Southeast Asia is undeniably mobile first and home to 854 million mobile subscriptions – the number of active mobile connections actually exceeds total population by a third.

And this is where Rebonics comes in. The holdings company based in Singapore owns second hand mobile marketplaces in Thailand (Mekaaa) and Indonesia (Laku6) to capture the growing demand for smartphones.

To understand more about Southeast Asia’s obsession with mobile, eIQ catches up with Mekaaa’s Head of New Market Expansion, You Teck Lam and Adirut Nithilerdviwat, GM of Thailand Operations.

Why used mobile phones?

“The idea for Mekaaa and Laku6 was born from the realization that Southeast Asians are very driven by the status of a mobile phone as it improves their quality of life,” comments You Teck. “Everyone has a mobile phone, but the emerging middle class cannot necessarily afford every upgrade.”

Mekaaa.com is a month old price comparison website that allows users to check the average asking price for a second hand Samsung or iPhone being sold on the marketplace. Browsers can then “buy” through the company’s Facebook page or LINE account.

Source: Mekaaa Facebook page

“For used products, it’s difficult to have a proper price comparison. Everyone knows how much the new iPhone 7 costs, but when it’s an older model, the lines become a bit more blurry,” says You Teck. “Our in-house algorithm calculates the average market price on C2C websites from a thousand sellers that are selling that day so they know they are getting the best deal.”

The website also allows users to trade in their old mobile phones to the Mekaaa office in Bangkok to obtain a discount for another product on the platform.

Launched in 2015, Mekaaa’s Indonesian counterpart Laku6 shares the same browsing functions, but allows users to buy directly through the website. 

It’s no surprise that price-sensitive Southeast Asian consumers would want access to a faster phone with more features.

Tackling a secondhand gray market

The duo noticed that many secondhand electronics purchases were happening offline at Bangkok’s MBK department store, well known for its wide selection of cheap electronic gadgets, games and underground DVDs.

But in an unregulated market, it’s often difficult to know how much a used item should cost.

“A lot of sellers increase their prices so the entire secondhand market has inconsistent price points. Not only do we bring the entire exchange online, we introduce dependable pricing as a form of regulation,” says You Teck.

Approximately 70% of Mekaaa’s products are sourced from MBK. The remaining 30% is from consumers themselves.

“Does the value proposition that we offer resonate with consumers?” says You Teck. “This is what we ask ourselves when observing each market. It’s important to any business, and a question that has led Mekaaa to a better understanding of Thailand’s consumer market.”

In Indonesia, Laku6 operates under the same principle, but currently, Indonesia is a larger consumer market for the company. According to You Teck, the Thailand team is currently trying to reach the same level of penetration here with Mekaaa.

Same concept, different strategy

“The idea from Singapore was that each country and team should have full localized control because who better else understands the market?,” says You Teck. “This is why we chose to have two separate names, because they are ultimately two different products.”

Localized knowledge means that Mekaaa knows where to source the products from such as stores in MBK.

To You Teck, this is one of the most interesting things about Thailand’s markets – making the secondhand mobile phone network transparent to help offline sellers offload their inventory to a new audience.

Although the concept is the same, the strategy varies in Indonesia to attract more potential buyers.

“Laku6 has an offline partnership with Samsung, so if a buyer is looking to buy a newly released model but can’t afford it, they contact us and we pick up their phone, then they pay a bit more to upgrade to a newer model,” says You Teck.

For example, a Samsung S6 Edge user can trade in their phone and top-up $376 (4,999,000 IDR) to get a brand new S7 Edge, where full price is $790 (10,499,000 IDR).

Majority of online sales and trades for used-items in Thailand are happening on C2C platforms like Kaidee or Shopee where Mekaaa also has a presence to reach customers beyond Bangkok.

“Currently, our sales are split 50/50 between Kaidee and LINE as people tend to come check the price on Mekaaa, then contact us directly via LINE,” says You Teck.

