Wehuns Tan believes that online shopping and frustration go hand in hand for millions of Canadians.
He thinks shoppers have trouble finding what they're looking for and worry they're not getting the best deals. Duty and handling fees on purchases shipped from the U.S. also too often come as an unwelcome surprise.
Add in job uncertainty, a sinking economy and the pressure to stretch family budgets, and Mr. Tan believes the timing couldn't be better to have launched his website, Wishabi.ca, a social shopping engine that aims to change the way Canadians spend their cash online.
Retailers are already buying in. Heavyweights such as Hudson's Bay Co., Costco Wholesale Corp. and Apple Inc. have all signed on, each hoping that Wishabi's “deal rank” technology will help drive traffic to their own sites and encourage more Canadians to spend online.
“We're building the next generation of Canadian shopping,” Mr. Tan said, whose site launched in late January. “Especially given the recession and the current economic climate, Canadians need better tools to help them find the best prices and values for things that they want.”
As consumer spending slows, Wishabi enters the fray during a dark time for the online shopping industry. Although some observers predicted online shoppers would provide a rare bright spot in an otherwise dreary holiday shopping season, retailers in the United States saw e-commerce spending for the two months before Christmas slip from $26.3-billion (U.S.) in 2007 to $25.5-billion in 2008.
Canadians spent about $13-billion (Canadian) online in 2007, according to Statistics Canada.
There are already a handful of other shopping aggregators in the U.S. – such as Kaboodle, Stylehive and Smoop – each of which has attempted to use social communities to recommend and review products to varying degrees of success. But Wishabi is one of the most ambitious to date on this side of the border.
The site is essentially an online shopping mall. Users can browse for deals and compare prices of products offered by a variety of retailers. Using sophisticated algorithms that pull in data from participating retailers in Canada and the U.S., Wishabi converts the numbers to Canadian dollars and then ranks the deals based on several criteria, including price, warranties and customer service. For U.S. outlets, shipping fees, duties and taxes are baked into the price.
The privately held Toronto company has raised more than $1.4-million from angel investors and has signed up “80 per cent” of the top retailers in Canada, said Mr. Tan, a former Microsoft Corp. executive.
After its first month of public availability, more than 25,000 unique users stopped by Wishabi, adding more than 2,000 new deals to the site's database. An additional 30 retailers have signed up, at a rate of about one a day.
Once users settle on a deal, they are directed to the retailer's site to make the purchase. Wishabi usually takes a percentage of the sales it helps create – between 8 and 12 per cent – but the site also operates on a cost-per-click model with other retailers.
Wishabi is also looking to leverage the popularity of Facebook and Canadians' love of social sites. By tapping in to crowd sourcing – where the input of users is collected and aggregated to produce a collective opinion – users can review deals and even post their own bargains that they find online to win cash prizes. The company just issued its first payout of $500 last week.
Even more traditional retailers such as Canadian Tire Corp. Ltd., which recently announced plans to shutter its e-commerce operations, have entered partnerships with Wishabi in an effort to get their deals disseminated on the Web in hopes of driving foot traffic to their store locations.
Canada lags many other markets around the world when it comes to online shopping, but there's a bullishness around creating online communities among retailers, said Jim Okamura, a senior partner at retail consultancy J.C. Williams.
“The payoff is tremendous,” he said. “We've been gradually advising clients to put a bigger slice of their budget into some community elements, through partnerships or their own.”
