Crowdfunding Investment Products
Create a ‘Store’ for Ongoing Sales
Diversifying into an online shopping mall
Share of sales from online shopping continues to grow
Wadiz, a leading domestic crowdfunding platform,turned a profit for the first time since its founding last November. The key to this success is said to be the diversification of its business into e-commerce through the launch of theWadiz,” which sells products funded through crowdfunding online.
Customers browse products Wadiz, a space in Seongsu-dong that reopened after renovations in February of this year. [PhotoWadiz]
Providing 'crowdfunding' to startups struggling to secure funding… Annual revenue of around 40 billion won
According to the retail industry on the 20th, Wadizposted a monthly operating profit in November of last year. This marks the first time the company, founded in May 2012, has surpassed the break-even point. Analysts attribute this profit to an increase in Wadiz users and the growth of new business ventures. This is why Wadizis expected to achieve a quarterly profit within this year.
Wadizis a company that acts as an intermediary, helping individuals and businesses raise the funds needed for their projects from a large number of small-scale investors. Typically, companies use these funds to manufacture products and then deliver them to consumers. It supports small and medium-sized enterprises (SMEs) and startups—which have brilliant ideas but lack the capital for mass production—by enabling them to produce products on a small scale.
If a project raises 100% or more of its target amount, it is deemed successful and moves on to the production phase. Startups that successfully secure initial funding through Wadizoften go on to scale up their operations. Luxury e-commerce platform Trenbe, craft beer specialist SevenBrew, and Hanwoo beef brand Seoloin are among the companies that have used Wadiz.
From a consumer’s perspective, the main advantage is being able to receive products that haven’t yet hit the market faster than anyone else. Early adopters and bargain hunters make up the core customer base. Another appealing aspect is that the earlier you participate in a project, the higher the discount rate and the more benefits—such as free gifts—you receive. Wadiz estimated to have reached 250 billion won last year, an increase of more than 16% compared to the previous year. It is reported that revenue during the same period rose from 34.2 billion won to around 40 billion won.
Diversifying the business into online shopping malls… now accounting for 13% of total sales
In particular, analysts attribute the recent rise in performance to business diversification. In September 2021, WadizlaunchedWadiz, a year-round online sales platform, adding e-commerce capabilities. Wadizis a service that allows businesses that have successfully secured funding to open shops on the platform and continue selling year-round.
The number of brands listed on Wadizsurpassed 1,500 just two years after the service launched, andas of January of this year, the number of products available exceeded 2,700—an increase of more than 60% compared to the same period last year. As the product lineup has expanded, sales are rising by an average of 50% per quarter. The share Wadizin Wadiz total transaction volume also rose from 2% in January 2022 to 13% in December of last year.
Wadizis also making efforts to expand its distribution channels offline. The offline store "A Slightly Different Life," operated Wadiz
Wadizis also seeking to expand its distribution channels offline. A prime example is theWadiz Flagship Store Seongsu,” which recently opened Wadiz“Space Wadiz” in Seongsu-dong, Seoul. The flagship store showcases a curated selection of products that have succeeded in crowdfunding campaigns and popular brands from the Wadiz Store. Customers can experience and purchase approximately 350 products across various categories, including fashion, beauty, tech, food, and home living. The store explains that it carries only top-rated products that have been recognized by numerous supporters (those who participated in the crowdfunding campaigns), such as Arencia, 210 Company, Dan Komma, and Normalist.
The company is also expanding its collaborations with established retail giants. Since early last year, it has been selling products through Hyundai Home Shopping and Shopping Live, and recently sold out 200 million won worth of “Fisco Korea Kitchenware” in just 30 minutes. It also continues to showcase popular Wadiz crowdfunding products on Lotte Home Shopping’s mobile TV platform, “L-Live.”
As the trend of “niche consumption”—where consumers delve deeply into specific products or areas they prefer—gains traction, crowdfunding is experiencing rapid growth overseas as well. Notable examples include Kickstarter and Indiegogo in the U.S., Makuake in Japan, and ChitChit in Taiwan. According to market research firm Polaris Market Research, the crowdfunding market is expected to grow from 23 trillion won in 2022 to 78 trillion won by 2030.
(Original: Wadiz Expands Its E-commerce Reach, Posts First Monthly Profit)
