Here’s what you need to know today.

1. Gobi Partners sells stake in Malaysian startup Hermo to Tokyo-listed Istyle

enture capital firm Gobi Partners has sold its stake in Malaysian ecommerce startup Hermo to Japanese company Istyle.

Hermo works directly with brand owners and distributors to sell affordable cosmetics and skincare products to women, while offering fashion insights and beauty tips.

 Gobi didn’t disclose the details of the deal, except that it exited the company for an internal rate of return of 91 percent. Gobi said it decided to strike a deal with Istyle seeing the latter’s track record in creating successful international companies and its strategic positioning for the North Asian market.

Read the rest of the story here.

2. Spotify may have plans to launch in Vietnam and Thailand

Two sources close to the company told TechCrunch that the firm is working to launch its music streaming business in Vietnam and Thailand, two countries with a combined population of over 160 million.

>In a tell-tale sign, it is hiring for “music editor” positions for both Vietnam and Thailand. Both jobs are based at the company’s Asia Pacific headquarters in Singapore, but the creation of that role is a common pre-cursor to a full country launch.

We reported last year that the Swedish firm was looking into the possibilities in India and that remains the case, albeit that so-called “easier” markets like Indonesia, Japan, Vietnam and Thailand have been prioritized since then.

Read the rest of the story here.

3. Amazon patents shipping label with built-in parachute for dropping packages from drones

The online retail giant this morning received a patent for a shipping label with a built in parachute to help packages make a soft landing when dropped out of the air by drone or other airborne craft.

According to the newly issued patent from the U.S. Patent and Trademark Office, the parachute label could look and act just like any other shipping label, but underneath is a system of cords, a parachute, a breakaway cover and possibly a harness to keep everything in place.

The package could also be loaded with sensors to make sure the package hits its landing zone and a shock absorber in case the cargo is coming in a little too hot.

Read the rest of the story here.

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1. Singapore government and SGX launch their drive for more tech IPOs

The Singapore Exchange (SGX) and the Infocomm Media Development Authority (IMDA), the Singaporean government’s main ICT and media industry regulator, have today signed a memorandum of intent (MoI) aimed at easing the path to IPO for local and foreign tech companies in the country.

Under the terms of the MoI, SGX and IMDA will work together to lower barriers faced by tech companies seeking to access Singapore’s public and private capital markets.

The MoI will see SGX and A@IMDA collaborate to help accredited companies source pre-IPO funding and prepare them for eventual listing. They will also assist accredited businesses in bringing in accounting and legal expertise so that they can be IPO-ready in a shorter timeframe.

Read the rest of the story here.

 

2. Omise to raise $19M in first cryptocurrency sale

Four-year-old Omise has raised $17.5 million from investors, including SBI, Sinar Mas and Ascend Group, but now it is turning to cryptocurrencies and the blockchain for its next move.

The company is looking to raise up to $19 million through the sale of its own coin — OMG, short for Omise Go — which will be used to power a network that lets users transfer money and make payments without the need for a bank account or high service fees.

The core aim is to encourage financial inclusion in emerging markets by creating a platform that other companies beyond Omise can use.

With Omise Go — and the “OMG” coin — Omise wants to remove even more of the boundaries by removing even the need to own a bank account. Omise plans to outsource its mobile wallet technology, and develop a decentralized payment system using the blockchain and OMG, which Ethereum’s ERC20 token standard.

Read the rest of the story here.

 

3. Amazon’s Stock Price Hits $1,000

Amazon’s share price briefly topped $1,000 in early trading on Tuesday, a symbolic milestone for the company. Amazon’s stock is up sharply over the last three months, the latest surge in a climb that has lasted two decades.

Among the many things Amazon has going for it:

• After years of unprofitability, it is reliably turning in profit.

• Long the runaway leader in e-commerce, Amazon has tens of millions of subscribers for its Prime service.

• The company is getting serious about drone delivery.

• All this, and it is adding jobs — this year, Amazon said it would add 100,000 jobs to meet demand on a number of fronts.

And those are just headlines from the last six months.

Read the rest of the story here.

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1. Vietnam’s version of Tencent, VNG eyeing US IPO

Vietnam-based internet company VNG Corp has signed a preliminary deal with US stock exchange Nasdaq to explore an initial public offering. It could be the first overseas listing by a Vietnamese firm. No details about the IPO plan were revealed except that Nasdaq could be helping VNG prepare for the listing.