It seems that so far, Thai consumers value good deals much more than the two step process of buying a phone.

“Probably because Thais are used to the same process as buying from an Instagram shop,” comments Adirut. “Thailand ranks first globally for most online shoppers who have purchased a product directly via a social media channel.”

Currently, a significant portion of sales come from food stall sellers and factory workers who are searching for affordable phones. When asked where they may have heard about the platform, You Teck says Mekaaa routinely advertises on tech blogs, and posts on their Facebook page – a popular channel for bargain hunters.

While the company is not shipping out brand new phones, You Teck and Adirut wholly understand the importance of a good last mile experience for ecommerce.

“We work with a packaging supplier to create our own Mekaaa branded boxes. If they’ve spent money online, the package should feel like a gift,” says Adirut. “It’s not rare for one of us to accompany the delivery man to ensure the whole process goes well.”

This level of personalized service is not easy to find, especially when dealing with non-premium, secondhand products.

What’s next for Rebonics?

The plan is for Mekaaa to eventually become a fully shoppable ecommerce platform like Laku6 in Indonesia and market expansion into neighboring countries is also in the blueprint, but You Teck vows to fully succeed in Thailand first through better understanding of the market.

“A piece of advice I would give startups that want to expand beyond their home market, is finding local partners. This has been said before, but it’s so important. Find someone you are able to work with, a distributor you can trust, and most importantly, one who knows the ins and outs of your demographic, it cuts down a lot of time,” says You Teck.

The success of on-demand ride hailing app Uber in the recent years has facilitated the birth of the gig economy, where temporary, flexible jobs are common and businesses hire contractors to perform ad hoc tasks.

While companies used to hire more workers to get through peak periods, the gig economy model allows them to bring in additional temps when there is demand and cut costs.

That is what Helpster, a Thailand-based on-demand staffing platform, is doing – connecting companies with blue collar workers when they need extra hands. ecommerceIQ sat down with the startup’s CEO and co-founder Mathew Ward to talk about the ins and outs of his business.

Building a LinkedIn for blue collar workers

“There are still plenty of people looking for jobs and businesses who always need employees, but connectivity is the problem. If we talk with small business owners, finding and keeping staff is what keeps them up at night. People are always willing to pay for solutions to their pain points,” Mathew explains the business rationale behind Helpster.

Helpster was founded in October 2015 by Mathew and John Srivorakul, the CTO of the startup, as a platform that would connect customers with repair and cleaning service providers through its app.

It has now turned into a curated marketplace that matches blue collar workers seeking a job with businesses in industries with high demand for temporary staff such as restaurants, retail, and event management.

Helpster founders

Helpster started as a B2C platform for hiring handymen services, but soon realized this business model had low frequency. The company shifted focus to B2B market three months into operations.

“The problem we found with the on-demand home services market is that there is limited frequency. When was the last time you called a plumber? The acquisition costs for consumers are high, and it takes too long to get that investment back,” says Mathew.

Realizing this, Helpster started pitching their platform to businesses instead. In the new business-to-business (B2B) model the team saw that companies needed not just handymen, but also waiters and warehouse workers. The real challenge was access to labor – how could they quickly hire blue collar workers?

Filling in temp jobs typically have two options – job boards or agencies. Job boards comprise of applicants of which 95% are not relevant for the business and majority of blue collar workers don’t have a resume or an email. “They don’t use traditional job boards – they generally find jobs through word-of-mouth, making it difficult for businesses to find them quickly,” explains Mathew.

Agencies are good at providing quality staff, but at a high cost, slow pace and workers usually come with constrictive contracts. If a business wanted to hire the worker after his/her temporary stint, the company would be subject to an agency fee.

So where does Helpster fit? The platform enables workers to create a simple profile listing their skills and previous experience, what they would like to do and how much they would like to earn. In a way, blue collar workers create their resume on the Helpster platform.

In the meantime, companies looking for hires send Helpster jobs requests and a description of their needs. The platform then matches job opportunities to available workers with the right skill set, and assigns them to the job in minutes.

