This Chinese VC moved to Bengaluru to co-found an e-com startup that hopes to be India’s Taobao

Martin Tan's ForeverShop was born with the objective of enabling small businesses to use online marketplaces effectively.

Mobile phone and home appliance manufacturers, FMCG companies, and fashion brands are making the most of the e-commerce boom in India, but what about the home-based cupcake business next door or the plant nursery down the road?

Most e-commerce marketplaces in India focus on bigger brands and sellers, and it is difficult for small/individual-run businesses to leverage these marketplaces because of the higher commission, logistics, and advertising costs involved.

While mobile commerce in India is dominated by these bigger brands and sellers, in China it is the small businesses that lead in the mobile commerce market. As of June 2016, Taobao, Alibaba’s consumer-to-consumer (C2C) marketplace for small and individual businesses, had 369 million monthly active users (MAU) and 150 million daily active users (DAU). There were over one billion product listings on the app.

Martin Tan (Chinese name—Tan Jun), who used to work at 91maker, a leading seed fund/incubator in Beijing, visited India from July to October 2016 to understand more about the country, especially the mobile commerce ecosystem.

He saw the similarities between the Indian and Chinese mobile markets and was convinced that India’s mobile commerce landscape would be as big as China’s in the coming years, not only on the B2C/B2B e-commerce side but also in the C2C model, where the number of small/individual sellers will increase dramatically and play a key role.

While in India, he met Shathyan Raja, who was helping small businesses sell their products online. Shathyan had his first stint with e-commerce during his college days when he started an online furniture sales and rent website. ForeverShop was born with the founders’ objective of enabling small businesses to use online marketplaces effectively.

With work on the product and business having started in November 2016, ForeverShop officially launched on June 10 this year with around 1,000 sellers on board and Hindi and English versions of the app.

The 20-people-strong startup has a development team based in China, while the operations team is based in Bengaluru.

Giving pop & mom businesses online presence

The free-to-use app lets businesses create online shops with customised features—logo, cover, name, and shop description. Sellers can upload an unlimited number of products and categorise them. The most important feature, according to the team, is the ability to promote products on various social media channels like Facebook, WhatsApp, and Instagram without having to post in individual groups, which can be time-consuming. The app also offers payment and order-management tools.

Seed investment of $300,000 from China

ForeverShop has raised a seed round of $300,000 from 91maker. The money will be used for product development, expanding seller base in tier-2 and tier-3 cities, and adding more logistics and payment services on the app. Going ahead, ForeverShop wants to add more functionality to the app to help sellers source cheaper products/suppliers from India and China. Also in the pipeline are more marketing tools, partnerships with delivery companies, and using big data to give consumer and market insights to sellers.

C2C space in India

While the used/reseller space has been catered to by the likes of OLX and Quikr, the only major development in the small/individual-owned business space was the acquisition of Sequoia-backed Shopo by Snapdeal and a subsequent $100 million investment into it.

This February, Snapdeal shut Shopo to cut costs. “We started a year and a half ago from a small conference room with our mission to enable small and individual sellers across India to sell online. In this short time, we have together discovered the dynamism and vibrancy in the C2C space in India. However, we realise that it will take some more years for a broader ecosystem to develop around the C2C segment,” Shopo had said in a blog post.

Unlike China, the C2C space in India is nascent, and given the role small businesses play in the Indian economy, the prospect of growth is strong.