From Governance to Platform Empire: Circularity’s Role in Creating Market Giants

From Governance to Platform Empire: Circularity’s Role in Creating Market Giants

How companies like Vinted are building brand-led circular platform ecosystems while others treat circularity as governance.


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Quote of the Week:

We are contributing to a seismic shift in the second-hand fashion market, enabling more sustainable, socially-responsible shopping habits. CEO Vinted Thomas Plantenga


Let´s take a big sip of Ecosystem Espresso

From Governance to Platform Empire: Circularity’s Role in Creating Market Giants

How companies like #Vinted are building brand-led circular platform ecosystems while others treat circularity as governance.


In this EcosystemEspresso I want to lay out 3 core messages:

  1. Do not ignore! If you keep ignoring the circular platform economy you might overlook a trojan horse in your backyard as the future growth will happen in the move from #firstlife to #multilife ecosystems. While you might have a strong position in the currently dominant play, you could be dependent on platform players that are pioneering the #recommerce field.
  2. Dare to monetize platforms differently ! Most platforms follow the most common take rate play. Vinted is a great example moving away from the 20% supply side to a 5% demand side play. So, focus on what the strategy is and not the template!
  3. Organise for it! If you keep waiting for your Chief Sustainability Officer to get into business model innovation in a circular economy then you most likely will not get there.



1| Multi-Life Ecosystems layering business model after business model without attention of first life incumbents

In this quick run down of history you find some highlights that the public mostly is unaware of. It is the highlights of a long journey that now based on the business model pivoting and Zeitgeist is thriving. Originating from Lithuania this circular platform is the leader in re-commerce in fashion in Europe, but is has become already so much more.


Traditional strategy development is more financial planning

Now it is the time of the year 2025 planning ist in full motion or more or less done. It is the "same procedure as every year". The focus is on the usual competitive environment, shares etc. Most strategy and research teams do not have circular platforms, DPP and resale as a service on the radar. Consequently these platforms found a white space in the beginning and could grow without attention. See this long story below:

It might be a left-fielder to you.

Seemingly out of nowhere circular platforms like Vinted poped up and attracted a lot of attention and traffic. Liquidity has been achieved some years ago. There was product market fit long time ago. Now Vinted has become a platform in the growth phase.

Source: Business of Apps


Not everything was going smoothly but now momentum is building. The performance is impressive. Even more so reminding ourselves that Vinted was already funded back in 2008. Back in 2017 the revenue was still only € 11 MM. In the last 6 years grew more than 50x.

In most corporates the journey of Vinted would have been too long.

We were really on the same page in terms of wanting to grow Vinted globally – and not just into a local/national platform for classifieds, which most other investors were interested in.” Angel investor Mantas Mikuckas


Phase 1: Foundation and Launch (2008-2014)

From founding until the first round of funding it tool 4 years. Early in the brand´s history community was essential. It included a community aspect, allowing users to connect and share fashion tips. In a C2C set up this is a logic step.

Source: Napkin


Phase 2: Expansion and Friction Removal (2015-2019)

The dominance of smart phones was the foundation becoming a strong app based platform. Geo-expansion was the obvious next step.

What is special is shipping and buying protection. A platform thrives on trust and removing frictions. The perceived risk of not getting the quality you click on is super high. These features were the foundation of moving from #Launch into #Growth:


Source: Napkin


Phase 3: Innovation and Expansion (2020-Present)

Like many digital businesses Covid was an accelerator to the Vinted growth. Innovations followed and a subscription mode was introduced. Vinted has acquired 5 organizations. Their most recent acquisition was Trendsales on Mar 5, 2024.


Source: Crunchbase


Source: Napkin


The investors had to be patient for a long time, but Vinted ultimately delivered. Vinted has raised a total of $616.7M in funding over 9 rounds. Their latest funding was raised on Sep 25, 2024 from a Secondary Market round.

Source: Crunchbase


Source: Crunchbase



Financial details you can find on the corporate website. Today, more than 2,000 people work from our HQ in Lithuania and offices across Europe. Our team spans countries and cultural backgrounds, just like our members.


Vinted the strong brand

The company’s slogan is “Don’t wear it? Sell it!” Vinted is a powerful brand that is strategically focused on having more people more often provide clothing and other items they do not need any more.


Purpose-led:

The purpose is providing the space to operate in. It is desirable and can support expansion, as the circular economy (the 5R) is also all about #reuse!

Source Vinted


Value creation unit - preloved clothing

Core Interaction focused to create safe matching and transactions. Still today although there are so many more categories than clothing, apparel is the focus. The share of people transacting used clothing is still too small. Competition is focused on consumer electronics. It would not have been differentiating to move away from this positioning.

Nevertheless, having so many engaged users is allowing to create the


Source: Vinted


The expansion still has so much runway that actually getting more people to try is still the strategic focus. While the new categories support retention, the focus on getting people started is driving awareness and activation. Community is for engagement.

Communication is helping understand the simple steps. The UX is supporting a few step listing.

The app scores extremely high with 4,8 on Apple App Store.


Platform strength vs. linear business models: assortment and choice

Source: Vinted


Source: Vinted


Vinted provides authentification for luxury products.


Source: Vinted


#VintedGO - removing friction for buyers and sellers

Vined has made strategic investments and acquisitions for pick up points where people can drop and pick up their products.

