The founder of Australian online retail platform MyDeal.com.au reckons his company has struck upon a formula to resist the imminent threat of Amazon.
“Now we have reached critical mass. We have about 1000 retailers using our marketplace to sell their products, to over 2 million customers visiting our website,” MyDeal founder Sean Senvirtne told Business Insider.
With that sort of audience, Senvirtne said his company has taken a different approach in preparing for Amazon compared to other local ecommerce sites like Kogan.com, by signing up partners to diversify the product catalogue — rather than introduce its own products.
“A marketplace is very hard to get off the ground but once you reach a certain degree, it builds on its own. The whole ecosystem becomes very, very strong.”
The latest deal sees MyDeal offering, from Monday, overseas holidays discounted at up to 50% through a partnership with Ignite Travel Group.
“We have done a lot of due diligence about how we can create the best value for our customers,” said Senvirtne.
Ignite Travel Group, which is 49% owned by Flight Centre, joins other MyDeal partners like ShaverShop and Kitchen Warehouse – a supply model that’s seen the marketplace double the number of new items added from July to August.
In the last month alone, the platform claims it has signed up 50 fashion retailers.
The MyDeal partnership model is similar to Amazon Marketplace – a third party merchant platform that last month had already signed up 500 Australian businesses even before the local arm revealed a launch date.
But Senvirtne is not worried about the US giant stamping onto his turf.
“We have studied Amazon very closely. We’ve studied how they rolled out their business in similar places, like Canada… It’s an amazing company, a very consumer-centric company with a very good value proposition,” he said.
“But where MyDeal.com.au separate our marketplace from Amazon is 80% of the stuff we sell are big and bulky items. Mattresses, chairs, bed frames, ping pong tables, those are the things we’ve been good at.”
This compares to Amazon’s original strengths in books, electronics and groceries, which are all physically smaller and, according to Senvirtne, require different logistics to bulky products.
“Amazon will sign up the same merchants… But Amazon’s arrival will open up more and more people to shop online.”
MyDeal, which was founded in 2012 and originally specialised in furniture and homewares, claims it’s boomed since it undertook its diversification strategy, going from 30 staff at the start of the year to now 60. The company’s annual revenue grew from $15 million to $35 million in the 2017 financial year.
The company was last in the headlines in April for raising $5 million of capital from Gandel Invest, the investment vehicle of Tony Gandel. Tony is the son of commercial property developer John Gandel, who was listed last year as Australia’s fifth wealthiest person with $5.4 billion under his name.