Here’s what you should know today.

1. Chat app Line is developing an AI assistant and Amazon Echo-style smart speaker

A voice-powered concierge service called Clova — short for “Cloud Virtual Assistant” — is the centerpiece of the service, much like Amazon’s Alexa, Microsoft’s Cortana and Google Assistant.

Line has also acquired a majority stake in the Japanese company behind a ‘holographic’ AI service. Vinclu is the startup, and its Gatebox is its ‘virtual robot’ that gives AI a graphical presence in the form of manga cartoon-style female.

But don’t get too excited While an AI might help increase engagement with existing users, it doesn’t seem like a bridge to bring new users into the fold and that is among the key issues Line is currently grappling with.

Read the rest of the story here.

 

2. Luxury brands are becoming big players in ecommerce

The face of luxury buyers is changing. Well-to-do shoppers now expect brands they support to be online. They’ll shop somewhere else if they can’t hit a website.

The average age of luxury shoppers has gone down from 48 to 34-Infinitum Ecommerce agency

McKinsey & Company predicts that online sales of luxury goods will triple in the next 10 years, and that by 2025, the online share of total luxury sales will reach 18%. But the move online happens for individual companies only when those businesses feel their clients are online themselves.

Read the rest of the story here.

 

3. Contrary to rumours, Zalora to double down on expansion in the Philippines

The store, which last month sold a portion of its operations to Filipino conglomerate Ayala Group, expects the new alliance to give it a boost not just in terms of funding for growing its user base, but also co-marketing and other partnerships.

Seeing growth, Zalora intends to stay in the Philippines, contrary to what some reports have suggested. Paulo Campos III, CEO of Zalora Philippines clarifies that its parent, Rocket Internet-backed Global Fashion Group, didn’t sell any of its own stake. What it sold Ayala were new shares.

The fresh funds will be spent acquiring more inventory from fashion brands, creating more exclusive brands, increasing online as well as offline marketing, and expanding logistics.

Read the rest of the story here.

Looking at ASEAN’s current $15 billion online retail sales and 19% YOY growth, the region’s ecommerce potential will continue to rise for the years to come.

Source: aCommerce Data & Research

Aside from the ecommerce opportunity in ASEAN, there are some market characteristics that professionals should be aware of before setting up own ecommerce operations. Understanding these characteristics and obstacles will define the success of future business endeavors.

So how can companies get started and set up a successful ecommerce business? What are the areas to look into before entering ecommerce?

Following this checklist will hopefully help ask the right questions and trigger appropriate initiatives: Read more

Constraints within Vietnam’s underdeveloped infrastructure are not well documented, but that hasn’t stopped the country from continued economic developments and growth in ecommerce.

Raphael Wilhelm and his co-founder Vanessa Santamaria launched SoNice, a new entry to Vietnam’s newest e-marketplace, took time to share with eIQ the challenges with starting a business in the up and coming ecommerce market.

What is SoNice?

The company launched in October 2016 in Ho Chi Minh City enabling Vietnamese designers and makers to scale their businesses as SoNice is capitalizing on the emerging and fast growing sector of local independent brands.

As many merchants on SoNice have little ecommerce experience, the company began to offer services such as content production, brand management and logistics in addition to hosting them on the platform.

Businesses were selling items such as concrete lamps, sketch notebooks and handmade leather wallets on the platform but they didn’t just want another online channel, they wanted someone who could help them scale.

SoNice features over 800 curated products and with a 80% month over month GMV growth since its launch four months ago, activating Vietnam’s smaller brands is working.

Home decor is one of SoNice’s core categories, which taps into Vietnam’s growing property market, where more young people are buying their first apartments and choosing western inspired, modern interiors.

Vietnam emerging from the shadows

Before 2015, Vietnam’s market was often overlooked by foreign investors and only two main companies were offering opportunities for brave investors, Dragon Capital and Vietnam Asset Management Limited.

During that time, countries such as Indonesia and India were showing investors that Asia was more than China, these two countries in 2014 accounted for 21% of the world’s population and 3.8% of global GDP together, and shadowing Vietnam’s potential.

But the tide slowly turned and Vietnam’s investment potential continues to grow. In 2016, the country overtook Indonesia and Thailand as ASEAN’s most attractive market for US firms – 40% of them cited Vietnam as their priority market in the region.

In that same year, ecommerce revenue also increased to $5 billion, accounting for about 3% of total retail trade and services revenue. The number could surge within the next few years as the government plans to invest $111.6 million from the State budget into the ICT sector by 2020.

With a young population, increasing urbanization and 44% Internet users in 2015, the country is steadily becoming an attractive market for businesses.

However, the ASEAN market comes with its own obstacles SoNice co-founder Raphael experienced firsthand. He details what new companies should look out for:

Overcrowded B2C space

Marketplaces such as Tiki, Sendo and Lotte are some of the most well-known marketplaces among the Vietnamese in addition to the region’s most popular marketplace, Lazada. This means that new businesses trying to capture market share would be entering an already crowded battleground.

Raphael advises,

“Understand the playing field first. It would make more sense as a smaller, new player to offer a more select and strategic product offering on your platform to increase the chance of survival.”

