500 Startups invests in UAE gifting marketplace
UAE-based gift-giving platform Joi has recieved investment from 500 Startups.
With this first round founders Ritesh Tilani and Alper Celen hope to augment traditional brick and mortar channels with their ambitious plan to become the region’s ultimate online gifting platform, for both individuals and corporates.
Hasan Haider, venture partner at 500 Startups says that Joi (pronounced joy) is in a league of its own. “No one in the region has truly taken on the challenge of disrupting the online gift and flowers market. It’s an ambitious proposition, yet a highly rewarding one, and we like to take risks.”
While the amount is undisclosed, Haider confirmed that 500’s investment was sourced from their global fund and from the $30 million valued 500 Falcons fund launched late last year, from which typical individual investments range between $50,000 to $100,000.
As a subsidiary of their holding company Enhance, where they develop online and mobile-enabled businesses in Middle East and Africa, the pair are looking to disrupt the online gifts sector with their on-demand and “experiential” platform.
Say it with flowers
Surprised to discover how underdeveloped the online space was for flowers Celen told Wamda that their research had found that in 2014 the GCC flower market in 2014 was valued at over $380 million, with over $150 million expected in future growth.
“Dubai, by virtue of its logistics infrastructure, is a major global flower hub, when you consider how much flowers are part and parcel of gifting culture here,” said Celen.
The cofounders also believe that the region’s growing youth population, with a penchant for online and mobile-heavy consumer behavior, represents a plum opportunity. According to 2015 Retail Trends Report from Strategy& since 2000, nearly 75 percent of retail sales growth has occurred through online channels, which now accounts for about 8 percent of total retail sales.
Celen told Wamda that despite these positive numbers there is still a dearth of “these ‘life-enhancing’ services executed effectively online. They may exist offline but haven’t necessarily seamlessly switched to the online realm.”
According to the pair the reason Joi came about was because they saw no clear market leader in gift and flower marketplaces. With gifts there are bigger margins when it comes to brick and mortar, plus a wider delivery window. For Joi grouping many orders makes the online gifts sector more commercially viable.
Keen to work with offline vendors they are currently working with Jones the Grocer, who until now had never ventured into online delivery.
Joi is not alone in the UAE though. In 2013, HoneyBee Tech Ventures invested in Yougotagift.com, then you’ve also got sites including Giftsnideas.com, Giftshabibi.com and Injoygiving.com.
And when it comes to the flowers, there is competition also with sites like Theflowerstore.ae, Theflowershop.ae, 800flower.ae, and Kuwait’s recently acquired Q8flowers.
They duo bring significant experience to their venture though. Celen counts Saudi daily deals website Fursaty, Foodonclick Saudi and transportation app MondoRide as part of his successful investments while Tilani was the former head of UAE for iMENA Group and his last mobile enterprise CareZone, was awarded Best New Business Middle East in 2011, though he eventually closed the venture citing “its social-impact driven model was ahead of its time.”
How they work
Despite this healthy competition in the gift-giving market, Tilani says they have a USP.
Delivery can be same-day, from their ‘agents of joi’ and include a singing telegram or with a ‘joicam’ which contains a secure, private audio or video message which the recipient can respond to with a message of their own - all elements that the cofounders believe capture the emotional aspect of gift-giving, often now a very transactional process.
By making digital gifting more immersive, experiential and ‘joi-ful’, Celen and Tilani believe they will gain the traction it needs to eventually become a household name.
The platform also offers the opportunity for non-traditional retailers to access a wider market. “We’ve brought on board exclusive and specially-curated items from homegrown vendors like Ripe market and Brownie Blues,” Tilani told Wamda. Wanting to work with independent retailers they are also working with corporates like Majid Al Futtaim to offer special discounts to all Najm card holders, and is in late-stage discussions with one of the region’s largest hospital systems to deliver birthday gifts to their thousands of employees throughout the year.
Having recently launched their iOS app, with the Android app on the way, they are now live in Dubai, Abu Dhabi, Sharjah and Riyadh, with Jeddah soon to follow.
“We’re not competing with brick and mortar flower shops, chocolatiers and gift stores,” he told Wamda, adding “instead, we are looking to collaborate with them, to boost their order pipeline by introducing them to new users and growing their brand awareness.”