VNG, one of Southeast Asia’s very few unicorns, is a competitor of Sea (formerly Garena), which itself is reportedly considering an early-2018 IPO in the US. Both companies have taken a cue from Chinese tech giant Tencent, originally focused on games before moving to areas such as digital content, chat, payments, and ecommerce. VNG’s chat app Zalo is Vietnam’s version of Tencent’s WeChat.

Read the rest of the story here.

 

2. Thailand’s GoBike closes series A round with $4.8 million, eyes Bangkok’s motorbike market

Bangkok’s GoBike recently closed a series A round worth $4.8 million, with the investment coming from backers including private equity firms, family trusts, and high-net-worth individuals, mainly from east Asia and Europe.

Among the initial obstacles to overcome would be convincing Bangkok’s extensive community of moto-taxi drivers that using the app – and swapping cash-in-hand payments for online wire transfers – would be good for business.

“We have been doing things to try to move drivers’ mindset to cashless,” says Lian Wah Seng. As drivers are much more used to receiving cash, the company tries to convince them of the benefits of opting for other payment options.

The results are encouraging. “Some drivers have said to us: ‘I always thought I needed that cash in my pocket, but now that it goes straight into my bank account, it’s nice because I’m spending less!’,” Lian shares.

Read the rest of the story here.

 

3. AmazonFresh launches pick-up point in Seattle

The service is free and exclusive to the company’s Prime members, who can reserve a time for pickup with as little notice as 15 minutes and no minimum order. Amazon employees “carefully select groceries,” according to the announcement, bag them and bring them out to customers waiting in their cars at specially-designed Amazon Fresh stations.

Amazon helped stoke a thirst for swift delivery that many consumers never knew they had, and now curbside pickup appears to be heading to a similar level of competition among grocery retailers.

Still, in some ways this is a curious move, considering that grocery customers aren’t exactly clamoring for pickup services, according to Matt Sargent, senior vice president of retail for Frank N. Magid Associates. The consulting firm’s research found that only about 28% of grocery customers say that the ability to order online and pick up in-store is important

Even Amazon is clearly waiting to see how the pickup service goes. Sargent said it’s important to keep in mind that, unlike many other grocers, the ecommerce giant has the time and resources to experiment.

Read the rest of the story here.

Company Factsheet:

  • Launched: 2013 (Operations in Thailand began in 2014)
  • Funding: Bootstrapped until Series A, US$15.5 million in total funding to date, investors include: Tripadvisor
  • Markets: Thailand (Bangkok, Pattaya), Singapore, Malaysia (Kuala Lumpur), Hong Kong
  • “A restaurant always makes more money with eatigo than it does without,” says Cluzel.

Funny how a company that raised over $15.5 million in funding and is backed by one of the largest names in travel, TripAdvisor, all started with a graph.

eatigo co-founder and Group CEO, Michael Cluzel, an economist by nature, shared with ecommerceIQ that he was determined to create a business that would be sure to add value to the market.

“What I noticed were the inefficiencies of airlines, hotels and restaurants,” shares Michael. “The global sit-down restaurant market is worth $2.6 trillion but restaurants operate at only 30% capacity and was the only stream being underserved, whereas hotels have always practiced yield management and airlines have to run at 80%.”

So how do companies fill empty airline seats, hotel rooms or unseated tables?

Discounts.

By anticipating or modifying consumer behaviour – in this case, eating outside the typical meal times to save money – returns that would otherwise not exist can be maximized. Enter eatigo, a restaurant reservations platform that offers discounts at off-peak hours to fill otherwise empty establishments.

Creating an ‘exportable business’

To date, the company has seated over 4 million people at 1,000 restaurants across the region and operates in Thailand (Bangkok, Pattaya), Singapore, Malaysia (Kuala Lumpur), and most recently, Hong Kong.

eatigo has also accomplished something not many startups in the region can say,

“Our LTV is bigger than our CAC so we have positive unit economics.”

“Every month I can decide if I want to invest in growth or be profitable, it’s a healthy business at its core,” comments Michael. “I wouldn’t invest my own money otherwise.”

But like most success stories, it didn’t happen overnight. The app actually had zero bookings for 2-3 weeks when it first launched.

