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DataProm, a startup which started two years ago in Dnipropetrovsk, Eastern Ukraine with just half a million USD in funding, is now providing its Big Data solution to e-commerce companies far beyond its native market.

Ukraine Digital News has met its founder, Anton Vokrug, who shared his vision of the growing role of Big Data in e-commerce, and spoke about how his company got its first clients in Asia, taking advantage of the absence of western competitors in the region.

Why does e-commerce need Big Data? Why should this approach be more efficient than using user profiles and personalization in the traditional way?

The Big Data approach is a new way of detecting correlations between various types of data. If applied properly, this can bring huge benefits to any business, including e-commerce.

When it comes to personalization, Big Data – unlike conventional statistical methods – can increase by times the probability of meeting a customer’s needs. This leads to more sales and more profit.

For instance, one of our major clients has seen the depth of visit on his site increase by 1.8 times thanks to our solution. Some 7,000 clicks are generated each week by our personalization widgets alone. Three months after our system was installed, this site’s turnover increased by 17.5%. And this is just a start.

What are the limits of the Big Data approach?

There are no limits, and this is why Big Data has such a huge potential. The more you use Big Data, the better.

When analyzing a gigantic volume of data, a ‘machine’ is able to identify hidden patterns of customers’ online behavior which could never be detected by a human.

In Big Data, however, what matters most is not the volume of data, but the algorithms and mathematical models applied, as well as their sequence and combination. It is essential that this machine – the ‘black box’ as we call it – know what to look for and be properly programmed. This implies a huge number of tests, which makes it a real R&D project which is not accessible to all companies.

No privacy issue there?

In our case, Big Data analysis is not based on personal data. The sites using our solution just need to provide us with non-nominative information about their customers’ online behavior, so there is no way privacy can be violated at our level. As for the possible use of Big Data analytics by e-commerce companies, I think it’s a bit far fetched to seek there a particular threat to user privacy.

To which extent do e-commerce companies actually use Big Data today? Are we talking about a few pioneers or a real trend?

Big Data technologies are being used by more and more e-commerce companies. All big players like Amazon or Alibaba apply these technologies extensively. It has become a standard already – just an obligation if you want to increase conversion, ensure sales and profit growth in today’s competitive environment.

The DataProm solution has been designed for small and medium-sized online stores, which, unlike large retailers, cannot afford hiring an army of programmers for such R&D.

There are many services similar to DataProm in the US market. Among them are Amazon’s technologies and RichRelevance. Coming from Russia, RetailRocket is another serious competitor, currently expanding across Europe. Meanwhile we haven’t seen any serious rivals in Asia so far, which is why we are seeking to expand there – in particular, to China and India.

What is the potential in this region in particular?

E-commerce is growing fast – more than 70% a year – in China and India. Meanwhile, in contrast to the USA and Western Europe, Big Data technologies aren’t widely used there yet. Asian players may talk about them – though not fully realizing how profitable they can be – but there’s a lack of local providers providing access to these technologies.

For a company like ours, this is a huge opportunity. We opened a sales office in Hong Kong earlier this year to cover both Hong Kong and China.

Average revenue per user is high in these countries. We already have five clients in this region. They all show better performance with our solution – a 12% increase of depth of visit on average plus growing sales via our personalization widgets. And this is just the beginning, since our technology is learning by itself.

In which other countries do you sell your solutions?

Continuing our expansion in Asia, we’re planning to open a sales office in India, following the Hong Kong one.

We’re also exploring opportunities in the Middle East. We’ve just attended an e-commerce show Dubai, which has generated serious leads from the Middle-East and Asia.

Naturally we’ve got our strongest traction so far in Ukraine, since we are based in this country. We have around 20 clients there, essentially mid-sized e-commerce sites. It is too early to assess the efficiency of the solution, but we can already see an average 15% growth of the page views on these sites. None of our clients has stopped using our service so far.

When did you start the project and how did you develop the solution?

In May 2014, we started developing the ‘black box,’ identifying and testing mathematical models and analysis algorithms applied to e-commerce. It took us a long time to single out and test efficient models. In September 2015, we completed core product development.

A few months after inception, DataProm was backed by Fison, a Ukrainian fund, which injected $500,000 in the company.

This article was originally published on www.internetretailer.com and can be viewed in full

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