Name: Zilingo Is Making Fashion Fair, Connected And Transparent For All
Uploaded: 2019-12-11
Duration: 19 min 5 s
Description: An interview with Zilingo CEO Ankiti Bose

Thank you so much for being here. Thank you for having me. I'm gonna give you a great introduction, but so you are on Fortune's 40 under 40 list this year. You're just named to Bloomberg's list of 50 people who defined 2019 Because of this company that you started, there's so much buzz about Zilingo. Can you just tell us its origin story? How did it come to be? Okay, yes, absolutely. Thank you for having me. So you know how fashion and textiles there are 5 % of global GDP, everybody wears clothes, all of us are wearing clothes. Naturally it's a big market. Yet somehow this $ 3. 8 trillion industry is the most undigitized one of the most polluting, horrible, awful industries in the world. Everything that they say about fashion is true, right. It's filling up landfills, fast fashion is killing the world, killing the planet. People are consuming too much we're at peak apparel, every single thing that they say about fashion is is true. It's unsustainable. There are you know, sometimes there are little children and factories in Vietnam that are making the clothes that you and I are wearing in this room. We don't even know it. If I ask any of you. Do you really know how your clothes were made? Actually, we don't know. So, that's where we come in. That's where the lingo comes in. And while it started as a company that was providing tools to merchants, it's now evolved into much more the We try and provide transparency across the whole supply chain. We provide tools to fabric producers, mills, factories, and brands to transact with one another, and also software to run their businesses with full transparency. So that's human resource management software, ERP software, quality control software, line efficiency, and so on and so forth. And then we use all of those services and the data we collect to provide financial services to them. So it's now evolved into much more than just a set of software tools to help merchants sell to consumers. It's actually become much more about the entire supply chain and making it, Fair and transparent. Right, and you came up with this idea with your co founder when you were on holiday, right? Can you walk us through that. So it's actually a fun story, I was not with Michalel Venra at the time, I was in Bangkok and there is this market and for those of you who've been to Bangkok. There's this market called [ UNKNOWN ] which has just a lot of small buttons, and all these guys are getting left behind in the digital economy. Or at least they were. So all the big brands were selling online. These guys, they're 25, 000 of these [ UNKNOWN ] about one weakened market. All making their interesting products and then, you know, the number of people that were coming to buy them every weekend. It was dwindling. So the idea came about from okay, you know, these are some fantastic products but what if these merchants had tools just to enable them to compete in the online world So, that's what happened on that holiday in 2014. Right? So yeah. 2014 so you're really young company still. And she started as a platform for these merchants. But you did shift two years in to really focusing on the supply chain technology. And that's, I mean, that's pretty early to make such a pivot. Can you describe what that was like? As a leader to make that decision, and if you had any insecurities about it? Definitely. [ LAUGH ] I think. I'm insecure everyday and that is a challenge about, I think it's really, can I get pass this? And can I own it? Do I have enogh confidence in the data that we have? Is it, it's never perfect, and the cause of perfection is too high. So you still have to make decisions when this so called pivot which we call evolution. Sure call it an evolution of the business happened, it was actually much before everybody started thinking of b2b startups as sexy again, right. It was still very much the time of. Start of spending a lot of money, getting a lot of GMV and big valuations. So we were still in the middle of that kind of a market where we said, hey, you know what, this is not making a lot of sense. How will this company ever make money? How will this company ever be very valuable to the customers that it serves? And some of those first principle questions. We get to asking ourselves and we said, Hey we should be really solving the problem of what happens to the product before it gets to the merchant. Instead of trying to be one more app, or just one more app that's helps the consumer discover it because literally at this point in Asia, and 2016. Everybody is spending millions and 10s of millions of dollars trying to tell you to download an app. And I'm sure that happened here [ UNKNOWN ] just download this app, download this app, download this app. And everybody was doing that. But nobody was fix Anything that happened to the product before it got into that app that people were trying to get you to download? So that's where we thought, Okay, what this makes sense. nobody's doing it, but it's a little bit of a brave decision. Let's do it. So our investor base was really really supportive which was helpful. But [ LAUGH ] just as it happens, this was also the time where we found that financial services was gonna be an important hook in the entire process of doing this business, and that people weren't so confident about. Mm- hm. So our theme was confident, our investors were confident but banks and financial institutions didn't want to just as yet. Lend on our platform data just because we said it. So I think the crazy thing that sort of we went out on a limb and did there was we started lending from the balance sheet. So we said we have so much data on our platform. We know exactly which manufacturer is buying what from which supplier and selling to which brand and this is