The e-commerce market is widely regarded as one of the most promising sectors for business development. With global internet access rapidly expanding and over 5 billion internet users today, the number of people making online purchases is continually rising. According to Statista, retail e-commerce sales are projected to exceed $6.3 trillion by the end of 2024, with forecasts indicating continued growth.
Every year, countless e-commerce startups are launched around the world, with some reaching billion-dollar valuations. China and the United States are the frontrunners in producing successful startups in this sector. By the end of 2022, these two markets were the only ones globally to host e-commerce decacorns—startups valued at over $10 billion.
In today's landscape, the experience of successfully launching e-commerce startups is invaluable. Tatiana Kashina, Head of Supply at Whizz, shared her insights on this journey. She began her e-commerce career as a student and, over the past few years, has held leadership positions that have played a significant part in the growth of three rapidly expanding startups.
Tatiana, your career began with the Enso project, where you helped the founders establish an online real estate agency specializing in luxury countryside properties in Moscow. What inspired this project?
I met the company's founders at university in the late 2010s, a time when online marketplaces were booming and trust in digital payments was growing. Together, we experimented with selling various products online—purchasing small batches of goods from China, creating landing pages, and running targeted ads. It turned out to be quite successful for us.
At one point, we considered adapting our model to other industries with higher average order value, like real estate. While there were existing services for finding apartments for purchase or rent, we noticed a gap: there wasn't a specialized platform for those interested in buying premium countryside homes.
Did you know from the start that the service would be in demand?
Yes, we recognized that the luxury countryside real estate market in the Moscow region was quite conservative at the time. Sales ads primarily relied on out-of-home and print advertising, as well as word-of-mouth. This offline advertising approach only reached a limited audience, making it challenging to assess its effectiveness and justify the advertising budget.
We decided to leverage online advertising and end-to-end analytics, allowing us to track every dollar spent and monitor campaign effectiveness.
We also realized that many buyers of countryside homes found dealing with real estate agents inconvenient and encountered unclear pricing. To address this, we developed a user-friendly service similar to Tinder, allowing users to "like" or "dislike" properties, sign up for viewings with a single click, and receive new offers in real time.
We digitized the entire process of selecting townhouses and cottages, leaving real estate agents to focus only on the final stage—showing the properties to clients. Agents using our service gained access to a personal account and an automated system that quickly matched the right properties to each client, significantly saving time.
As the Product Director at Enso, you and your team played a key role in growing the company's annual turnover to $100 million. How did you achieve that?
I focused on organizing the development team to consistently exceed customer expectations.
First, we used targeted advertising to effectively reach a large audience interested in our property listings.
Second, we developed an exceptional digital product that we continuously improved. Clients found their personal accounts were nearly magical: they could track their favorite properties in one place and receive recommendations tailored to their interests.
Finally, we utilized machine learning to gather market data, allowing us to quickly learn about price changes, property sales, and more. This meant clients could rely on us for the most comprehensive and reliable information about properties.
After Enso, you shifted to developing Canada's first fast grocery delivery service, Tiggy. Given that this is a completely different market in terms of products and geography, what motivated you to take this on?
After a few years of running Enso, the founders and I realized that we had reached a growth ceiling. While the project was successful, the business model was constrained by the size of Moscow's luxury countryside real estate market—valued at around $7 billion at the time.
As the COVID-19 pandemic began, we observed the rapid growth of fast food delivery services like "Yandex.Lavka" and "Samokat." This inspired us to explore launching a similar project in a country where such services did not yet exist.
I remember conducting an analysis of markets and comparing key macro indicators. Ultimately, we chose Canada, which had a large $112 billion grocery market but no competitors in the fast delivery niche. At the time, the fastest grocery delivery in Canada took a full day.
Is it true that you managed to launch the project remotely? It sounds incredible.
Yes, that's true! For the first six months, the founders and I worked remotely due to challenges with obtaining Canadian work visas. During this time, we were also seeking investors for the project. Unfortunately, we faced many rejections because none of us had experience in Canada or in the grocery retail industry.
Nevertheless, we pressed forward. We remotely registered Tiggy Delivery Corp in Canada, which the law allows for open parentheses, and through contacts, found a Russian-speaking managing director. We began building a minimum viable product (MVP) to validate our model.
We partnered with a small grocery store in Vancouver that had a decent digital catalog on DoorDash. In less than a month, we scraped their catalog and, uploaded the product information to our site and agreed with them to deliver from their store. Through social media, I found our first two couriers. In the first month, we completed 50 deliveries, and Tiggy's popularity grew by the day. This success allowed us to engage in more meaningful negotiations with investors and suppliers.
Was it harder to find suppliers than employees?
In a way, yes. For the project to succeed, we needed popular, high-quality products. If customers are used to drinking Coca-Cola, they won't settle for substitutes.
To maintain competitive prices, we needed a major supplier, and negotiating with them was as difficult as finding investors. Although Canada is part of North America, the attitude toward startups differs from the United States. In America, startups are generally viewed positively, while in Canada, there is a greater sense of caution.
How did you solve this issue?
