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A former Snap exec has launched an online marketplace to compete with Amazon (SNAP, AMZN)
This is an excerpt from a story delivered exclusively to Business Insider Intelligence E-Commerce Briefing subscribers.
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Former Snap Chief Strategy Officer Imran Khan has introduced Verishop , an online marketplace that bills itself as "an e-commerce platform that combines quality curation and discovery with the convenience you've come to expect."
Share of Physical Gross Merchandise Sales on Amazon
Business Insider Intelligence
The startup raised $17.5 million this past November and launched with approximately 150 brands on its marketplace, according to Business Insider.
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Here's what it means: Verishop is trying to compete with Amazon and its leading e-commerce position using four key factors.
- The marketplace focuses on categories that Amazon doesn't control.It offers fashion, beauty, and home products, and Amazon doesn't dominate high-end apparel and beauty sales the way it does overall e-commerce, though it has been growing its capabilities in the categories and performs well in apparel and beauty overall. By zeroing in on those segments, Verishop can offer products Amazon doesn't and avoid competing head-to-head with it and its ability to offer low prices.
- Verishop has spurned third-party sellers in favor of verified brands.To avoid issues with counterfeits and unverified sellers, Verishop is buying products wholesale and reselling them on its marketplace. This separates Verishop from the likes of Amazon and Walmart and could build consumers' confidence in shopping with it, its prestige, and its appeal to brands.
- It heavily features influencers and editorial content.It has a page dedicated to "Tastemakers" that currently features seven influencers with millions of followers across platforms; each influencer has chosen products from the marketplace and added brief notes about them. The site also has an editorial team, and prominent content from them and the influencers can help drive product discovery and interest in the marketplace, especially given influencers' ability to drive sales.
- Verishop offers free two-day shipping on all orders and free returns . These services allow Verishop to offer speed and convenience that's comparable to competitors like Amazon and Walmart. It provides free two-day shipping with no order minimum, which Walmart doesn't offer at all and Target and Amazon offer only to shoppers with a REDcard or Prime subscription, respectively, making it an attractive offer.
The bigger picture: Verishop's ability to recruit brands and build out its product selection will make or break its future.
Amazon's wide variety of products is a major part of its success, and third-party sellers make up much of its selection but Verishop won't host those merchants, potentially hurting its appeal.If consumers can't be sure they'll find what they want on Verishop, they may shop elsewhere, so the marketplace needs to add as many brands as possible to avoid this problem. Its positioning as an ad- and counterfeit-free marketplace may build its prestige and attract brands, which could help in this process, and it already plans to have over 300 brands by the end of the year, per Axios.
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