As a result of the pandemic, online shopping increased dramatically, and all the data suggests that this trend is set to continue. Across all ages and demographics, there are now more than two billion global digital buyers who spend over 4.9 trillion dollars annually. As a result, new businesses are springing every day to fill a gap, solve a problem or address a need in this trillion-dollar, rapidly growing market. Wakuda, an online platform for Black-owned product-based businesses, is one of those businesses.
Wakuda was founded in 2020 by friends, serial entrepreneurs, and investors Nathaniel Wade and Albert Larter. In the wake of the pandemic and the resurgence of the Black Lives Matter Movement, the founders set out on a mission to bring black-owned businesses to the wider mainstream audience in a meaningful way.
With the growing demand for online products and the significant lack of black-owned companies online, Wakuda saught eliminate the barriers to participation by providing an all-encompassing solution for the community. They essentially make it simple and easy to create an online presence, list products, and access Wakuda’s growing social media presence, mailing list, PR opportunities and masterclasses on how to grow their businesses.
Their eCommerce lifecycle journey
There are three lifecycle stages that every successful eCommerce company goes through. First, there is the build phase. This is the stage where the idea is conceived and developed. In this phase, the founders work to understand their target customers, clarify their needs and define a value proposition that resonates with them. Nathaniel and Albert took their time to get this right, a crucial step for any business.
Their research found that despite their mission, only 20% of their prospective customers were black. This was interesting, but a more notable finding was that their buying motivations directly affected their customer retention rate, which is a critical component of Wakuda’s offer to black store owners. This insight allowed them to tweak, refine, and nail the second phase of the eCommerce lifecycle, Launch.
They pressed the button in late 2020 and quickly saw a very rapid growth in customers. Their customer base was now 60% black, and that cohort boasts a retention rate of over 80% – an essential requirement for their retailers. Not many eCommerce ventures successfully make it through the launch phase, so this was a significant milestone for Wakuda. The patience and experience of the founding team allowed them to build a comprehensive understanding of their customer and establish Wakuda as a growing eCommerce brand, living out its mission.
The growth stage
Wakuda is now in the elite club of growing eCommerce businesses, the third stage of the eCommerce lifecycle. In my article, the three stages of growth, I share how eCommerce companies who have made it to growth tend to fit into one of these categories, startup, stagnant, or scaleup.
Wakuda fits squarely in the startup growth category of eCommerce growth businesses. Albert and Nathaniel are revelling in the joy and excitement of having their concept validated by the market. Real customers are coming in, and they are growing extremely fast. Most forecasts expect the eCommerce market to grow at around 12% in 2022. Wakuda is growing at 45%, way above-market growth.
The founding team focuses on customer acquisition during the startup growth stage, gaining traction with a repeatable customer proposition and demonstrating that the offer is scalable. Albert and Nathaniel are no different; right now, there is a relentless focus on growing the number of customers on both sides of their marketplace. This means they do not have time to get caught up in complicated tech systems and build their online platform, so they have used Woocommerce. Many in this growth phase would be using either an external development company or have chosen to use platforms such as Shopify or Magento.
The data suggests the eCommerce industry still has a lot of room for companies like theirs. As they continue to grow and gain in popularity, they will begin to feel the pressures of increasing competition and rising acquisition costs. When they get there, their focus will shift to growing their team, analysing the data to optimize their product and possibly a platform shift as they prepare for the big move into scale. If the founders continue to play their cards right, Wakuda is poised to have an excellent year.