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Frethan Technology

Fully automated international supplier assurance platform

Australia
Market: Trade, Blockchain
Stage of the project: Prototype or product is ready

Date of last change: 07.10.2020
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Idea

Frethan is the first fully automated platform that helps businesses to select, manage international suppliers, and deliver quality products on time. Frethan delivers an end-to-end importing management solution for supplier assurance and quality control.

Frethan will give you proven templates, the trusted supplier database and video clips of the great negotiation skills, so that you are guided through to the whole sourcing process 10 times simpler, faster, and 10 times cheaper.

Current Status

• on 28th Sep 2020 We won the HK IP hatch challenge, will partner with Panasonic and Nokia
• We started 100 membership pre-sale campaign on 24th Sep 2020
• Sold 10 membership within a week and generated $25,000 revenue
We are now in the second stage of applying for the Australian Federal government Accelerating Commercialisation grant of $1 million.

Market

Australia imports from China was US$57 Billion in 2019.
China’s total imports and exports in 2018 totaled US$40,000 trillion!
There are over 100,000 importers in Australia.

Our Target market is the SME market. With buyer, seller, and third parties.

Customer segments include small to medium-sized businesses, importers, manufacturers, exporters accountants, retailers, wholesalers, Amazon sellers, shop owners, construction, hotels, e-Commerce, printing businesses, innovators.

Problem or Opportunity

Recently An Australian company find a copper wire supplier on Alibaba, paid $80K, yet received container loads of sandbags.
The impact on this business is huge. As a result of this, the small business suffered a cash flow difficulty, pre-order canceling, and now have to file bankruptcy.
There are many pains in the international trade industry:
• scammer on the internet,
• inferior product,
• delivery delay,
plus
• language barriers,
• cultural differences and
• legal complexity.
In the past 15 years, when the client finds a supplier on Alibaba and let us do the factory check, 50% of them we don’t recommend to continue further for the purchase order.

Solution (product or service)

Over the last fifteen years, we have helped over 2000 businesses to import from China successfully. Between them, they’ve saved over 20 million dollars.
We won countless business awards, and has accumulated over 30,000 reputable Chinese Supplier, is the only Australian global service partner of Alibaba.
We have developed the unique three-stage importing process.
Based on the product specification, we do
• stage 1 - research and tender,
• stage 2 – sampling and purchase order negotiation,
• stage 3 - production and delivery management,
so that your products can be delivered to your door with quality on time.
With research and tender – we would be able to remove 99% of the scammer
With stage 2 and 3 we would be able to address 95% of the inferior product issue and delivery delay.

Limitation of Our Current Solutions
We are pretty happy with the results we've had so far, and we love our jobs. But we have our limitation:
• Centralized solution, relies on well trained Chinadirect team members. it is a long process and takes about a minimum of 16 weeks to 2 years for the entire sourcing process.
• It is manual and takes a lot of effort to facilitate one transaction. it takes from 150 – 600-man hours per project.
• The cost of our service is ranging from 3K – 10k per project due to labor; Only certain customers can afford our services,
We don't want to help just hundreds of businesses. We want to help millions of businesses worldwide. So we decided to automate our supplier management consultancy with a tool called Frethan.

Competitors

From the supply chain, you can see, Alibaba is focusing on product and supplier marketplace, Amazon is about selling, Tradelens is about digital shipping, Trade community service is about port and customs. Frethan is target at the Chinese Supplier assurance and managing the whole importing process.
There are minimum competitors that have the depth of knowledge and experience that Frethan and China Direct Sourcing brings. Its online international trade software connects the buyer and seller with trustless blockchain technology. It makes it easy to do international trade, especially dealing with a Chinese supplier, and it has more than 30,000 high-quality Chinese producers. We leverage existing services and complement those that are already established (i.e. Alibaba, Amazon). We can provide an almost risk-free importing service with which rivals simply cannot compete.

