Zilingo Offers SaaS for Supply Chain Transparency — and Better Margins

● The company removes barriers to entry by allowing brands to leverage technology, data and financial services.

For Ankiti Bose, the fashion apparel industry — from a supply chain, sourcing and technology perspective — is sorely outdated. It’s an industry clogged with middlemen, and completely nontransparent. And at each step along the supply chain, someone is skimming a piece of the margins.

Sure, it’s a system that makes businesses money. But it also creates a barrier to entry for creative and entrepreneurial fashion business dreamers. And by design, it’s a supply chain, Bose asserts, that is not sustainable and even harmful to the lowpaid (and mostly female) laborers who are the foundation of a global, multitrilliondollar business.

In response, Bose and Dhruv Kapoor founded Zilingo in 2015 to “reimagine” the fashion industry. The company’s mantra is firm and concise: Zilingo empowers “the value chain to make sourcing, financing and tech tools more accessible, efficient and fair for all.”

Bose, who serves as chief executive officer, met with WWD last week to share her insights into what’s wrong with the supply side of the fashion apparel industry as well as how Zilingo’s e-commerce platform is “revolutionizing” the industry by removing barriers to entry, creating complete transparency across the supply chain and eliminating the need for profiteating middlemen.

Despite a long flight to the U.S. (the company is based in Singapore) and Bose’s internal clock telling her it was 2 a.m., the twentysomething ceo was energized when asked about the supply chain model and why it is broken and in need of a dire upgrade.

First, Bose said it was important to understand the scope of the industry. It’s global, and complex. She said people used to think fashion apparel was a “trivial problem” to solve versus other industries. Maybe that’s why it’s been a laggard in terms of adopting new tech compared with consumer electronics, hospitality or consumer goods.

“One of the big problems was that fashion is a very cross-border industry,” Bose said. “Polyester — no matter where you are — comes from China. The cotton comes from India. It gets manufactured in Bangladesh, Vietnam, Turkey, Portugal, Spain, Mexico, then it goes to the brand in Italy, and then you buy it in New York — or you buy it online, but it’s a fundamentally cross-border industry.”

As a result, there are agents, wholesalers, brokers, traders and other middlemen along the entire supply chain. And it is in their best interest not to fight to get the best price, because it would mean a lower commission, Bose said. Hence, the whole process is shrouded in secrecy. “So, you have a huge industry, it’s super analogue, no digitization, no transparency at all, and that’s how the agents at every step are making 5, 7 or more percent on each order. So instead of having five guys across the supply chain, you have 20.”

Bose said the current system wastes a lot of money due to the “leakages” of margins that go to the middlemen. It’s exploitive to designers and brands, she said. “But the most exploited is actually the guy sitting in Vietnam, because his way of passing on that exploitation is to have little children in the factories and paying them nothing. And, you don’t even know that the shirt you’re selling here in Midtown [Manhattan] was made by a little child in a factory. There’s no way to know because how will you check for certifications? There’s no transparency. You can’t even go that far back in the supply chain to find out what’s going on.”

And if there are certifications, it’s probably forged? “Yes, exactly. It’s a lie,” she said.

For her part, Bose said the solution requires “several levels of technology to actually remove the middlemen, and add certification and transparency across the supply chain.”

“Obviously the reason to do that is not this altruistic ‘ we have to save the world’ approach,” she said. “I strongly believe that the only way to save the world is to make it economically incentivized to do so. If you remove the middlemen, then you add technology, then you open up margins. If you open up margins, and everybody else makes money this way, then they’ll pick that way no matter what. If it happens to be the better way, then that’s when the little children will go to school instead of a factory.”

Bose’s seemingly simplistic, techdriven approach is fresh — and investors have noticed. Her start- up is now valued at nearly $ 1 billion.

Bose is quick to correct this reporter in defining Zilingo. It’s not an e-commercepowered sourcing platform. “We are a technology company,” she said. “SaaS on inventory management. SaaS on billing, invoicing, payments. SaaS around logistics and analytics, too.”

The technology is also geared toward mobile, which is how most business is done in Asia. “We’ve skipped the

SAP- and Oracle- kind of generation technology completely,” Bose said, adding that offering financial services is also another point of differentiation.

Zilingo’s financial services along with the SaaS solutions serve as a “transaction platform” where the yarn suppliers directly connect to the fabric mills, all without agents and with greater transparency. Bose said aside from the technology and financial services, data science is also an essential part of the entire platform. Bose said the company “marries” predictive data with the actual capabilities of the supply chain. The result is trend- right collections at the speed of fast fashion.

“To marry predictive data with actual capability is sort of where the magic really starts happening,” Bose said. “Because you could say this dress will sell, but where do I make it? How do I make it fast? And how do I make it with minimal flaws so that the brand can actually sell it fast?”

Regarding the traditional supply chain model and its lack of transparency, efficiency and sustainability, Bose is blunt in her assessment. “The industry did not disrupt itself enough, which is why there’s an opportunity for us,” she said.