Melltoo: Mobile marketplace with a cause
Rushika Bhatia
Case Studies

Melltoo: Mobile marketplace with a cause

Sharene Lee and Morrad Irsane are rewriting the rulebook on traditional classifieds with their much-acclaimed platform Melltoo.

The premise is simple: Melltoo, no-meetup classifieds, is a peer2peer marketplace for second-hand things. Individuals can buy and sell second-hand without the hassle of meetups. But, it’s only when you take a closer look that you realise that there’s more to the concept than meets the eye. As Sharene puts it: “Melltoo is the best way to unlock the value of things you no longer use, to save the planet by reselling and to give back to social causes through #Resell4aCause. It is our vision to contribute to responsible consumerism by helping make buying and selling second-hand products easy and enjoyable. In addition, our used stuff can be used to do good. We help charities transform in-kind donations into cash for social causes. People can list items they wish to resell for a cause, once sold, we collect and deliver the item and sale proceeds go directly to social causes selected by the seller.”

Sharene and Morrad fully understand that today companies can’t simply compete on existing technologies, they need to differentiate themselves in other ways. And, the duo is doing exactly that. What sets Melltoo apart is that it is focused on having a triple bottom line that contributes to environmental protection, social welfare and profits. “If your e-commerce offering is not highly differentiated, you will fail,” quips Sharene. “There is a generational shift in consumer sentiment that favours socially responsible businesses like ours. Gen X (practical and financially-conscious) are being replaced by millennials (aspirational and socially-conscious). This is a social change that has an economic impact. As a social enterprise, we are well-positioned to engage with consumers on this basis and this has changed our branding and communications strategy greatly.”

Masters of marketplace

The success of the platform is evident even as it is in its growth stage. Melltoo has hit $2 million in Gross Merchandise Volume (GMV) and has seen 35K transactions completed. On average, users are spending 18 minutes in-app per day. Revenue is doubling year-on-year. “Growth is primarily organic, through user word of mouth and referrals. What we are most concerned about is user satisfaction with their experiences; the rapid growth shows that users are happy,” remarks Sharene.

To amplify its growth, founders Morrad and Sharene are currently mostly focused on the team and product. “These are the two elements that determine customer satisfaction. So, we are focused on building and maintaining a healthy work culture and focused on improving the product based on customer feedback. As a tech company, our product and service are constantly evolving. We continually work on rolling out new features and optimising existing ones. We are not only focused on productivity, but we are much more concerned with continually improving the customer experience. And again, because we are in close contact with our customers through our platform, we let the customer take the lead in our product development. Ultimately, if you put customers first, customers will put you first,” she adds.

Perhaps it is this focus on customer experience or the company’s ability to efficiently execute its vision that has helped it bypass conventional e-commerce players and attract the attention of leading investors. Having successfully closed a round of funding in December 2016, it is now eyeing its Series A funding in March 2018. Reflecting on all the effort it has taken to get this far, Sharene shares: “It’s a long game. Start building your networks from Day One. Don’t expect investors to invest at the first meeting, you need to build relationships and credibility over time. Don’t wait for investors to invest, before building your product. Today, unless your product requires a lot of R&D and hardware, no investors will give you money to build software. Work on your business and keep growing it while simultaneously cultivating relationships with investors. If you absolutely need some seed funding to start, seek out incubators and friends and families.”

Taking on the challenges of growth

Naturally, with rapid growth comes a raft of operational challenges and Melltoo has dealt with a long list of them since its inception. Building and maintaining long-term relationships has been on top of the list explains Sharene. “Unlike traditional e-commerce, we are asset-light in that we don’t have inventory and we don’t have our own logistics fleet. Having said that, our biggest operational challenge is managing relationships with buyers, sellers and logistics companies. That means getting and providing timely and accurate information so all parties can fulfil their role with minimal friction. The greatest difficulty here is obtaining and dispatching timely information. When information is not efficiently communicated, delays occur and there is friction as well as customer dissatisfaction. For instance, if a seller changes location and fails to inform us, the courier will make a wasted trip and the pickup will be delayed. Or if the courier fails to inform us of the reason why a pickup or delivery failed, then we do not know to contact the user to rectify the problem. Any delays in collecting and delivering orders impact the user experience and overall customer satisfaction.”

To get around this, Sharene and her team are roping in all stakeholders (buyers, sellers, couriers) to ensure that everyone understands their role. She outlines her strategy: “Sellers need to get their items ready for collection and provide us with accurate location info. Couriers need to respect seller availability and call ahead of time. Buyers need to be ready to receive their items and provide us with accurate location info as well. Fortunately, these are issues we can rectify with more intelligent software, UI/UX and good onboarding for all parties. A lot more software automation can take place to improve operations and reduce human labour and error.”

The mobile-first, social sharing future

As for the future, the entrepreneurial duo has plans for expansion into Egypt in Q1 2018 and into KSA in Q2 2018. Sharene is also optimistic about where the industry is headed when she says: “It’s exciting times for e-commerce start-ups. Participatory e-commerce is superseding traditional e-commerce. Consumers don’t just want to buy stuff online anymore, they want to engage with e-commerce platforms to shape their shopping experiences. Pure play e-commerce will be absorbed into Omni-channel retail as all offline retailers will inevitably come online while online players will go offline. Peer2peer marketplaces like ours will become dominant in the online space because consumers are active participants on the platform. They are not simply buying what is being shown to them, but are actively shaping the types of inventory available and customising their experience in the marketplace.”