Startup wants to make it affordable to buy large items from overseas
Hod Hasharon-based Ladingo says its data-driven ‘smart container’ software will cut costs and allow e-commerce to handle fridges, sofas and the like
Shoshanna Solomon is The Times of Israel's Startups and Business reporter
Israeli startup Ladingo wants to change the way consumers order products online, making it possible to buy big items such as refrigerators and sofas for overseas delivery.
“The international B2C e-commerce today does not exist for large items,” said Ruth Reiner, a co-founder and chief marketing officer at the Hod Hasharon, Israel-based startup, Ladingo, incorporated in January this year. “In 2018, we still cannot order a sofa online from overseas. We need to buy it locally, from a local retailer who imports it from abroad for resale.”
When online shoppers try to buy a large item from abroad, they either are notified that the item does not ship overseas, receive a very high shipping quote or are asked to manage the personal import themselves.
Retail e-commerce sales worldwide totaled $2.3 trillion in 2017 and are set to grow to almost $5 trillion in 2021, according to data compiled by Statista. The deliveries, however, consist mostly of small items, because they are generally delivered by air freight and not by sea, Reiner explained.
“Ladingo’s mission is to enable low-cost shipping for large items from any online seller to global shoppers,” she said. “The global B2C e-commerce is changing and we are without doubt offering one of the biggest opportunities to help boost this change.”
Today, large items like major appliances or items of furniture are shipped from manufacturers overseas via container by exporters, and are received at the other end by importers who then sell the items to wholesalers who sell them to retailers who sell them to consumers.
Ladingo says it can enable retailers like Target Corp. or Crate & Barrel to deliver items directly to international shoppers through a “smart container-sharing platform,” data-driven software that connects online retailers to buyers and ocean freight forwarders, enabling container sharing and maximizing container space.
This lowers considerably the costs for everyone, especially shoppers, Reiner said.
In addition, Ladingo has automated the whole process, end-to-end, handling all regulatory import and export requirements. This means that all tax and duties are presented at checkout, including the cost of delivery to the customer’s doorstep. “We are making buying a fridge overseas as simple as buying an iPhone case from Amazon,” Reiner said.
The idea is simple: Utilizing the same purchase process they’re familiar with, buyers will be able to choose a large product online and proceed to the checkout, giving their overseas home address. They then get a shipping quote that includes all taxes and duties, any last-mile costs and an estimated delivery time. They then place the order. The seller, meanwhile, gets a shipping address of a local warehouse of a Ladingo-certified freight forwarder, which then receives the package and assigns it, via the algorithm, to a Ladingo dedicated container. The products are then shipped, cleared through customs and delivered to the home of the buyer.
Ladingo’s customers, the online sellers, are integrated with Ladingo via an application program interface (API), “so basically this is the easiest sales expansion opportunity for retailers selling online,” according to Reiner.
It’s also “an amazing opportunity” for ocean freight forwarders, she said. They can earn more per container and get a piece of the B2C e-commerce market, which is “currently their holy grail, as e-commerce is currently nearly all done via air freight,” Reiner said.
Shipping abroad could also be a solution for retailers in the US who are feeling the heat of competition from Amazon, she said. In the past few years the US e-commerce giant has dominated the online market.
“If retailers like Walmart or Target want to survive Amazon, they need to start thinking about shipping large items globally,” she said. “Large items are still their advantage locally; there is no reason they shouldn’t take it global.”
Ladingo has already done pilot deliveries from the US to Israel and is soon to open a US-Europe line, she said.
Reiner was asked to join a panel in Las Vegas on Tuesday at the Retail Global conference to discuss Global Strategies for American Retailers. “It will be the first time such an offering will be released at any conference in the world,” she said.
Ladingo officials were also asked to present their vision earlier this year to an Israeli parliamentary committee tasked with lowering the cost of living, Reiner said.
“We believe our method can help lower the price of products by as much as 30%-50%,” she said.
Ladingo, founded by Reiner, Hagar Valiano and Guy Levy, employs some 10 workers in Israel including freelancers, and has a development team in Ukraine. The firm has raised funds via angel investors and Israeli shipping company Novamar, and is currently in discussions with a number of strategic investors and major retailers.