I love meeting startups who are making a real impact on the factory floor. While Shein applies a data-driven approach to improving efficiency in apparel manufacturing, Pacdora is doing the same for packaging from design to production.
Packaging seems primitive and pretty removed from tech – and that’s why there aren’t many competitors for Packdora – yet. But the odds are great. In the year In 2019, McKinsey estimated that the global packaging industry was worth more than $1 trillion thanks to a combination of factors such as the growth of e-commerce and changing consumer expectations. Above all, it is an industry ripe for technological innovation.
The traditional life cycle of packaging is very inefficient. The graphic artist may take a few days to design the design and may take a few days to discuss with the customer before finalizing the diet – folding the 2D diagram and cutting the box for 3D – later he will be told by the factory that the measurement will not add up and the requested colors and materials will not be available. This back-and-forth prototype could take weeks before it goes into production.
“This is because most designers have no real-life manufacturing experience and are drawing things that are not useful for the factory,” Xianfeng Wang, founder and CEO of Pacdora, told TechCrunch.
To bridge the gap between designers and manufacturers, Wang’s team created Pacdora, which is like Canva plus Figma for packaging. The platform offers thousands of packaging templates for all kinds of products, from shipping boxes and coffee bags to lotion bottles and yogurt bags. With a click, designers can switch between 2D layouts and 3D-rendered mockups. Any adjustments to the appearance are automatically applied to both modes, freeing designers from spatial visualization challenges.
Powering the automatic 2D-3D conversion is Pacdora’s proprietary algorithm, which took the team six months to develop, Wang said.
The platform (Figma) allows the client to see the design in real time and give feedback, which further accelerates the project cycle. The collaboration feature is available on the Chinese version of Pakdora and will be launched later on the global platform developed by AWS.
Packaging is also notorious for contamination. Take a look around and you won’t be surprised how much packaging there is, from bubble wrap to plastic container cupcakes for your Amazon order. This is the visible part of the waste generated by the industry. Normally, factories are only willing to take large orders – that is, at least tens of thousands of units – as a result of starting a printing press. If the production rate is too low, the machine often ends up idle and the factory runs at a loss.
“So many customers are forced to order tens of thousands of packs even though they know they can’t sell that much,” Wang said.
The flexibility in traditional manufacturing has failed to meet the growing demand for product customization. Instead of sticking to the same bottle look, beverage makers are promoting brand collaborations or seasonal packaging, for example. Brands now want to order 500 custom wraps instead of 10,000 standard ones. Another major service of Pacdora is to solve this imbalance.
“The beauty of the Internet platform is that we can group orders of the same low volume and place a batch order,” says Wang. Factories lower production costs, while brands pay for mass production and eliminate inventory waste.
Pacdora started its printing service in China, connecting designers with third-party manufacturers, and is getting its hands dirty by setting up its own production line to make prototypes. “We want to ensure quality control. We only place orders with factories after our customers approve samples,” says Wang.
The company’s freemium, Canva-like design platform enjoys 80% profit. The supply chain side of the business, which works to consolidate orders, has a comfortable 40% margin compared to 10% for traditional manufacturers. Pacdora has amassed 1.5 million registered users this year with revenue estimated to exceed 10 million yuan ($1.37 million). In August, the company raised $8 million from investors including Hearst Ventures, GGV Capital and Sequoia Capital China at a $110 million valuation. It has about 110 employees, mostly in China.
Like many other SaaS startups originating in China, Pacdora is excited to expand into more mature markets where US businesses in China are willing to pay for software that helps them cut costs and increase revenue, but the SaaS market is still years behind. In the year According to a November 2021 report by Deloitte, US SaaS penetration in China was only 28%, compared to 58% in the US.
Startups outside of China are showing growth. Several months after launching the global version of its design platform, Pacdora is generating between $200,000 and $300,000 a month, with the United States, United Kingdom and Australia being its biggest markets. It took the company three years to reach that level of revenue in China.
While it doesn’t currently offer manufacturing services to overseas customers, Wang sees the future of connecting Chinese factories with international designers because of the country’s price advantage: a box that costs one yuan to make in China easily costs seven. To make more time or one dollar in America.