I compiled a list of all potential suppliers in Vancouver and prepared a tailored pitch deck for each of them. I then began calling and emailing every supplier, but unfortunately, most declined.
In the end, Sobeys, Canada's second-largest supermarket chain, believed in us. I convinced them to become our main supplier. Additionally, I identified smaller suppliers for various product categories and included local products from small brands—this became one of our unique features. The local brand category, which is often difficult to order for delivery, quickly became a favorite among our customers.
Before your team, no one in Canada delivered groceries in 15 minutes. How did you set up the logistics to achieve this?
To ensure fast delivery, we established dark store locations in various Vancouver neighborhoods. These were small warehouse spaces in out-of-the-way areas with basic interiors, accessible only to us, our couriers, and suppliers. Customers didn't have access to these dark stores.
Given the limited space, I had to solve another crucial task—organizing logistics so that all the necessary products were always in stock. Initially, my team and I managed this with Google Sheets. However, as we scaled and handled 2,500 SKUs, manual management became impractical. Fortunately, we had a strong analytics department and valuable experience from our previous real estate project, which allowed me to implement a system for ordering products based on forecasting.
We developed a neural network that considered several factors:
- Consumer preferences on specific days of the week
- The dark store's capacity for different product types
- Product expiration dates
- Average sales volume
- Supplier schedules
Thanks to this solution, our buyers received an automated list every morning detailing which products that needed to be ordered from specific suppliers. They could then adjust the list based on their experience before placing the orders. This streamlined process significantly improved the efficiency of our ten warehouses in Vancouver and Toronto.
It's remarkable that you made the project profitable just eight months after launch, especially since it often takes companies several years. What's your secret?
The entire company worked towards this goal, but I believe much of our success came from optimizing procurement. This step ensured customers received the products they needed on time while minimizing "fresh" waste—such as fruits, vegetables, and bakery and dairy products.
We also improved order fulfillment speed by implementing a few critical strategies. For instance, we created a product catalog with detailed descriptions and high-quality images. In the warehouses, we adopted an address-based storage system, allowing pickers to easily identify the appearance and location of each product. This process enabled them to fulfill orders quickly and with minimal errors, ensuring customers received their deliveries in just 15 minutes. Trust in our service grew, and the volume of orders increased.
You're now part of another successful startup—Whizz. Has your experience been beneficial to this role?
Absolutely. At Tiggy, I learned how delivery speed affects a company's efficiency and revenue. I also saw how important it was to provide couriers with comfortable, reliable transportation for quick deliveries. When I joined Whizz, I brought valuable insights into the types of bikes that delivery companies needed, which I was able to apply while working with component suppliers and our production team.
At Whizz, I oversaw the creation of the new Storm-2 electric bike model, which is very popular among couriers in New York. We increased the battery capacity, implemented theft prevention features, and collaborated with our factory to develop a technology that reduces the risk of tire punctures—an essential consideration given the nails and broken glass on the roads.
Producing your own transportation models would be impossible without a well-established supplier system and logistics. Did you find it difficult to set this up?
It was an interesting challenge, especially since we source electric bike components from Asian countries. It's not just a language barrier; cultural differences also need to be taken into account to negotiate effectively with representatives from these countries.
Another challenge was the vast distance between our countries. We needed to ensure timely delivery of components to our production facilities, so I always factored in extra time when planning shipments. To ensure our cargo arrived intact, we and our Asian partners employed a few strategies. For example, we booked space on ships carrying goods for major corporations, which has proven to increase shipping reliability.
Recently, international media reported that Whizz raised $12 million in a Series A round from venture fund Leta Capital and UK-based Flashpoint VC. The company plans to use these funds to expand not only its bike fleet but also its mopeds. Is entering the moped market a new direction for the Whizz?
Yes, mopeds are a new direction for us. We decided to expand beyond electric bikes and create transportation options that would allow couriers to navigate the city even faster and more comfortably. Soon, mopeds will appear on the streets of New York.
As with the bikes, I was involved in developing the moped model, collaborating with our production team to define its key characteristics, and organizing component deliveries. I'm also handling the certification process so couriers could legally operate them in New York. Now that we've received the first test batch, I'm focused on ongoing organizational matters.
It's no secret that transitioning the idea of "I want to make a moped" to having it available for rent involves a lengthy process filled with bureaucratic complexities. How efficiently management interacts with authorities and regulatory bodies determines the success of individual projects and the startup as a whole. What advice would you offer to companies currently launching their e-commerce startups?
Online retail has a lower entry barrier compared to traditional retail, making it easier to test hypotheses and create MVPs. However, achieving success requires significant effort both during and after the launch.
First and foremost, it's essential to precisely define product-market fit. If your product resonates with the market, it can create new value and become indispensable to your audience. To stay on track and avoid wasting time, test your MVP before making further improvements.
Unlike traditional retail, where you have limited control over your audience, online retail allows you to segment customers and engage them through targeted advertising. While this presents opportunities, it also carries the risk of becoming overly dependent on paid traffic.
To ensure sustainable growth, you should diversify your audience engagement channels and build your brand. This approach will not only boost short-term sales but also foster long-term customer loyalty.
