The Beyond app removes friction from the cross-border shopping experience.

BEIJING — The business of “daigou” or parallel goods, is a big one. The practice, used to refer to those who help purchase goods overseas and send them to China at lower prices, accounts for as much as $100 billion annually across the retail sector, according to an October Nielsen report.

But for the most part, the hauling of gray market goods across borders often by a university student making a side income or via a loose network over WeChat groups — has not been built for efficiency.

The Beyond app, built by three former Google engineers at the firm BorderX Lab, wants to fix that.

The platform promises to smooth out all the friction from cross-border shopping — from accommodating international payment methods to smarter logistics built on artificial intelligence, to localized content in Chinese that would help customers discover American and European lifestyle brands.

Beyond’s client list already includes Saks Fifth Avenue, Everlane, DKNY and Finish Line, among others, and on Tuesday, it revealed a $20 million Series B funding led by Kleiner Perkins. Set up in 2014, the company has been profitable since the third quarter of 2017, and is on track to quintuple its size from the year before, its executives said.

“We want to provide an absolutely authentic shopping experience — whether you are sitting on a couch in Shanghai or Beijing, it would be the same experience as if you travel to Manhattan or San Francisco’s Union Square,” said Albert Shen, BorderX Lab’s cofounder and chief executive officer.

The Beyond app takes 14 calendar days to deliver from purchase to doorstep. Besides translating content and providing shipping, Beyond also functions like a digital agency offering marketing services like sourcing influencers to amplify messaging.

The company makes money from charging merchants, and adding  a processing fee on the consumer side, although Shen is quick to point out that the firm is transparent about it, listing as a separate line item and doesn’t mark up any goods.

BorderX Lab cofounders, from left to right: Liu Jun, Albert Shen, and Huang Chengdu.

BorderX Lab cofounders Liu Jun, Albert Shen and Huang Chengdu.  Courtesy

“A big part of what a ‘daigou’ does is capture the demand that’s already there. They help people fulfill what they want. Our discovery engine is creating demand, not just satisfying demand,” said Jeff Unze, the company’s president of strategic partnerships.

While many a brand’s platform of choice are big players like Tmall and JD.com, Unze said the two use algorithms that penalize merchants which focus on long-tail products and aren’t conducive to discovery. Beyond provides a light-touch way to reach the Chinese consumer.

“There is no need for a joint venture or to hire a China team to expand globally. We can get it live within two weeks and be profitable on Day One,” Unze said.

“Everlane is a really good example of that where they had a lot of demand,” he continued. “A lot of influencers had written about them and they’d done a lot of work with a social selling platform but found that really unwieldy and tough. We took really good care of their customers and their content. We took such good care of their customers, now they have a callout on their app that if you want products shipped to China, use Beyond. Not only do we have logistics, we have a 60 person team providing customer service in Chinese.”

Beauty brands are also an ideal merchant, the company said, due to regulations that require brands that are physically retailing within China to test on animals, but a loophole that doesn’t require the same of online beauty sellers into China.

With the new investment Beyond plans to add to its team of 150, which is spread across offices in Silicon Valley and China — in Shanghai and neighboring province Jiangsu — and to enhance their bot technology and artificial intelligence capabilities on the platform.

“We’re not a ‘daigou’ who makes orders one by one,” Shen said. “It’s very, very valuable during the peak season, like Black Friday. We only need one person to take care of the order fulfillment. I know some daigou players, they need to hire 100 people for that.”