Soure: Vinted


Source: vinted


Vinted is actively recruiting partner sites for VintedGo.


Source Vinted


Source Vinted


The benefit is not only direct revenue, but also customer traffic for partners. And even more importantly for Vinted a lot of visibility and reminders. Customers store products in their cupboards while always wearing the same items. The trigger of visibility can get customers to deliver more and more often supply!

In addition to that these points become access points for ecosystem partners and can create additional income and higher operational efficiency.


Vinted Wallet - making transactions secure.

The payment service is provided by a "PSP". Required in online marketplaces. Vinted is doing a good job branding this whitelable offering.


Vinted Wallet: how it works

Vinted Wallet is a secure e-wallet where the seller:

  1. Receives all earnings from sold items
  2. Can pay from it to buy on Vinted
  3. Can withdraw their money from it to their bank account

You don’t need to use Vinted Wallet to buy on Vinted. We offer other payment methods too. You also cannot top it up — it’s only there to store earnings.

Source: Vinted


Source: Vinted



2| Monetizing differently


Platform Monetization - demand side focus

As of 2017 with the arrival of the new CEO Thomas P. Vinted made a bold shift. eBay’s take rate generally ranges between 10% to 15% now, depending on the category of the item sold. This was monetising the supply side. A common platform strategy.

The monetization was moving over to the demand side. Back then eBay was higher. Vinted lowered the take rate dramatically (a quarter). This should lower the barrier to upload and create more and more demand while making the platform appear safe.


Source: MBA


The app is putting the monetization front and center. It is creating a lot of demand and loads the brand with safety and security associations.

Source: Vinted


A very simple UX with very few steps invites users in to simply upload their items.

Source: Vinted

Very prominently the buyer protection is part of the communication instilling the trust needed to have customers return and make referrals.


Source: Vinted


Monetizing service steps:

Source Vinted



3| Businesses are blind on the circular eye

Circularity is still not the major focus of business around. They are still busy reporting ESG progress. This is important too, but it is less attractive to leaders in charge of the overall business. They seek to grow toppling and bottom line.

ESG appears to be more a cost factor for those. The low hanging fruit have been harvested and now it is getting harder.

There is a structural challenges in most companies. The roles are not yet established to see business opportunities in this field.

  • Innovation teams are focused on new product as they cannot impact operations, like reverse logistics.
  • Online teams are busy optimising the running performance marketing.
  • ESG teams are in charge of the broader lens

Years ago Chief Sustainability and ESG Officer roles were introduced. They led to a organisational responsibility that was mainly in charge of the bigger picture. More recently CSOs have evolved from public relations figures to strategic leaders responsible for ESG performance. CSOs in the financial services industry, for example, now play a crucial role in integrating sustainability across the business and managing capital allocation for ESG projects. Still the focus is around the items below.


The CSO’s Focus Areas:

  • Sustainability/ESG reporting and compliance
  • Decarbonisation
  • Sustainable supply chain management
  • Stakeholder (internal and external) engagement


Change without a new role will not happen - Chief Circularity Officer

Most of the time these people are corporate communication experts. They might not have operational experience and not in the center of today's business model. Hence, their remit and impact is limited to the ESG agenda.


The CCO’s Focus:

  1. Circular design strategies
  2. Waste-to-resource innovations
  3. Reverse logistics implementation
  4. Circular business model development

I really like this overview from evolvable. It shows the difference vs. the CSO very clearly. This is very much about business model innovation and not a general corporate angle. It is about business:


Source: Napkin


Chief Circularity Officer: Key Responsibilities 

The CCO’s responsibilities are comprehensive and impact every aspect of the organization:

  1. Strategy Development: Crafting and implementing circular economy strategies that align with the company’s overall business objectives.
  2. Cross-Departmental Collaboration: Integrating circularity principles into all operations, from product design to end-of-life management, through collaboration with various departments.
  3. Waste Reduction Initiatives: Leading efforts to minimize waste and promote the reuse and recycling of materials throughout the value chain.
  4. Goal Setting and Metrics: Establishing ambitious sustainability targets and developing key performance indicators to track progress.
  5. Stakeholder Engagement: Communicating circular initiatives to internal and external stakeholders, fostering buy-in and support.
  6. Innovation Leadership: Driving the development of circular products, services, and business models.
  7. Regulatory Compliance: Ensuring adherence to environmental regulations and anticipating future policy changes.

There are first companies that install circularity teams, this will ensure that business can move beyond governance. Ikea, HP are just two of those.


There are great career and personal development opportunities for both current CSOs moving closer into business and digital platform experts following their purpose to create more impact. I would be the latter and eager to enable commitment and acceleration towards the circular frontier.



Outlook to a brand-led circular platform ecosystem world


A circular platform world unfolding and business people standing by only watching



In Summary:

  1. Don’t ignore circular platforms: Future growth lies in moving from #firstlife to #multilife ecosystems. Ignoring this could mean missing out on key opportunities in the #recommerce space.
  2. Monetize platforms differently: Focus on strategy, not just the typical take rate. Vinted’s shift to a 5% demand-side model is a prime example of innovative thinking.
  3. Organize for circular innovation: Don’t rely solely on your Chief Sustainability Officer. To succeed in the circular economy, business model innovation must be a core part of your strategy.


Join the circular platform revolution: one platform and ecosystem at a time.


Have a great start into the week!

Come back next week please.


Alex

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