There has been a great deal of buzz about Fruugo during the last few months. This “biggest startup in Finland”, “Jorma Ollila and Risto Siilasmaa venture”, “Tekes funds their fun” and “most NDAs in Helsinki” rumoured company is now finally starting to unwrap from their stealth position.
I had a pleasure to be in the first group of non-NDA intros on the current Fruugo beta couple of days ago. This means I have access to their system. I can use it and even buy stuff (which I’m propably gonna do during the weekend). Yes, it’s still in beta, but it works!
I’m not going to give you a tour around the user experience of Fruugo, that is being covered already by Startupbin, who attended the same group with me. Also, for screenshots of the service in Fruugo photostream in Flickr.
How’s their business outlook?
Instead of judging a system like Fruugo by it’s cover, I think we should look at the business model they are providing. Before getting to talk to Fruugo people and seeing how the system will function, I had my expectations high.
I was thinking that this is a chance to make ecommerce really happening by removing the obvious obstacles that have slowed down the wider use of international business
- Trusting the merchant
- Trusting the buyer
- Complex it systems required
- Challenges with international payment systems
- Language problems
- Problems with the logistics
- Problems with customs and other related paperwork
I knew that if Fruugo can solve most of these problems, they will be very successful.
And glad I was, when I was presented how Fruugo will work. Let’s see:
Trusting the merchant. Fruugo will check the background of all merchants in the system. They will also make sure that customers’ are being served by offering Fruugo customer service – someone to get in touch with and solve the problems with.
Trusting the buyer. Fruugo will take care of the customer side as well. Fruugo has their own “fraud management” system, that clarifies the problems with buyers behaving badly.
IT-systems. Instead of having to invest huge amount of money into websales systems, Fruugo will only need to have an interface with merchant IT-system. If the merchant is not selling online yet, there is no need to start a new multilingual webstore – just integrate the current system with Fruugo, and you’re good to go.
International payments. Fruugo has it. Customers pay with the systems they normally use in their country, and in their preferred currency.
Language problems. Not to worry anymore. Fruugo is localised in your own language, but you can also choose multiple languages that you understand. My primary language in the system is Finnish, but I also said I can use Swedish and English. When searching products, I can do a search using any of the languages, and I get the results in my primary language. If I was to seach for “hame”, “kjol” and “skirt”, I would always get a nice selection of skirts, in Finnish.
Logistics. This is something that may be in their future pipeline. Now the logistics are taken care by the merchant, but is of course automated and supported by Fruugo knowledge.
Customs. At this point Fruugo doesn’t really need to help with the customs, since their markets are within the EU. I personally believe this will be solved, once Fruugo expands outside of the EU.
Fruugo will start opening to limited number of users gradually. First they will take Finland, and very soon after that Sweden. It is expected, that Fruugo is available in most of Europe during this spring.
I had the opportunity to talk to Fruugo CEO Juha Usva and VP of Marketing Janne Waltonen about this. They are very convinsing, down-to-earth, cut-the-crap and brightvisioned with Fruugo and their opportunity. No, there is no company jet or huge parties. Fruugo is not hosting huge parties.
They are working hard to provide something that will hopefully change the way people do ecommerce.
And feeding their little baby panda. Gently.