Advantages or differentiators

20+ years of international trading experience.
30,000 high-quality Chinese manufacturers.
Award-winning team.
Only Australian global services partner to Alibaba.
Vision and plans for building out the business ecosystem.

Finance

The core of the FRETHAN BUSINESS MODEL is a Membership Subscription.
Our expected revenue is set to reach
• $16.1million in 2023 - just in Australia,
• with 17,000 memberships.

our cost includes:
Cost of goods
Sales and Marketing
Product Engineering and Development
General and Administrative

Business model

30 days of free trial; this product is based on the software as a service (SaaS) model and sold by subscription; Certification fees; Commissions derived from trade and default fines.
Expected revenue is set to increase 10% per quarter, reaching $3.2 million in 2021, $9.3 million in 2022, and $16.1 million in 2023 – just focused on Australia.
landed cost calculator app for Shopify merchant for free.
This app is for the importer to use
Landed cost calculator
Freight calculator
Give access to a Shopify account

We use this app as a lead generator
To lead the customer from Shopify, eBay, Amazon, or e-commerce store or even Alibaba.

Money will be spent on

Cost of goods
Sales and Marketing
Product Engineering and Development
General and Administrative

Offer for investor

$982000 USD for 5% equity in the frethan technology, we are willing to sit down and discuss further details

Team or Management

Risks


Inability to access data from supply chain participants:
With any change and innovation comes the risk of a lack of participant engagement. One of the potential obstacles is buyer or seller unwillingness to provide data to input into the Frethan platform. This would evidently compromise the efficacy of the project and the development from the pilot phase to widespread implementation.
In the event that our use case participant and the buyer or seller do not wish to share information, the collaborating parties may have to purchase data. This cost would have to be borne by the collaborating parties and would cause a delay in the development of our pilot and broader implementation of the Frethan.
It would also prompt a review of the commercial model, given the further financial outlay that would be required to bring the project into being. This would raise costs for participants who wish to be part of the Frethan.

Absence of technical capability to deliver project:
Chinadirect sourcing have created the current Frethan platform and showcase to be shown to all potential investors. Should the process of nationwide expansion of the Frethan after the pilot phase be beyond the capabilities of Chinadirect alone, further technical assistance will need to be sought. Naturally, this will incur increased costs, which we will seek to source via investment and/or charging a membership fee to use the Frethan platform.
Requirement to seek and fund outside technical support to deliver project:
Similar to above. This would result in a financial outlay to outsource the task to deliver the project. These costs would be borne ultimately by the consumers of the Frethan platform.
Locked into partner solution which is costly/ built on antiquated tech.
If the chinadirect sourcing importing solution is chosen and is built on inferior technology, this would see a fall in performance and reliability. If the solution becomes obsolete, this would prompt further expenditure to update and improve the user experience. A malfunctioning and inefficient platform could also encourage seller or buyer to withdraw their support for the Frethan. An inability to capture and showcase value for consumers through the Frethan platform may lead to a return to the status quo and the ongoing inefficiencies that plague the supply chain and logistics sector.
Cost of integration and ‘clunky’ upgrades over time as the system/user requirements evolve:
The freemium business model, which is how the collaborating parties aim to attract participants, may be compromised if upgrades and system improvements need to occur regularly. Costs of the system may also rise as new features are added. This is likely to increase costs of joining which may prevent some buyer, seller from becoming part of the Frethan.

Collaborating party withdraw support
While this is unlikely, given our already demonstrated strong commitment as a collective unit, a withdrawal of support would see the remaining parties alter the ownership structure. This may culminate in the establishment of a new company structure for the project and could lead to higher user costs due to the increase in funds needed to maintain the platform.

Incubation/Acceleration programs accomplishment

participation in the activate program of River city lab, fempower Sydney fish burner accelerator program

Won the competition and other awards

on 28th Sep 2020, We won the HK IP hatch challenge, will partner with Panasonic and Nokia
we are the finalist of the innovation awards - my business awards 2019

Product Video

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video