ECA columnist and Retail Insider founder Glynn Davis meets Tony Preedy, managing director of international ecommerce marketplace Fruugo…
Can you tell us a little about Fruugo?
Fruugo is a highly diversified ecommerce marketplace that currently operates in more than 40 countries. We sit directly between retailers and customers, with our main mission being to help retailers expand their business, both locally and on an international scale. By joining Fruugo, sellers can market their products to a global audience that is continuously growing, with our platform seeing 460 million visits in 2022.
What were the key drivers for creating the business – was there an opening in the market?
The marketplace was originally founded in 2006 by Finnish technology entrepreneurs who saw an opportunity to build a platform with significant international potential. Back then, the online world was rapidly expanding – social media was on the rise, and retail giants like Apple were continuously advancing their technology. To ensure they took advantage of the new digital age, they heavily invested in the technology and intellectual property to build the e-commerce platform.
It’s a very competitive market so what would you say are your USPs?
Our USP comes from our specialism in cross-border commerce. We reduce the complexities of cross-border selling by using proprietary technology to offer a fully-integrated, localised solution for retailers and shoppers around the world. We provide simple product translation, currency conversion, local sales tax management and local marketing for all our sellers, as well as offering multiple payment methods that cater to specific market audiences.
We also minimise the risk to retailers starting on their e-commerce journey as they only incur a fee when we generate sales for them. So, if sales are not performing as expected, they don’t need to worry about additional expenses which may affect their profitability. Once a sale is made, sellers always receive funds in their own currency regardless of which one was used by the shopper, with Fruugo covering any foreign exchange risk.
Are you particularly strong in certain regions/categories?
Fruugo currently serves retailers in 36 countries, finding customers for them in over 40 countries. The technology can be used for virtually any product category. We often say, “if you can ship it, we can sell it!” So long as products are well described and competitively priced, the Fruugo technology can find shoppers for those items. That said, the most popular types of products on the marketplace are fashion and footwear, health & beauty, home & garden and jewellery.
Fruugo is particularly strong in Europe where its simplification of the various languages, currencies and local sales tax rates is very attractive to retailers looking to sell within and to customers in the region. For British retailers operating in a post-Brexit world, Fruugo makes selling to Europe simple.
What type of customers and retailers do you attract and how do you attract them?
As with all businesses, we have built a group of loyal customers since first launching the marketplace, which we hope will grow as the platform expands in the coming years. However, the huge shift to digitalisation in the retail sector has transformed the way consumers approach their shopping experience. The easy access to a global market has led to an agnostic shopping approach, whereby customers focus less on brand loyalty and more on price, availability and speed, hoping to find specific solutions to a need they want to fulfil as quickly as possible.
As a marketplace, we offer a one-stop-shop experience with a wide offering of products. We are easily accessible and visible via search engines, so attract new customers from there. Retailers benefit from more eyes on their product without needing to spend big on marketing.
What have been the major challenges for the company?
One of the biggest challenges was actually getting sellers and partners on board – they weren’t convinced that a single global platform for online shopping would be feasible. Eleven years on, we can safely say it was a challenge we overcame. Recently, the challenge has been keeping up with the massive demand for our services. We’ve had to run hard to scale up both the size of our team and technical capacity.
Can you share some key numbers – sales, repeat customer numbers, products listed – and any bestsellers?
Fruugo has grown its revenue 10-fold in the period 2018 to 2022, with the business achieving revenue of £65 million in 2022, a 110% growth on the prior year. The total value of shopping on the platform for our most recent fiscal year was £255 million, increasing by 87% from 2021. That’s the orders we captured from shoppers and passed to retailers, 96% of which were from shoppers in a different country to the retailer, and 83% of which was where the shopper purchased in a different currency to that which Fruugo paid to the retailer.
We also saw a huge increase in the number of shoppers buying through Fruugo from around the world, with just under seven million users in 2022, up by 114% on the previous year. The number of our sellers continues to grow, with over 3,000 retailers now on the marketplace, offering over 100 million products.
What are the major opportunities?
The pandemic accelerated the growth of e-commerce, and whilst many predicted this to slow down, we have actually seen the opposite – our growth continues to be supported by accelerating global shifts towards online shopping. The simplicity of cross-border commerce and the opportunity for retailers to cost-effectively reach an international audience has led to the rapid growth in marketplace selling, especially when platforms like ours remove any barriers of international selling through our advanced technology offering.
Marketplaces are easily adaptable to changing consumer habits. We predict to see a continuous growth in the proportion of international shopper transactions over the coming years and believe marketplaces such as Fruugo will be at the very heart of them.
What are the future plans, tech investments?
We are currently investing several million pounds in expanding our technology capacity to support our growth. Fruugo’s proprietary technology is highly scalable; the platform can serve many, many thousands of retailers, so they in turn can reach billions of potential new customers around the world. During 2021, we examined options for an IPO process with the intention to float on the London Stock Exchange’s AIM market. Although we put that process on pause in autumn 2021, we look forward to resuming it when market conditions are favourable.