Anna Piñol and Chad Munroe, two Stanford MBA students, co-founded MylaBox, a marketplace that makes imported goods more affordable abroad. They shared their shared vision to level the price disparities of imported goods in emerging markets through innovation in international shipping and last-mile delivery.
Problem: Imports to emerging markets are expensive and complicated
Supermarkets in the Caribbean and in Latin America stock many goods typically found in the United States at substantially higher prices; for instance, a club-sized box of Kellogg’s Frosted Flakes that retails for $7.68 on average in the United States sells for $17.55 in Jamaica.
These prices are evidence of a larger problem that retailers have in fulfilling cross-border commerce in emerging markets such as the Caribbean. The goods that make their way to the region through local retail endure long supply chains that include multiple intermediaries, each of which have its own markups. To spread the cost of shipping, goods are shipped in bulk, leading to long inventory holding periods. Since utility fees are 3 to 6 times what they are in the United States, holding inventory for extended periods further leads to increased retail prices. On average, goods are 100% more expensive in developing countries than they are in the United States. Considering the massive difference in the purchasing power of the average U.S consumer versus that of the average consumer in developing countries, imported goods are not affordable to most at these higher prices. Thus, many US products that customers abroad demand never make it overseas at all, creating a gap in market demand.
In order to close this gap, immigrants in the United States have been shipping items back to their friends and family for decades, since the cost of buying these goods in the United States and shipping them to their home countries is significantly cheaper than buying the goods locally abroad. With consumers in emerging markets increasingly gaining access to the internet and becoming accustomed to ordering goods online, this informal market is becoming more organized over the internet. In fact, the global B2C E-Commerce market has grown to be a $670 billion industry and is expected to grow to $1 trillion by 2020. Anna Piñol and Chad Munroe, two current second year MBA students at Stanford, saw this shift as an opportunity and founded MylaBox.
MylaBox: Introducing the product
MylaBox is a cross-border marketplace that aims to make imported goods more accessible and affordable abroad. In pursuit of this goal, Munroe and Piñol are building a sophisticated network of “gig economy” workers that receive the overseas shipments and carry out last-mile delivery.
“Think Instacart for B2C cross-border commerce.”
– Anna Piñol, MylaBox Co-Founder
Currently in beta, MylaBox.com only delivers to Jamaica. The website lists over 3,000 items, all of which are currently in stock at US retailers near a port in Miami. When an overseas user performs a search, Myla displays matching items that can be exported from the US and imported to the destination country according to a complex set of cross-border rules and restrictions.
Screenshot from MylaBox Beta
After a batch of orders are placed, Myla personnel in Miami pick up the goods from local stores and pack them in large boxes that Myla has specially designed to fit many orders and cost-effectively ship. Munroe claims that the Myla’s innovative box dimensions and structure dramatically reduces landed costs of shipments through standardization, pooling, and scale.
Munroe and Piñol are currently in conversations with a large national wholesale club with a physical presence in Miami to gain access to the store’s inventory and send orders directly via an API. The agreement would also give Myla discounted pricing for volume purchasing.
When the boxes reach their destination country, the “gig economy” workers, known as MylaBox Owners, separate the orders and carry out last mile delivery. Munroe finds the network of Mylabox Owners as the company’s core competitive advantage.
“As troops on the ground they generate local demand, understand the needs of local customers and give us great feedback to help us improve our product line, all without any marketing spend.“
– Chad Munroe, MylaBox Co-Founder
MylaBox’s business model benefits from lower tariffs and looser government restrictions around consumer cross-border trade as does the informal economy of shipping goods back home. If MylaBox becomes large, international governments may try to impose commercial regulations on goods bought on the online marketplace. The founders are fully aware of this risk and have already taken protective measures in designing the business structure and local network of MylaBox Owners to avoid such a situation. They also have the advisory support of officials in Jamaica, their beachhead market.
Before joining Stanford, Chad Munroe worked as a Product Manager at SpaceX. He came to business school with the intention of starting company. Born and raised in Jamaica, he saw a business opportunity and potential to make positive impact by reducing the cost of the basic necessities.
Anna Piñol also came to Stanford with a desire to start an e-commerce company. Before pursuing an MBA, she built the Amazon Marketplace business in Spain as one of the first 20 employees in the country. During her time at Amazon, she worked with hundreds of US, European and Chinese retailers and supported them with their global sales, both by leading a team of account managers and by managing large-scale fulfilment solutions including Amazon Dragonboat. She is fluent in all of the major languages spoken in the Caribbean (Spanish, French, Portuguese, and English).
Last winter, the two enrolled in Startup Garage, Stanford Business School’s intensive course on customer discovery and building a business that produced DoorDash just a few years ago. The class funded them to go to Miami and Jamaica to validate the customer problem and design a solution. After building a business plan, they competed in the annual BASES challenge and placed in second beating 110 teams and received a $15,000 award. Last summer, Munroe and Myla worked full-time in Miami to build the operation.
What’s Next for MylaBox?
Currently, the MylaBox team is experimenting with different incentive structures and compensation plans for the MylaBox Owners in Jamaica as it delivers real orders to customers. In order to fund these tests, the team is currently looking to raise a $300,000 pre-seed. Before graduating in June, Munroe and Piñol intend to raise a seed round to build out a headquarters in Miami or New York and expand the team and build out the company’s footprint in the Caribbean.
“Cross-border consumer e-commerce in the Caribbean and Latin America is expected to be a $53Bn industry by the end of 2020. With the lowest prices and broadest selection, MylaBox will be positioned as the one-stop shop of choice for customers, first in the region and then the rest of the world.”
– Anna Piñol, MylaBox Co-Founder