Same, same, but different

At first, Helpster’s business seems similar to startups such as ServisHero or Kaodim that connect consumers with different home service providers – electricians, plumbers, movers and others – but how often are their services really needed in a year?

Helpster differentiates itself by focusing on businesses that frequently need temp staff, for example, the food and hospitality industry. Caterers, waiters and kitchen staff are always in demand for year-round engagements such as weddings, birthday parties, pop-up markets, etc.

Besides job requests from food & beverage and hospitality companies, promotional consultants who help staff pop-up booths in shopping malls or hand out flyers are another popular category of vacancies. Helpster also staffs telephone sales and warehouse operations.

“When we need extra waiters for catering events, I use Helpster to find them. It’s the only company I know that offers such a service and we use them quite regularly,” says Una Plaude, partner at Luka café in Bangkok.

Helpster started its operations in Thailand where the unemployment rate in 2016 was around 1%, making it no surprise that hiring and retaining staff were impacting business growth. The company also recently expanded into Jakarta, Indonesia because both countries contained businesses with 20-30% staff turnover.

Blue collar workers, on the other hand, usually earn around $10 a day and live hand to mouth. This makes having quick access to suitable jobs important because majority of them don’t have savings. Helpster works to turn their problems into one another’s solution.

But the company won’t be alone in its quest for long. Rocket Internet’s Ushift, recently launched a similar service in the on-demand staffing market in Singapore with ambitions to expand to other countries.

“If you have a good idea, there will always be competitors. I actually would be worried if there were none because that would mean nobody else thinks it’s a decent business. It shows opportunity if a company like Rocket is willing to enter this space,” says Mathew.

The company at present is offering its service for free, but will soon be introducing a subscription model by charging a flat monthly fee for businesses to access its worker network. While the fee has not yet been set, Mathew said it will be below other traditional recruitment channels such as job boards to remain competitive.

Dealing with uncontrollable factors

A good business idea doesn’t mean challenges aren’t involved.

The company is not simply selling apples and oranges, they are selling a service – the promise that an employee will show up and do their job diligently.

And this reveals a cold, hard reality.

“Businesses can do all the screening possible but if a worker can’t be bothered to get out of the bed because of the rain or traffic, there’s nothing they can do,” says Mathew.

Helpster tries to solve this by giving temporary workers a rating that increases with the number of jobs they take and complete satisfactorily through the app.

To ensure that businesses are sent qualified staff, Helpster curates the workers by doing background checks on those who register on the platform. “When we first started, we made everyone come in for face-to-face interviews and criminal background checks. But that doesn’t always give insights into someone’s reliability. Performance ratings and engagement data is a much better indicator,” explains Mathew.

Helpster also learned that the location of the job is very important for blue collar workers. They’ll be happy to work down the street if they can earn 350 – 400 baht ($10 – $11) a day but less likely to travel, buy lunch to work a job across the city for the same amount.

So, how does Helpster acquire its network of workers?

“We try everything. We obviously have a digital strategy, but it’s critical for us to have a good ground game. Get out to the market and meet the people. A lot of our acquisition strategy revolves actively targeting workers around their places of work,” Mathew reveals.

Helpster recruits workers

Helpster goes on roadshows to universities, schools to attract young, tech savvy job seekers to their platform.

This strategy seems to be working. Over 80,000 workers and more than 3,000 companies have registered on the app so far and the company expects that number to grow considerably now they have launched in Jakarta.

Using data to make small changes for big impact

Helpster believes in using data to understand “what tweaks move the needle”. The company tracks which worker acquisition channels drive registration on the platform and if they lead to successful job applicants.

It was data that revealed that there can be such a thing as too many jobs on the platform.

Early on, Helpster was actively onboarding businesses to post their jobs on the platform, yet they noticed that a blue collar worker might take only 10 jobs a month even if he sees 100 job applications. They realized they needed to balance the supply of jobs with the actual demand from the workers to ensure a positive experience for businesses who needed temp staff quickly.

