Zach Oschin, founder and CEO at social commerce startup Elenas
Zach Oschin, founder and CEO at social commerce startup Elenas. Photo: Courtesy.

This startup is changing door-to-door sales for female entrepreneurs in Colombia and Mexico

Having raised $8 million since its founding, social commerce startup Elenas appears to be succeeding in bringing e-commerce technology to one of Latin America's most traditional activities. The platform is already used by more than half a million sellers

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Elenas, a Colombian-origin social-marketplace platform, is changing door-to-door sales for female entrepreneurs in its home country and also in Mexico. The app, founded in 2018 by the American Zach Oschin in Bogotá, already has more than 550,000 sellers using the startup‘s tools, ranging from stock building and direct negotiation of over 80,000 products at wholesale prices with 1,000+ brands to access to logistics and payment services.

Until today, the startup has received a total of $8 million in funding – $2 million of a seed round raised in October 2020, and a $6 million Series A investment led by Leo Capital, FJ Labs, Alpha4 Ventures, and Meesho and announced in March last year.

Elenas’ next steps are related to new financial and non-financial services and partnerships, as well as organic growth in the two markets it already operates before expanding its footprint across Latin America.

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How social-commerce startup Elenas was born

Five years ago, Oschin moved to Colombia and, between a project and another for Polymath Ventures, where he worked as a business designer, he started studying the direct sales market, which in Latin America can be easily related to Avon, Natura, and other beauty and wellness brands that use this kind of workforce to sell their products. “I talked to a lot of those women, and I started to hear not only this refrain about how important these catalogs were for them to have a way to make money but also learned how entrepreneurial they were. I mean, even in an era of high penetration of the internet, smartphones, and per capita income, people are still selling door-to-door, bringing the physical catalog [with them], taking on inventory risk in a very limited way of how they can run their business,” Oschin told LABS.

The reasons behind this picture painted by Oschin are not difficult to understand. In Mexico, for example, according to INEGI data, women entrepreneurs own a third (36.6%) of micro, small and medium-sized companies in the country; however, only 13 out of 100 of these women entrepreneurs have access to finance. Women are also the driving force behind the so-called care economy, with 73.6% of them being responsible for taking care of their families and doing all the housework that comes with it. The same is true in most other Latin American economies – which also means a giant target market for Elenas, estimated, according to Oschin, in over 11 million women across Latin America.

Elenas’ initial challenge was to bring the technology of e-commerce to this trust, community-based business model that exists today in Latin America, and the platform seems to be succeeding in doing that.

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How social-marketplace Elenas works

Through Elenas, independent sellers (mostly middle-class women and single moms) in Colombia can browse a catalog of 80,000+ products in 12+ categories like beauty, personal care, and electronics, from 1,000 brands (manufacturers and distributors) and negotiate these products at a discounted wholesale price. With the app, they decide what they want to sell and for how much. They also get to promote their inventory on social channels like WhatsApp and Facebook or create their own website.

After monitoring the purchase process with the customer, the salesperson can place the sale with the customer’s information in the application, also allowing payment to be made in several ways. However, most customers still prefer to pay with cash in delivery.

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According to Oschin, there are at least two types of sellers using Elenas today: women who do it part-time, looking for extra income; and the women who do it full-time, building a business with Elenas and with earnings getting close to a minimum wage (which in Mexico is something around $264 and in Colombia, $279). “Our top sellers are selling about $20,000 a month,” said Oschin.

Elenas works both with large suppliers, which serve the national territory, and local service providers on the logistics front. Despite being a challenging area, especially in Latin America, logistics has developed absurdly in recent years, especially during the pandemic. “If you look at 99 Minutos, who we work with in Colombia and Mexico, or even Mensajeros Urbanos, another startup that operates in both countries, these are startups that have gained significant traction and are doing very well. This [logistic boom] has helped us accelerate our ability to achieve national coverage.”

By taking the burden of inventory and delivery off these sellers’ shoulders, Elenas allows them to sell more.

Elenas’ next steps

According to Oschin, there is still much room to grow in Mexico and Colombia before considering other Latin American countries. “We launched in Mexico six months ago, and we’ve taken on a leadership position, we’ve grown on a triple-digit rate month-over-month and, since we launched, we’ve got into a level of sales that took us two years and a half to reach in Colombia.” Still, he recalled, there are about 3 million women selling catalog products in the traditional way in Mexico and another 2 million in Colombia. “So, we’re just scratching the surface; growing and consolidating ourselves in a leadership position in these two markets is the most important thing for us right now.” Oschin said that the startup is studying Brazil and Peru as its following possible markets but that Elenas will not necessarily jump into those two countries this year.

Regarding the development of the platform, another goal for 2022 is to launch a digital wallet for its sellers, in addition to other financial management tools. Over time, Elenas also wants to offer these women other financial products, such as credit, through partnerships. “About 50% of these entrepreneurs come to Elenas without ever having a bank account. This is key to becoming the main source for these women to build their businesses […] This focus is also the reason why we brought in Natalia Gomez, who is our country manager in Colombia, who built out Rappi‘s e-commerce wing, the role Rappi mall; part of why we’re hiring this kind of leadership that can ensure we are the number one platform for social commerce in Colombia and Mexico.”