He notes that Vietnam’s vertical ecommerce market is still relatively young. Notable startups such as WeFit and Foody are good examples of successful companies that saw opportunities in their untapped fields by offering something unique to consumers.

“For entrepreneurs poised to enter Vietnam, think about what is lacking, and go from there.”

Challenges specific to foreigners

As a European business owner in Vietnam, the process of opening a bank account took 2X longer than it would for a local.

“The quality of financial services is also quite low in Vietnam. Not only did it take me a few hours to open a bank account, I was also required by the bank to pay a deposit to apply for a credit card,” comments Wilhelm.

For 100% foreign owned businesses, it will be a challenge to overcome the country’s bureaucracy. Wilhelm recommends hiring at least two different lawyers in Vietnam to help navigate the 5-6 month long process of launching your own company, whereas for locals, the process simply takes five days.

Vietnam’s unbanked population

Although it’s becoming less common, some people still pay for their houses using gold and the reason why Raphael says 90% of ecommerce transactions in Vietnam are paid with cash-on-delivery (COD).

According to the World Bank, 70% of Vietnamese are still unbanked. However, with 38% of the population owning a smartphone, payment companies and banks have the potential to access more clients and increase financial sophistication amongst the Vietnamese.

Low trust in logistics 

“The postal services in Vietnam are not yet up to an international standard, which can sometimes cause delays in delivery, making it hard to persuade people to shop online,” comments Raphael. “We use motorbike riders in Ho Chi Minh City and 3PLs to deliver to other cities like Hanoi and Danang.”

SoNice’s best-selling products range from Home décor items such as canvas art prints and Edison Desk Lamps to hand-crafted notebooks – the right size for motorbikes making delivery cost is also favorable.

“While logistics are a challenge, the price ranges between $1-2 to take your customer’s parcel from one district to another.”

Winning over VCs

According to Raphael, there’s a lack of funds and VCs that solely focus on Vietnam. Instead, startups often have to pitch elsewhere to raise funding, commonly to outsiders who aren’t quite convinced of the market potential.

However, it seems that overseas VCs are taking notice. In 2016, Vietnam saw two dozen startups receive funding from seed to Series C stages with the help of Hanoi based ed-tech startup Topica’s Founder Institute incubator.

For Raphael, interested investors are advised to spend time with local entrepreneurs and get to know their way around the city before committing to an investment opportunity.

“The culture here is so distinctive that it requires an understanding of the locals, of how things are done and these two require time and effort,” says Raphael. “The market can’t be pitched in 5 or 6 slides, it’s important to come with an open mind.”

Although the fundraising process takes time, the average deal size in Vietnam is relatively small, meaning that investors don’t need to commit to a major investment to make an impact. They could easily inject $500,000 and it would be considered a significant contribution, unlike funding rounds in Singapore or Indonesia where numbers are in the millions.

The Vietnamese mindset

In general, Vietnamese people have more to spend compared to even two-three years ago. When Raphael arrived in Ho Chi Minh City in 2012, the landscape was completely different.

“After Starbucks opened shop in Vietnam, a wave of boutique coffee houses popped up and young people also started to invest more in their first apartments. Vietnam is slowly opening up room for more experiences, shopping and consumer-centric verticals,” remarks Raphael.

The Vietnamese government has recently announced Resolution 35, an initiative to help launch one million enterprises by 2020, double the current number. The State is ensuring equal access to funding sources, land and natural resources among enterprises, regardless of their types and economic sectors and adopt policies to back SMEs, startups and creative businesses.

Vietnam: Is it worth it?

“Despite the hurdles in Vietnam’s growing ecommerce landscape, the challenges in payment, logistics and the law exist because the ecommerce landscape is so new, not because Vietnam is not suitable for ecommerce,” says Raphael.

SoNice’s growth in less than six months speaks for itself and Raphael is a passionate advocate for Vietnam’s potential.

“By coming in now, startups have a higher chance of succeeding but they must differentiate themselves from what’s out there. Deep rooted challenges in Vietnam present companies with lots of opportunities,” said Raphael.

Raphael (center) with the SoNice team in Ho Chi Minh city

Here’s what you should know today.

1. Singaporean insurtech startup PolicyPal secures seed funding from 500 Startups

PolicyPal, which launched in April 2016, displays all your existing insurance coverage plans on a single screen. It’ll tell you when to renew specific plans as well as when a premium payment is due.

It will be using the fresh funding to strengthen product development efforts as well as to enter the Monetary Authority of Singapore (MAS)’s fintech regulatory sandbox.

Read the rest of the story here.

 

2. The Amazon S3 outage is what happens when one site hosts too much of the internet

The problems seem to stem from trouble with Amazon’s cloud storage service S3, which Amazon confirmed is experiencing “high error rates,” particularly on the East Coast.

 Corporate consolidation in tech has implications for competition—but it also affects the resilience of the internet itself.
Amazon has multiple data centers in case one goes offline. But Amazon occasionally runs into problems that knock out services for an entire region. When that happens in the eastern region, its most popular, it tends to take down large swaths of the net.