“Like any marketplace, balancing the levels of supply and demand are critical. Too much of one, and you will see high rates of churn. It can be a fine balance,” says Mathew.

Helpster can also forecast what parts of Bangkok on certain days will have high demand for a particular type of workers. For example, restaurants and bars in Sukhumvit road area look for extra hands during busy weekends.

Mathew says that 85% of the jobs are filled within 4 hours.

What’s next?

In November 2016, Helpster raised $2.1 million in Series A funding to expand across Southeast Asia. Now for three months, the startup has been present in Jakarta where 15,000 workers have signed up the platform. But the company is not planning to expand any more at the moment.

“Too many companies make the mistake of expanding too quickly. Blue collar worker wages in Southeast Asia make up around $200 billion per year, half of that is in sectors we’re focused on and 40% of workers are on informal employment contracts. Thailand and Indonesia are 60% of Southeast Asia so if we nail these two markets, we’re in a good position,” says Mathew.

Helpster team

He is not worried about the current downfall of certain on-demand startups seen globally since last year.

“I don’t think there is anything wrong with the idea to access things on demand. We’re focused on solving problems for businesses and for which they are willing to pay a premium,” says Mathew.

 

By Aija Krutaine

Founded in 2015, popular ecommerce startup Glazziq has established itself as one of Thailand’s top eyeglasses brands for the younger generation. The company is sells high quality, affordable glasses online and experiencing a healthy average monthly revenue growth of approximately 20% – with no additional help from external investors.

What makes Glazziq unique? Well, the company offers a ‘Home Try-On’ program to allow customers to order up to three pairs of glasses to try on first and for a small deposit that is returned as store credit once items are shipped back.

Sound familiar? The startup is often compared to Warby Parker, a highly successful US based startup that managed to disrupt traditional eyeglasses retailers by providing customers with a similar at-home trial.

Although initially met with a lot of skepticism, the US company is now estimated to be worth over $1 billion and since its inception in 2010, has added over 20 offline stores to assist its online growth. 90% of in-store shoppers have already visited the Warby Parker website and/or plan to make a second or third purchase online. 

The brand’s low prices and O2O strategy have attributed to its accelerated growth and awareness.

It was really about bypassing retailers, bypassing the middlemen that would mark up lenses 3-5x what they cost so we could just transfer all of that cost directly to consumers and save them money,” says Warby Parker co-founder Neil Blumenthal.

The successful integration between offline and online channels has created a unique browsing experience and propelled Warby Parker to be one of the most popular choices in North America for eyeglasses and Glazziq aims for the same success.

Although similar, Glazziq identified the demand for this kind of business model in Southeast Asia but adapted it for the region – all without the help of any external funding. How? With a smart business model, some traditional retail experience, dedicated founders and a market with high demand for spectacles.

Euromonitor forecasts that glasses in Thailand is expected to maintain a compounded annual growth rate of 5% to push sales to reach $13 billion by 2021. With so much potential, it’s surprising no company in Thailand has found a way to sell better to the digitally adept generation.

Equipped with an MBA from Kellogg Business School, on-the-ground experience from her family’s own 50 year old glasses retailer Better Vision and SET listed global lens manufacturer Thai Optical Group, co-founder & CEO Prinda Pracharktam decided to build Glazziq.

Prinda shared that people often admitted they felt pressured under the watch of a salesperson and unwilling to pay high prices for brand name frames and lenses. Others were overwhelmed by the sheer selection of eyeglasses. Glazziq wanted its frames to be affordable and designed to suit the tastes of its target market of 20-35 year olds.

The online glasses store was born to be the solution to these particular pain points so now how could they keep its fickle millennial demographic engaged?

The Glazziq Experience: Laid back, Trendy & Fresh  

When Glazziq was founded two years ago, Prinda and three other co-founders did everything in-house from snapping street style images of casual models to running online marketing campaigns and optimizing the design of the website.