what's going to Brand X and country why If we believe in our data, let's lend and today we have lent over 100 million dollars with less than 1 % of non performing assets. And now all the banks want to work with us. Wow. So I'm glad it worked out. Wow, that's quite an evolution. [ LAUGH ] I'm wondering too about you said that you sensed a real change in how, Investors saw you in terms of raising money when you made this shift. Can you talk about that? Yes, definitely. I think two things happened about two years ago. One was the business, just the economics of the business improved significantly, as we moved away from just being another download the app To a much more holistic platform that was using the data for helping much ensure a lot of other things, SAS financial services and so on. The Economics improved dramatically. Obviously, I think that had a lot to do with investors sharing a lot of interest, because we were not just another money losing e- commerce startup. So that was one. Second was I think, that was around the time both in the journey of the company as well as just the scale of the business where people stop thinking of this as Some little girl is building a fashion startup to Okay, wait a second. This is a big supply chain company. It's truly disruptive. This is not just about one or two markets, it can be global. And I think just that was an interesting shift to see how people were perceiving both the founding team which is 50 % female, which is rare in tech in Asia. And, and the business itself. So it is traumatic. So you are in a year, it was dramatic, dramatic, dramatic or traumatic? [ LAUGH ] So you are in a stage of hyper growth you have outgrown and four offices and four years. You're looking for your fit. You're looking for your iPhone .>> Yeah just in Singapore ,>> just in Singapore. Yeah. and you've been open about the impact of that on you personally on your team, you said that you have a fear that that sort of growth will create Standard tech unicorn ****. [ LAUGH ] And I'm wondering where that fear we all have like a picture in our mind. [ LAUGH ] I'm wondering where that fear comes from and what you're doing to combat that fear? I'll by ourself. Start yourself falling into that, and your team falling into that. So I think, there's a lot of women in the room so we all drew up a picture in our minds what that looks like because we've all come across that sort of person. And I think it happens because I actually think that women tend to do it less, because we are always very, we question ourselves a little bit more and we tried to always be sure of our achievements before we claim them. So I think just as a woman let company, the risk is a little lower. But having seen that happen a lot What we try to do is we make sure that internally inside the company, we don't glamorize valuation. We don't glamorize fundraising. We don't glamorize metrics that are not related to margins or profitability or retention or things that will matter in the long run. It's not to say that we don't celebrate wins. There is definitely a culture of celebrating wins but there's always the sense of but you know what in the long run, we have to make it and to make it we need to do X Y & Z. So I think it helps to be realistic about achievements and then things like. Valuation, private market valuations and fundraisers, they don't really mean anything unless you can take it to a sensible conclusion. So as long as the leadership knows that it's useful, so we just try to make sure that's drilled in all the time I'm gonna go to questions in a moment. So if you start thinking about what you wanna ask them PD, so here, how many countries are you present in at the moment? 13. 13 and one of those is the US. That you just recently announced to investing $ 100 million in. Can you talk about the opportunity that you see here now for [ UNKNOWN ]? For sure. So the US is our fastest growing demand market which means that brands and businesss and ant a transparent and sustainable supply chain, more visibility are starting to work with us. The US is the largest or I would say it's comparable to Western Europe but Western Europe is part of a continent. So it's the largest country that consumes fashion in the world and a large proportion of the exports that come into the US actually come from Asia. So when we started thinking about the opportunity in the U. S, we actually came at it from the perspective of let us make the Asia sourcing that comes into the U. S. Anyway, let us make it transparent. Let us make. Make it sustainable. Let's make it responsible. And that in itself was a huge use case. But as we went along, we realized that there were a lot of factories in the US. And there's obviously, a whole new I wouldn't call it an issue whole segment in the market, which wants locally produced locally sourced And we wanted to help that become more digitized and responsible as well. So now as we're growing in the US we're seeing that we're not just working with brands that want transparency but also factories that wanna source better and provide a transparent supply chain to their buyers no matter where they are. Right. So the US is emerging as our fastest growing market now. And what about the trade war between, well, there's a lot at the moment. But I'm referring to the one between the US and China, and how do you see that impacting this sort of demand that [ UNKNOWN ] was receiving? See, I think the trade tensions are Are more of a fear creating sort of volatility creating. I would say every time there is something on the trade tension that triggers this response from brands, whether or not they are Whether or not the brand owner is it doesn't matter whether they lean left or right. They're all saying Can I have less volatility in my business, please because I don't know what is about to happen. So most of the brands are not coming to us and saying he moved my sourcing away from