Read the rest of the story here

3. Recommended Reading: Alibaba’s “new retail” model: A better omni-channel experience for luxury consumers?

Over the past year, Alibaba has aggressively acquired sizable Chinese retailers of different types. It has formed partnerships with supermarket retailer Bailian Group, high-end retailer Yintai Group (owner of Intime Department Stores), electronics retailer Suning Commercial Group, and several others.

Alibaba’s “new retail” model could entirely transform the retail landscape in China if it succeeds. Luxury brands could potentially benefit as this new model can provide them an opportunity to offer better omni-channel experiences to consumers.

Read the rest of the story here.

 

Here’s what you need to know today.

1. Thailand’s Box24 is moving beyond laundry service

Through Box24, customers simply had to deposit the laundry, make a payment, track the status of their laundry through the mobile app and pick-up when its ready.

Founder Bond Thaiyanurak saw potential in his startup, and soon looked to explore into other verticals under the Box24 brand.

For ecommerce delivery, Box24 partnered with leading retail chainsTesco and BigC to launch a service called ShopBox24. For parcel delivery, it partnered with delivery company Kerry Express to deploy MoveBox24.

Box24 will also be deploying personal storage services with Kerry this year.

Regionally, there are already a handful of ecommerce lockers available, but Box24 differentiates itself by building hardware in-house. “We have a very different business model from other players — we are selling the lockers,” said Thaiyanurak.

Read the rest of the story here.

 

2. Pypestream raises $15M series A for its customer messaging platform

 Pypestream has expanded to offer messaging capabilities in businesses’ own apps and elsewhere. This goes beyond just sending text and images — users can also make payments, schedule appointments and send files directly from the messaging window.

“Brands thought, or agencies think, that people actually want to have general conversations with businesses and brands that aren’t specific to utility or aren’t specific to a need,” founder Smullen said.
“Just as a consumer, I don’t need to have a general conversation with Nike — but if my sneakers are broken, then my conversation with Nike is very necessary.”
Read the rest of the story here.

 

3. SCB Fintech Forum reveals key industry trend in Asia

According to key panelists at SCB’s fintech forum held on 28 February, agriculture tech and healthcare will become more prominent this year. We should be seeing the integration of big data which will help drive more movement within agriculture, including new digital platforms that will fund agritech projects.

Doctor-on-demand will also be introduced on a larger scale in Asia.

Read the rest of the story here.

 

4. BCBG Max Azria files for bankruptcy

Fashion house BCBG Max Azria Group LLC has filed for bankruptcy protection , the latest casualty in the struggling U.S. retail sector, as shoppers abandon malls in favor of internet shopping.

The company is taking steps to close its freestanding stores in Canada and consolidate its operations in Europe and Japan, in addition to the 120 retail stores closed as part of the restructuring efforts.

The re-shuffling will allow the company to hone in on customer shopping patterns, selected retail locations and ecommerce, a spokesperson for BCBG said in a statement.

Read the rest of the story here.

Welcome to the first of March, read on to see what you need to know this morning.

1. New tax on ecommerce in Thailand to be introduced in April

The Revenue Department says it will enforce a new law to tax cross-border ecommerce transactions by April, a move that could hinder the growth of the sector.

The development by the tax collection agency is intended to increase tax collection efficiency, particularly for fast-growing cross-border ecommerce transactions.

The Revenue department will apply e-tax invoicing via email for companies with annual revenue of less than $85,7600 (30 million baht) to facilitate small ecommerce merchants in processing VAT issues. It plans to launch a full tax invoicing system for large enterprises in the near future.

Read the rest of the story here.

 

2. Alibaba calls out China to be harder on counterfeiters 

At a press conference, Alibaba representatives said that China’s current anti-counterfeiting laws are too ambiguous, “letting products sip through the cracks along the manufacturing chain.”

Last year, while the company fought and ultimately lost the battle to stay a part of the International Anti-Counterfeiting Coalition, its team came across almost 4,500 counterfeiting leads, but had just 469 cases and ultimately just 33 convictions because of loopholes in the laws.

The latest developments in Alibaba’s anti-counterfeiting saga may indicate that, down the line, there will be further support from outside parties to legitimize the products sold on its platform.

Read the rest of the story here.

 

3. Recommended Reading: The future of shopping is more discrimination

This new stage of retailing—a stage that harks back to 18th-century strategies of price and product discrimination—is only beginning.

Merchants, left to their own interests and in response to hypercompetition, will create a world where what individuals experience when they shop will be based on data-driven profiling.

At present, shoppers have little or no insight into the profiles and how they are used

Read the rest of the article from the Atlantic here

 

4. Community Chatter: Uber CEO Travis Kalanick filmed during a heated argument with Uber driver

The video shows Kalanick getting angry at the driver, Fawzi Kamel, who complained about the company decreasing prices for its UberBlack service. Kalanick claimed that wasn’t true.

Upon the release of the video, Kalanick issued an email apology to his staff at Uber.

It’s clear this video is a reflection of me—and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.

It has been a rough couple of weeks for Uber, following sexual harassment claims.

Read the rest of the story here.