By focusing on quality web content to mirror the appeal of flipping through a glossy magazine, Glazziq elevated the browsing experience for its customer. The company borrowed the same concept Instagram and Facebook fan pages used to keep their audiences engaged –  relatable content that inspired.

And this concept is evident in each collection from Glazziq. There is a clear focus on “everyday” imagery and the company keeps its product line trendy through a new model release every quarter and offers over 170 styles.

By creating a fresh and visually appealing shopping experience for browsers, Glazziq removes the pressure to buy and instead provides the customer with everything they need to make an informed and satisfying purchase: multi-angle views, information on glasses material, styling examples, etc.

“Glazziq focus on personalization to improve brand loyalty,” says Prinda. “We cater to our customer’s unique tastes by providing them with styles that are either popular in magazines or edgy frames that can’t be found elsewhere.”

glazziq thailand

The Glazziq Model: DTC

Glazziq operates on a direct-to-consumer model. The startup manufactures the glasses themselves from custom designs and leverages resources from its partner, Thai Optical Group. This allows Glazziq to keep prices affordable while maintaining high quality, models start at $56.26.

The company operates like a fast fashion brand in charge of its operations and brand identity, bearing similarities to the business model of another highly successful Thai fashion brand Pomelo.

Glazziq’s extensive offline network gives it an advantage over other online platforms. Prinda shares that Glazziq’s UV400 color lens provided by Thai Optical Group is unique only to them and they collaborate to keep up with consumer trends. The company also works with Better Vision to offer a free eye prescription test and after sales care including frame repair, frame adjustment and lens replacement, all the crucial components that are often missing from purchasing eyewear online.

To ensure efficient supply chain operations, order information from a customer is sent directly to the lens manufacturer where Glazziq stores its frames. The product is then assembled and delivered directly to customers nationwide through a mix of third party logistics couriers. The return process is also simplified through Glazziq’s partnership with 7-Eleven that makes its “Home Try-On” program even more appealing.

Customers can return sample glasses from the program to any 7-Eleven branch – something that happens 10-20% of the time. The program has proven to be successful as home try-ons welcome a healthy 60% conversion rate. Although the company’s primary focus is on Thailand, the team plans to expand to Singapore and Malaysia where Better Vision is also present.

The Glazziq Future: Integrating Offline Touchpoints

The Glazziq team knew when they launched that they wouldn’t remain a pure online brand and began to tread the offline waters in 2016. Glazziq’s decision came from a cautious outlook on Thailand’s landscape – the country’s ecommerce industry is predicted to make up 15% of total retail sales by 2024, although a sizable jump from the current 3.8%, it would still leave a staggering 85% offline presence.

“Thailand still remains a thriving offline retail landscape, people are never going to stop shopping in department stores or malls,” Prinda comments.

So came the decision to launch an offline showroom in one of Thailand’s bustling office districts in a coffee shop called Printa Cafe.

“We didn’t want a typical brick and mortar store. Using a high-traffic location such as a cafe gives our products a lot of exposure and the relaxed environment encourages people to try on different designs between cups of coffee. We wanted something entirely different from going to an eyewear store with a sales attendant breathing down your neck. We hope customers purchase because they’ve found a suitable model they like,” Prinda comments.

And it seems to be working as Glazziq recently added a second offline location to its portfolio at Casa Lapin – a coffee shop and co-working space highly frequented by young professionals.

Glazziq’s second offline showroom at Casa Lapin, a popular coffee shop and co-working space in a busy area in Bangkok.

Glazziq’s first showroom at Printa Cafe, located below the startup’s HQ.

To buy at the showroom, shoppers can simply scan the QR code on the product or buy online through the site’s search function. The customer can then make an online transaction via credit/debit card payment or bank transfer and the product is delivered within 5-10 business days.

Prinda believes Glazziq’s offline presence will double the number of sales and bring more awareness to the company’s “Home Try-On” program. It also hopes the added exposure will give the brand a new audience who will enjoy the entire Glazziq experience.

