French startup Zlio.com, a service that enables any Internet user to start a virtual store, has just launched in the US and also has plans for a UK version. It's a free template-based system and you select the products you want to sell from a list of pre-approved merchants. There are 75 merchants in France, 25 in US. At this time you can't sell your own products, but that functionality is being worked on. Example shops include a Woody Allen shop and a kids sports store. Note that we first mentioned Zlio back in September, in our Top Web Apps in France article.

The competition

More than 35,000 shops have been opened in the last 5 months in France and Zlio is hoping for similar success in the US. Right now they have competition in the form of MyPickList, a slick widget-based online shopping app. Loomia is similar. Also there is aStore from Amazon (only amazon products) and Shoplinc from Chitika (for people who already have a website). CafePress.com is kind of in this market too, although their focus is on customizable goods and services.

What I like about Zlio is its straightforward positioning, which they've only recently changed. Zlio.com originally opened in November 2005 in France as a "recommendation service". Their positioning at that point was: "Recommend your favorites products to your friends and make money". Zlio CEO Jeremie Berrebi told me they got "thousands of subscribers" but it was very difficult to manage and maintain - users would recommend once, 2 times, 3 times, but after seeing that they only made a few Euros, a lot of users didn't want to use the service anymore.

So in September 2006 Zlio totally changed its market positioning - now Zlio is a service that "allows any internet user to create his own online shop even if they have nothing to sell."

Usability

Zlio has a nice wizard-type sign-up process. It took me just a few minutes to sign up, select a template, and 'open' my store. The control panel for adding products is slick and easy to use. My one complaint is that I couldn't see any way to add bulk products, or a whole category. I had to individually add each product, which is time consuming. It would be great if I could tell Zlio to add "all microsoft office products" or "all Apple iPod products"; even better if I could say "add any Apple iPod product that has at least 4GB of memory" etc.

There are also some useful promotional tools, such as creating a video to show on "Zlio TV" and a widget to display on your blog. There's also an area called "boosting tools", which includes a wizard to help you copy your store into your blog.

Business Model

Zlio has two business models: CPA & CPC (in France). For the US launch, it is CPA only for now - but CPC will be introduced in the US soon. The CPA model means that when someone buys a product through a shop, the shop owner makes money via a commission (they are paid through PayPal). The company is based in France, but half the team is in Israel and they are planning to open a US office in the coming months.

Conclusion

All in all, it's a nicely designed app and very well positioned in the market. It kind of reminds of Swickis, which are custom search engines. Having a niche custom online shop will be an attractive (and possibly profitable) proposition for a lot of people. It nicely plays into the need for specialized and focused online properties, which are increasingly the success stories on the Web. In other words, if I am a Woody Allen fan then what better way to shop for his products than on a dedicated Woody Allen shop? So I like what Zlio enables and I'll be watching to see how much uptake it gets. Also I need to work on that R/WW shop! :-)