve offline. So, it is important for brands and retails to be present in an omni-channel environment with a blend of online and offline channels.

The key to the future of department store is social Department store is a complex business with very huge surfaces and wide selection of product categories. It has a negative reputation today because it has never changed. The future of department store rests on its ability to recreate the social element of being a gathering place for people, working place, eating place or even a sleeping place – a place where people come to experience something, to have an “event” feeling at certain moments. Successful examples of ILLUM and Selfridges are highlighted.

Licensing and franchising remain a viable business model It is important to recognise that it is difficult to excel in all aspects of the business. It can be beneficial to find a partner with complementary skillsets. This is especially true for geographical expansion where local network and expertise are crucial. As a brand owner, one needs to ensure that you have a good contract in place to guard and police your brand DNA.

How technology helps fashion and retail companies The first major role technology plays in advancing fashion and retail companies is on consumer data and insights. The second role it plays is in helping businesses to become more agile and flexible so to respond to ever changing consumer demands. These two roles are most critical when evaluation the usefulness of a technology to fashion and retail brands.

Top 3 sub-segments with high growth potentials are highlightedTravel retail is the fastest growing sub-segment before Covid-19; however, its development post Covid-19 remains unclear. Sustainability related sub-segment remains popular due to the rising environmental concerns worldwide. And hospitality is going through disruptive changes driven by the search of unique experiences.

Should we be worried of unprofitable retail unicorns? The drive to provide consumers with a 360-degree experience can stand in the way of profitability in the short-term. However, in the long term, the combination of the right leadership and the right vision together with technology can help to fight a profitable battle just like what we observed in the case of Amazon.

Content at a glance with time-code

(01.34) The rise of Direct to Consumer brands (05.02) Online vs offline retailing channels: convenience factor, type of products (15.13) Are department stores dead? What changes do they need to implement to survive in the future? (22.39) Licensing and franchising as a business model to grow (28.28) Technology trends or applications in fashion and retail (33.13) High growth sub-segments within fashion and retail are highlighted - travel and sustai...

Next Episode

[Expert Talk] The importance of a well-functioning healthcare system with Yemisi Ajumobi from the World Bank

Today’s guest is Yemisi, an epidemiologist specialising in infectious disease at the World Bank. We began our conversation by giving an overview of the virus causing Covid-19, what we knew and what remains to be learnt; we discussed the intricate balance between country priorities and global coordination needed to prevent and respond to a global pandemics like Covid-19; the six building blocks of a well-functioning healthcare system, and the progress made on the global coordination efforts on vaccination and lastly the one thing that we hope governments around the world can learn from the current crisis.

Key highlights from our conversation

Corona viruses are very common in animals. Research has currently estimated that there are over 1,100 Corona viruses that currently exist in animals. Specifically, with regards to human coronaviruses, these were first identified in the 1960s. And to date, there are about seven corona viruses that can infect humans, which have been identified.

The risk of pandemics has been reported to be increasing in the recent decades. Some of the reasons for these increases has been the large rates of urbanization and industrialization, which has led to the disruption of ecosystem humans coming in close contact with wildlife habitat.

The WHO health systems framework encompasses six building blocks 1) service delivery 2) health workforce 3) health information systems 4) access to essential medicines 5) financing 6) leadership / governance.

International Health Regulation 2005 is a legally binding document that countries follow to ensure that they're improving their core public health capacities to be able to adequately prepare, detect, and respond to infectious disease outbreaks.

Healthcare is typically on the funder, and a big part of what has occurred is that there is more reactivity as opposed to proactivity; it means that it's when a crisis has emerged, is when there's a lot of focus on reacting to the crisis, instead of using a wider lens of thinking through how we can be more proactive at preventing and averting crisis.

Content at a glance with time-code

(01.38) Yemisi’s background story
(05.00) What we know about Covid-19 and what remains to be learnt
(09.03) Epidemics and pandemics defined
(10.05) Urbanization and industrialisation resulted in increased risks of pandemics in recent decades
(12.07) The delicate balance between country priorities and global coordination
(20.52) What it takes to shift from reactive to proactive mindset
(22.18) The development and global coordination efforts around vaccination
(25.38) The one thing that we should learn from the current crisis

Episode links
WHO Health Systems Framework: https://www.who.int/healthinfo/systems/WHO_MBHSS_2010_full_web.pdf

International Health Regulation 2005: https://www.who.int/ihr/publications/9789241596664/en/