“But it was fine, there is no shortcut to experience.”

“It took us two years to understand exactly what we’re doing to allow us to scale. We didn’t rush into it at all,” says Michael. “And that’s why the challenges that face us now are purely executional.”

“Think of an empty table as a perishable good – fixed costs are incurred, an electricity bill is incurred and contribution to an empty table is zip.”

By incentivizing patrons and partners alike to give some and get some, restaurants – the fixed asset owners – win, the consumer wins and the startup itself wins. There is profitability on every table.

eatigo app. Source: eatigo

Michael, an avid user of the app himself, says eatigo is open to partnering with anyone from McDonalds to Michelin, the only factor being the restaurant needs to have a good reputation and healthy foot traffic. Upcoming partners in Thailand include The Coffee Club and Wine Connection.

His steps to obtaining an exportable business? A lot of trial and error and consideration of these factors:

Market size/potential

  • Are we entering a sophisticated market or do we need to educate?

For an emerging market like Thailand, there isn’t much competition but penetration and understanding of ecommerce is quite low so it needs education. Sophisticated markets like Singapore means consumers are comfortable with paying with credit card online but is crowded.

Another question important to eatigo when looking at market potential:

  • Will the demographic be comfortable on mobile? 95% of bookings are made through the mobile app.

Product/market fit

  • All of Southeast Asia has a discount affinity and so,  

“You can’t make a non-discounted booking on eatigo, users will always pay at minimum 10% less and our partners must offer 50% off at some time of the day.”

  • Two eatigo alpha markets – Thailand and Singapore – both have an ‘eating’ out culture and spend a higher percentage of their disposable income on eating out than Germany.

The company also discovered interesting quirks about each market and tailored its UX to be widely usable across the region:

  • In Thailand, users like to browse, they don’t like to fill out forms or click through menus and they respond best to photos of food.
  • Singaporeans are cerebral and typically know which restaurant they want to dine at and they respond best to photos of the venue.
  • Malaysians are more impulse bookers and Hong Kong users like to dine in groups.
  • But across the different Southeast Asian markets, reservation habits aren’t too dissimilar as eatigo data reveals.  

Regulatory/legal framework  

Competitive situation

  • “The delivery market is a red ocean whereas total eating out spending is 8X bigger than delivery,” says Michael.

Startup ecosystem

If you look at companies trying to scale in Southeast Asia, it’s all flags, no troops. They open offices everywhere but 90% of their revenue comes from HQ.   

As the company grows, professionalization of the company – getting more efficient in processes and simply “growing up” as a business – is vital to sustainable growth. The founding team also has an average age of 40 and have all managed sizeable businesses before.

“We’re like a teenager now, we’re not nobody but we’re not a somebody yet – we have traits from a corporate business but corporate processes don’t work in a startup,” says Michael.

KPIs are a) time to market and b) time to meaningful revenue

“eatigo is not a marketing company, we’re a bottom-line company that is able to differentiate yielding and marketing.”

After only two months, eatigo shares that Malaysia and Hong Kong are hitting reservation levels that took Thailand and Singapore over one year to reach.

The new markets after two months already make 15% of total revenue.

But no company is without its own set of challenges:

“We’re like Uber and AirBnB in the way that we are the interface, it’s not a problem of demand, the challenge comes with the supply. The user wants the discounts so we need to deliver a section of good merchants. We will never have 7,000 merchants in Bangkok because  it’s not about ubiquity and once we hit 800-900, we begin changing bad ones and good ones,” says Michael.

“I can always invest money to get more users but there is no shortcut on inventory.”

A crowded food space

In the past few years, a number of food commerce startups have emerged to capture the growing appetite of Southeast Asia’s booming population. They include Offpeak, Hungry Hub, foodpanda, UberEats, etc. to name a few but eatigo isn’t worried, the company has never been about niche, it’s about eating out, relevant to everyone everywhere.

“eatigo’s moves have never been influenced by others – we do what’s strategically in our own interest. People think it’s easy to just copy business models but you can’t look from the outside and know our playbook.”

And what about the boom of delivery apps driving the ‘eating in’ culture?

“Delivery is need based and eating out is opportunity based – let’s go out because I’m bored and I want to be with friends,” explains Michael. “When people decide to eat, the choice to eat in or eat out has already been made, eatigo is there to help them discover where they want to go.”

