In the coming years, the e-commerce sector is set for dynamic growth. This is evident from a recent report published by Forbes Advisor. Analysts project that by the end of 2024, 20.1% of retail purchases will occur online, and e-commerce sales will grow by 8.8%. By 2027, 23% of purchases will be made online, with the e-commerce market reaching a value of $7.9 trillion.
Experts note that now is an excellent time to develop in e-commerce, as there are no signs of market slowdown. Competition in the e-commerce space will intensify among existing players and new companies planning to enter. The companies that will gain significant advantages are those that quickly adapt to change, leverage modern technologies, and apply proven best practices in the market.
We asked Tatiana Kashina, Head of Supply at Whizz, to share examples of successful solutions. Over the years, she has contributed significantly to the growth of two other startups: with her help, the turnover of the elite real estate online agency Enso in Moscow grew to $100 million in GMV per year in five years, and later, she managed to bring Canada's first fast grocery delivery service, Tiggy, to positive contribution margin within a single location in just eight months.
Based on Tatiana's experience, here's how to structure your product and company development efforts to ensure your project truly succeeds.
Clearly Identify and Meet Audience Needs
Both Enso and Tiggy pioneered their respective markets. Before Enso, there were no online agencies addressing the search and purchase of countryside homes in Moscow's real estate market. Luxury countryside real estate listings were mainly published offline, leaving property owners and potential buyers unable to connect for months.
Meanwhile, Tiggy was a breakthrough in the Canadian grocery delivery market. Before its arrival, orders were delivered only the next day. Despite Tiggy being a promising product, with a model proven successful in other markets, investors and suppliers were initially cautious. Eventually, the team gained trust, and the service quickly became popular. The number of regular, active customers using the mobile app in Vancouver and Toronto reached 25,000.
When Tatiana joined Whizz, the company already had a solid reputation for offering popular electric bike rental services in the U.S. However, with feedback from couriers, she was able to enhance the existing model. Specifically, battery capacity was increased, allowing couriers to use bikes for a full workday without needing to recharge. As a result, the number of Whizz rental users grew.
Set KPI Targets for Rejections
While developing Tiggy, Tatiana often had to tackle seemingly impossible tasks convincing investors that a foreign remote team could successfully launch a startup in Canada and finding suppliers willing to believe in a company with a new business model.
"Startups often encounter numerous rejections early on. However, it's essential not to give up and keep striving to reach your goal. I even had a KPI based on rejections. I knew that after hearing 'no' one hundred times, I would eventually hear 'yes'," Tatiana shared.
In 2021, using this approach, Tatiana managed to provide Vancouver residents with COVID-19 tests, which were unavailable in local pharmacies at the time. To arrange for the delivery of tests to Tiggy's dark stores, she contacted numerous known suppliers. Receiving many rejections, she didn't give up and began searching LinkedIn for people connected to the pharmaceutical industry. Eventually, one contact proved valuable.
"As a result, we became the only provider with COVID-19 tests available in Vancouver. Our online COVID-19 test ads attracted new customers. Many were impressed by our product selection and service, staying with us long-term. Consequently, the company's annual revenue doubled from $2.5 million to $5 million," says Tatiana.
Adapt the Product to Local Specifics
In Vancouver, Tiggy opened dark stores in different neighborhoods, each with unique cultural traits. By considering these when forming the product lineup, Tatiana's team kept sales high:
"There were many examples showing the importance of catering to the preferences of different neighborhoods. For instance, a particular milk brand sold poorly in one area, while organic-labeled products were in high demand. This was a premium area where people valued quality. The milk in question was mid-priced. I gained many insights from our category manager, who was born and raised in Canada. Hiring staff familiar with the local market proved to be the right decision."
Tiggy's competitive advantage was its offering of products from smaller local brands. According to Tatiana, Canadians take pride in local producers, often ordering local goods from Tiggy that weren't available in larger retail chains.
"We provided small brands an opportunity to quickly enter the market and test their products on our platform. Sometimes we even gave out samples from local producers with orders, which was well-received. This became our trademark. Everyone knew that aside from higly known consumer brands, we offered local craft products, which often led to orders."
Digitize Processes
Tatiana's experience shows that digitization not only saves time for project teams but also enhances product value and offers a competitive edge. Enso, for example, became a convenient service for potential buyers while simplifying real estate agents' work. Previously, agents spent significant time sourcing and verifying listings. The new service enabled them to work faster and more efficiently.
"A company in Moscow had previously attempted to develop an online real estate agency, scraping listings from various sources, but relied on freelancers for manual verification. We trained our own neural network to update our database daily, saving time and financial resources and showing buyers and agents only up-to-date listings," Tatiana noted.
Another example of how digitization boosts startup efficiency is Tiggy's dark stores. Tatiana's team developed a neural network to track stock levels and generate daily order lists for specific suppliers and locations. With Tiggy's catalog of 2,500 items, this saved employees substantial time and effort and reduced the risk of items being out of stock.
Refine Negotiation Skills
At Tiggy, Tatiana worked closely with suppliers to ensure the service always stocked the best and most in-demand products. At Whizz, she now oversees the timely delivery of all essential e-bike components. Since Whizz's suppliers are in Asia, Tatiana adapted her negotiation strategies to suit these cultures.
Negotiation skills can help navigate challenging situations with minimal losses. For example, when import tariffs on e-bikes and parts to the U.S. were raised, there was a risk that Whizz bikes' prices would increase by 25%.
"Our challenge was to maintain minimal pricing without compromising quality. Changing suppliers could harm our reputation and disrupt production cycles. In the end, I convinced our partners to compromise and split the costs," Tatiana noted.
Promote Holistically
Tatiana believes Enso's success was due largely to measurable tools. With targeted ads on various online platforms, the team accessed end-to-end analytics, enabling them to evaluate investment efficiency, assess customer acquisition channels, and reach specific audience segments effectively.
Tatiana stresses that e-commerce companies can become overly reliant on paid traffic. "Significant resources can be invested in targeted campaigns, but eventually, customer acquisition channels are exhausted. Companies focusing only on paid online traffic achieve short-term success. For sustained growth and customer interest, it's essential to work comprehensively on branding, engage in storytelling, and exceed customers' expectations."
