Elenas: halfway between dropshipping and social commerce
Miguel Nicolás
17/03/2022
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This eCommerce success story gives a lot to talk about: dropshipping, social commerce, entrepreneurship and even inclusiveness. That is Elenas.
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This eCommerce success story has a lot to talk about: dropshipping, social commerce, entrepreneurship and even development of communities and groups that need it. All this in the Latin American environment, which has some of its own characteristics in terms of e-commerce development and audience segmentation at a sociodemographic level.This is Elenas.Throughout this post we will see how an app can serve to boost e-commerce, while providing resources to some families without having to make a prior investment, so there is an important ethical component.
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What is Elenas?
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It is not so easy to find, at this point, a business model that surprises us. In Elenas, in fact, they have not invented anything; but they have done something that can be much more difficult: find the insight and meet a need.In the formal aspect and in terms of mechanics, it does not differ too much from what is traditional catalog sales, but taken to the digital environment. It is not difficult to remember those cold-door saleswomen selling products such as AVON cosmetics.The idea is to have a huge sales network, as large as possible, and these people are the ones who act as salespeople for a catalog that Elenas makes available to them. The nuance is important: Elenas' products are sold, not the saleswomen's own products.Once sales are closed, orders are managed on the platform, and they are processed, shipped, charged and paid to their agents.
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INSIGHT: One of the breaks to entrepreneurship is, logically, the initial investment. In this model, what we achieve is to incentivize sellers with a solution that only involves closing contacts. There are practically no associated costs.
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Elenas: a dynamic project
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We can say that it is, and on several different levels. The first thing to note is that it has helped drive e-commerce in Latin America.As in all regions, 2020 was a year in which e-commerce took a huge leap forward. LATAM was no exception; in fact, the increase in sales from this channel is especially noteworthy. What happens is that it came from a penetration also much lower, so it is still far from other areas (in fact, its volume was only higher than that of Africa, according to this study).
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Historically, Latin America has been skeptical of online sales. It is not only a cultural issue: it is also related to the level of development of the Internet and the tendency of some regions to the underground or informal economy. Business models outside institutions.
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INSIGHT: Taking into account both factors, Elenas manages to offer a solution that makes people who did not consider buying or selling online, now that they see the online commerce business growing, have a way to join it.These people, by the way, are mostly women, since gender inequality is more evident in some of these countries: there is a greater wage gap and less incorporation into the labor market.
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How Elenas works
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This platform, founded in Colombia and which has expanded to Mexico, does all its work through a mobile application. Registered users (women and men, it is not gender-specific) access the catalogs of available products.
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Using an internal search engine, they locate the products they are interested in selling, from technology to cosmetics or household products. On each product card there is a rating provided by other sellers, product photographs and a recommended retail price.
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INSIGHT: The main difference with respect to other marketplaces is that this app is designed for sellers, so the information in the product cards is essentially to help sell and not to buy. Remember that this is pure dropshipping and is sold without inventory.
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Once the ideal product is found, Elenas users can choose the price they want to set for it. The app suggests a viable price including shipping costs, and also specifies what profit the seller will make, so they can play with it to be more competitive or try to make a higher profit. That part of the strategy is up to you.
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INSIGHT: Elenas manages to "flood" the market with its products and to do so with a wide price range.
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Elenas is Social Selling
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We enter into the aspect of the sale itself. Sellers do not have their own online store as such. They are merely managers of orders through the app.So, how do they gain customers? Well, they do it through social networks. Specifically, those of the Facebook ecosystem (Facebook, Instagram and Whatsapp), which are the most widely used.
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In the app we can directly share products on these services. Although there are two ways and two different types of audiences:
- Direct sharing: this would basically be putting it on our social profiles as another post or sending it via chat. As you can imagine, the idea is to reach that close audience, the seller's contacts and their contacts.
- Download the information: if the seller wants to reach a more diverse audience, he can download the images and information to his phone. In this way he can create his own catalog on Facebook Marketplace, the direct sales platform of Zuckerberg's company.
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INSIGHT: Social Selling is a great way to create a market in Latin America. It may not be the most widely displayed eCommerce area of the globe, but social media works remarkably well. It's a matter of character that makes peer-to-peer recommendations and social proof particularly effective.
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Keys to Elenas' success
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- Knowledge of context: they have been able to hit the key because they understand the context of their audience.
- The ethical aspect: they have carried out an interesting exercise in empathy. Although, as we have said, we are dealing with a service without gender bias, their communication is clearly aimed at women, who are the main target.
- Trust: this is important because, as we mentioned before, it is one of the sticking points of eCommerce in Latin America. People distrust payment platforms, so Elenas only works with cash on delivery.
- Social vs. online store: if the idea was to replicate the more informal consumption model, social networks had to be the option. It has clearly worked.
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Did you know about Elenas' case? Did you find it inspiring? We hope so. It is a great example of a business model adapted to the society it is developed in, don't you think?
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Images | Elenas.