“Every channel has its own forte. For our brand, it’s better to close sales online and tend to customers offline,” Prinda says. “You have to synchronize and blend both online and offline experiences in order to succeed.”

THIS ARTICLE WAS BASED ON eIQ’s INTERVIEW WITH GLAZZIQ FOUNDER, PRINDA PRACHARKTAM

Before you start your Wednesday, check out these ecommerce headlines.

1. Subscription ecommerce startup Rockets of Awesome raised $12.5 million

Although a Western startup, Rockets of Awesome showcases the rising popularity of subscription ecommerce models. Users can sign up for the services, which survey them about their likes, dislikes, preferred brands and price points, then they begin receiving pre-scheduled or on-demand deliveries of clothes that they can either keep or return. The startup is geared towards kids, and sends parents seasonal items of clothing.

The company makes its own apparel, hereby cutting out the middle man and producing in-house.

Read the rest of the story here.

 

2. Thailand’s Bank of Ayudhya mulls more fintech investments

Bank of Ayudhya (BAY) and its financial technology venture arm are looking to directly invest in three companies in order to keep the bank’s competitive edge. Krungsri Finnovate is eyeing two payment fintech firms and another that uses artificial intelligence, said Thakorn Piyaphan, head of digital banking and innovation and head of Krungsri Consumer Group.

Read the rest of the story here.

 

3. Ecommerce’s demand for Chinese postal services

According to China’s State Post Bureau, online purchases generate more than 21 billion of the 30 billion packages delivered this past year in the country. The year before saw 20 billion total packages, including both ecommerce and other parcels. And as Alibaba and JD.com are gaining international appeal, more shipments are going and coming overseas.

Nearly 30 percent of the total are packages being shipped from the United States.

Read the rest of the story here.

 


Enjoyed reading this round-up? Head over here for more ecommerce related research & insights.

What is Foodpanda? 

Foodpanda is Rocket Internet’s global food delivery service, present in 22 countries, 500 cities with a strong footprint in Asia. The company has raised $318 million in funding since its inception and will now be sold to rival Delivery Hero.

The company had already shut down its Indonesian arm a few months ago and sold its branch Vietnam in 2015 after struggling to compete with local rivals.

What does Rocket Internet get for Foodpanda? 

Stock in Delivery Hero, which gives the German conglomerate a total of 37.7%. They previously paid $586 million for a 30% stock in February of last year.

If calculations are done backwards:

  1. $586 million for 30% = 19.5% million per 1%
  2. Foodpanda sold to Delivery Hero for 7.7% additional stake roughly equals $150 million
  3. The company was sold for half the price of its total $318 million funding

Rocket Internet SE said the combined business will process more than 20 million orders a month and operate in 47 countries.

What is Delivery Hero?

Delivery Hero Holding GmbH is an online food-delivery service based in Berlin, Germany. The company launched in 2011 and now operates in 33 countries internationally in Europe, Asia, Latin America and the Middle East and partners with 300,000 restaurants.

Why did they sell Foodpanda? 

According to TechCrunch source,

Foodpanda has slashed the asking price for its Indonesia operations to basically zero after more than a year of unsuccessfully trying to offload it.

The company is reevaluating its entire business across [Southeast Asia], and it has already made tentative efforts to sell in some countries. The company expanded in Asia via a series of acquisitions, which, in many cases, ironically leaves it without obvious suitors.

With more on-demand services like Go-Jek and LINE Man offering delivery services, how will the combined company fare? Tweet us with your answer @ecomIQ.

It is often useful to borrow someone else’s experience when you’re stuck in a difficult place or are in need of ideas. Southeast Asia is a market so new that entrepreneurs look to the West or China for inspiration. In today’s over-excess of information, ecommerceIQ has spoken with influencers from DHL, Lazada, aCommerce and more to discover which book helped them build successful companies. Read more