“Delivery also creates strain – they tend to happen during peak hours when the kitchen is already full. 95% of our traffic happens when kitchens are empty.”

What’s on eatigo’s plate?

“Finish our roll out to be in 6-7 markets, prove scalability, establish ourselves as a dominant regional player and move into next round.”

“We’re in the business of changing human behaviour and to succeed, you need either a lot of time, a lot of money or you need a good reason,” says Michael. “We have the reason.”

Here’s what you need to know today.

1. Fingerprinting for SIMs made mandatory in Thailand

All mobile users must participate in the online fingerprint ID system for new prepaid and postpaid mobile SIM card registration, or they will not be allowed to use mobile service. The automated fingerprint registration system, implemented by the National Broadcasting and Telecommunications Commission (NBTC), is set to start from Jan 1, 2018.

The fingerprint ID system is aimed at creating greater security and benefits for mobile users, especially mobile banking service.

The number of fingerprint registration machines will be delivered to mobile operators nationwide, with 30,000 machines targeted by year-end. The NBTC is focusing on the three southern provinces in order to protect against bombings triggered via mobile phone signals.

Through a fingerprint enrolment process, mobile operators will scan each person’s fingerprints, which will stored on the national ID card database and the NBTC’s secure database.

Read the rest of the story here.

 

2. Lianhua Supermarket soars on Alibaba deal

Supermarket and convenience store operator Lianhua Supermarket Holdings jumped as much as 34 per cent during Monday morning trading after Alibaba took a stake in the company, the latest quest in a series of brick and mortar investments.

Lianhua’s controlling shareholder Bailian Group, which agreed in February to partner with Alibaba to develop new technologies and integrate logistics and payments, said Alibaba will acquire more than 201m shares in Lianhua, or an 18 per cent stake, from online grocery Yiguo.com.

Alibaba also has investments in offline players including retailer Sunning and white goods maker Haier.

Read the rest of the story here.

3. Recommended Reading: WeChat is eating the Chinese internet, and that’s not a good thing

The more widely-used WeChat becomes, the more difficult extricating oneself from the platform becomes.

In a world where most Chinese internet interactions happen through WeChat’s platform, Tencent gains a disconcerting level of control over everything from business to entertainment to public discourse.

In this hypothetical WeChat world, if the entire system ever went down – imagine Tencent itself was hacked, or simply pushed a faulty update – Chinese internet commerce itself would come to a grinding halt.

Thoughts?

Read the rest of the story here.

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1. Singapore’s Vulpes launches Myanmar-focused tech VC fund

Singapore-based Vulpes Investment Management Pte Ltd has announced the launch of a Myanmar-focused venture capital (VC) fund to invest in early-stage technology companies.

The new entity, called Vulpes Innovative Myanmar Investment Company (VIMIC Limited), will make seed and Series A investments, according to a company statement. “We are starting small, and we will grow our assets under management as the start-up community continues to mature in Myanmar,” said Field Pickering, director of VIMIC Limited.

VIMIC has already made two seed investments — one in logistics startup KarGo and another in Chate Sat, an online marketplace that connects businesses with freelancers.

Read the rest of the story here.

 

2.  Alipay launches free health insurance service for users

Alipay has launched a free health insurance service to allow users under the age of 60 a certain amount of insurance coverage every time they make a payment with their Alipay Wallet.

The service is in partnership with Taikang Insurance to allow users to accumulate their free insurance coverage until it reaches a capaity of RMB 2,000. Users can activate the service by clicking a link, “immediately receive”, in the Alipay app.
Alibaba’s new move has revealed its ambition to grab market in China’s booming online health insurance market, and ups the ante in its ongoing battle for dominance with WeChat Pay.

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RecomN.com, the trusted platform for people planning their home improvement project, has rebranded itself to Recommend.my.

In addition, the company now has a directory-like feature on its website, with over 50,000 photos of completed works from top-rated companies across Malaysia. These pictures cover interior design and renovations, kitchen designs, wardrobe designs and more.

The company released a statement:

The original website allowed customers to get competitive quotes from trusted service professionals. However, we’ve realized that there are customers who are still browsing and researching, and are not ready to hire yet. This new feature will allow them to get inspired by ideas and educated about materials and pricing, before hiring the professional who can deliver the job.

Read the rest of the story here.