China. Of course, if they're sitting with 90 % sourcing in China, then some of them are starting to say that but It's on move away from China. Can you help me build a diversified portfolio of sourcing options so that I don't have a massive concentration risk on any one country, whether it's Mexico or China or the United States? And can you give me a set of options where I can optimize for, somewhere I'm optimizing for speed, somewhere I'm optimizing for margin, somewhere. Its quality. But can you help me transparently understand what I'm signing up for? Because in any case, even before the present government, there was already a shift happening towards sustainable sourcing, more transparency. A move away from China because of the changes in the labour arbitrage inside China is not that cheap to make in China anymore. There is definitely a big focus on sourcing locally. So some of these themes were already, at play, and now it's just it's happening all very fast and all at the same time. Right, well, are there any questions for in Chitti? We have one up here, in front and one over there [ BLANK_AUDIO ] And a third over here, get to as many as we can. Yes. Morning, Stacy Tank. Thanks for being here. I have a question about the social and environmental impact, the positive impact that you will be catalyzing amongst others over the long term. And there are a lot of things as a Kind of a big startup at this point, but still young, you have to focus on for the short term. But a lot of these positive social and environmental impacts will come more in the mid and long term, cuz they're glaciers, they move slowly. But what are the key measures of success that you all are looking at as a yardstick for that kind of success? Thank you, great question. You're absolutely right Today the reason that most brands and brand owners are moving towards a more socially responsible and sustainable supply chain is mainly because consumers are demanding it right. So, if you have a very bad quality highly polluting polyester or or not a socially responsible viscose and the product. The end consumer knows, especially in the developed markets, and that's putting an immense amount of pressure on brands to move to somebody like us as as opposed to a lot of the old school old economy competitors, which don't have tech and no transparency. And, I think, a big, the way to measure success right now is for us is just the percentage of sourcing that we do. On the whole of the business that we run, which is sustainable and responsible, however, a few months ago, this is an interesting anecdote. We ran into a problem because brands were just, they were more interested in appearing socially responsible than actually being that So we started doing R & D around around sustainable fabrics and we developed there are some brands that do it successfully. We developed a few products including, you know, shoes made out of bed bottle caps and. You know, banana peels, fabrics out of banana peels and things like that. And we presented them to brands and said do you wanna buy this and we didn't actually tell them that, you know the carbon footprint was so and so or that this was made out of recycled fabrics and they love the product so much We said look, you can make money and be socially responsible. So there's a little bit of a push. But the most helpful strategy is to have consumers ask for a reliable stamp of sustainability and responsible manufacturing. So I think if we can keep the pressure up on brands, it will help We have one another question over here. Hi Michelle Chenery director of international sales at Altria. I wanted to first say You are such an inspiring woman and I'm privileged to be sitting in the room right now. The other thing that I just wanted to ask is, you know, you've transformed your company a few times. Now and And have made it into something that is really aspirational for many. What were some of the triggers or pivot points that gave you the confidence to activate against some of those insights that you were seeing? Fantastic question. Well, I think we were just chatting about this backstage sometime back, and I think what I said was that There was a strong intuitive feeling that we were going in the wrong direction when we were just spending a lot of cash to grow fast but not, you know, not generating enough value for the merchant. That's how I felt. I went ahead and trusted my intuition at the point without enough, I wouldn't say the data was 95 %. There, I think it was 65 % there, and the cost of perfection would be too high. Like I said before, so we just went ahead and changed course. And we did it in a way we know, we were very small company, very few people just two years old. So it was easy to experiment. And as we started seeing results we said okay, this has to be a wider experiment and then that became the whole company. Today that experiment is 95 % of the company. And I think what helped was I was so young and I was so naive and I didn't know enough that I just thought that [ LAUGH ] It just doesn't make sense what we're doing, and what we wanna do makes more sense. We just went right ahead and shifted course and I think sometimes when there's too much of an experience baggage, sometimes it's a bad thing. But sometimes I forced myself to make brave decisions like we used to couple of years ago But I think it helps to have that sort of very forced principle thinking, if this makes sense and this doesn't make sense and this is why this will work and this won't, and just going ahead and experimenting. Amazing, and we should say, how old are you? 28. 28 [ LAUGH ] Fancy. Well, we'll have to leave it there. Thank you Ankidi so much for joining us. [ APPLAUSE ] Thank you. Thank you so much. Here. [ BLANK_AUDIO ]

Zilingo Is Making Fashion Fair, Connected And Transparent For All

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An interview with Zilingo CEO Ankiti Bose