Posts

ecommerceIQ, together with Sasin SEC, created the Leadership Ecommerce Accelerator Program (LEAP) to provide the fundamental knowledge and skills needed to successfully run an ecommerce business in the world’s fastest-growing market.

While buying search keywords and having attractive content are almost crucial for modern-day marketing, quite often companies ignore an equally important aspect of content marketing/communications – Public Relations.

During this week’s class, lecturers unveiled effective ways to increase brand awareness using the media with ‘smart’ communications and how to achieve positive unit economics.

1. Treat media relations like dating

CYNTHIA LUO, ACOMMERCE HEAD OF COMMUNICATIONS AND ECOMMERCEIQ PRODUCT MANAGER

Not all companies can afford to have a communications team but this doesn’t mean they should neglect  “free publicity”. According to Cynthia,

“You, the executives, are the walking-talking mascots of the brand. If I run a Google search for your name, what does the audience learn about you?”

LEAP startup course

Cynthia Luo, aCommerce Head of Communications and ecommerceIQ Product Manager

To make things easier, she compared the procedure of creating a relationship with a media to dating and baseball games.

  • Home Base: Similar to dating, you want to get to know the person that will be eventually writing about you. With journalists, introduce yourself by reaching out on Twitter or email, something as simple as complimenting their work. Twitter remains a popular social media platform among journalists.
  • First Base: Establish meaningful conversation. It can be done by finding out what the journalist is interested in, tweet interesting articles to them and ask for their opinions.
  • Second Base: Getting “physical”. With journalists, initiate a meet up, this can include a media visit to your office and/or a press event. This is also where a press release with newsworthy news should be shared.

Below are some headlines that typically make news:

LEAP startup course

  • Third Base: In romantic relationships, it can be healthy to be exclusive. When your news is published, make sure you don’t damage the relationship with the media you created.

Common mistakes that would irritate journalists include spamming their inbox, using an unnecessary amount of buzzwords, and a delayed response to requests for comments.

2. Positive unit economics is the only way to be profitable

MICHAEL CLUZEL, EATIGO CO-FOUNDER AND CEO

As a marketer, economist and founder of the popular dining application, eatigo, Michael doesn’t believe in businesses that don’t profit.

LEAP startup course

Michael Cluzel, eatigo co-founder and CEO

It’s common for a startup to depend on investors for financial injections but a startup should eventually be able to survive on their own if they choose to ‘break free from the aquarium’.

“Startups need to be independent from investors. Instead of relying on external financial sources, create your own source of income and be profitable.”

How? Ensure that Lifetime Value (LTV) is higher than Customer Acquisition Cost (CAC) is reduced.

LEAP startup course

3. Student case studies

SHEJI HO, ACOMMERCE GROUP CMO

The insurance sector in Thailand is the second largest in the Asean Economic Community, and accounted for 5.5% of GDP in 2016. However, direct premiums purchased through online channels have a YoY growth of 25% in 2016.

The students wanted to know how could they launch financial services online successfully and  what kind of marketing tools could be best leveraged?

According to Sheji, the real opportunity in this industry lies within the product, not distribution channels.

LEAP startup course

Sheji Ho, aCommerce Group CMO

The local market is already saturated and mature with many fintech players moving into the space. What is missing is actually the innovation of insurance products and pricing.

LEAP startup course

“There is wide open space to disrupt this industry as you can create micro-insurance products to sell online.”

Traditional companies should look to China for examples of different types of financial products such as insurance for kidnapping, mobile phones, ecommerce returns, etc.

The next class in the 10-week program is on Thursday October 12th and will take a look at the fundamentals of app marketing, as well as learning from an omni-channel case study of Central Online. Stay tuned for next week’s takeaways!

[LEAP Week 1] eIQ Insights: The New Ecommerce Opportunity in Thailand

[LEAP Week 2] eIQ Insights: Refinement of an Ecommerce Channel Strategy

[LEAP Week 3] eIQ Insights: Market-Product Fit First Before Anything

[LEA{ Week4] eIQ Insights: Central Marketing Group’s Shares Phase II of Digital Strategy

Here’s what you should know today:

1. Restaurant booking platform Eatigo expands to India

Bangkok-headquartered startup Eatigo announced the expansion of its services to users in Indian cities, Mumbai and Pune. The company, which offers time-based discounts, already has presence in Thailand, Hong Kong, the Philippines and Malaysia.

Eatigo has partnered with 300 restaurant partners in both Mumbai and Pune, including Grand Hyatt and Renaissance Mumbai. Users can use Eatigo website or mobile app to reserve a table and avail of discounts of up to 50%.

Eatigo plans to have 700-1,000 restaurant partners across Mumbai and Pune by the end of the year and hopes to breakeven in India in the next 12-18 months.

“This will not be a two-city play. We will look to expand pan-India once we have developed Mumbai and Pune,” said Siddhanta Kothari, CFO of Eatigo.

Read the full story here

2. Grab raises $2 billion from Softbank and Didi Chuxing

Uber’s biggest rival in Southeast Asia, Grab, is raising $2 billion in funding from Japan’s Softbank and China’s Didi Chuxing. The deal is expected to close in the next few weeks and would value Grab more than $5 billion.

The news came amid efforts made by Grab to transform into a consumer technology firms that also offer loans, electronic money transfer and money market funds.

Grab is present in more than 55 cities across seven countries.

Read the full story here

3. Indonesia’s BlackGarlic closes as market is not familiar with the concept

Meal ingredient catering startup, BlackGarlic, decided to cease operations as of Friday as the company experienced a difficult time in retaining the customers.

The company is founded in 2015, providing individually packaged MSG-free ingredients complete with step-by-step recipes. The recipes were developed under the local culinary expert William Wongso.

The concept is similar like US-based company Blue Apron, that went public last month.

Read the full 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.”

Bangkok’s internationally recognized ‘foodie culture’ has given rise to a steady rotation of up and coming international eateries, attracting lines of customers and naturally, the birth of food ecommerce startups vying for their attention.

Hungry Hub is one of them.

The company started as a restaurant reservation app in 2014 after anticipating a boom in restaurant bookings in Bangkok as the city was experiencing a surge in demand for eateries and dine out venues. Founder Surasit Sachdev wanted the app to be the “OpenTable” of Bangkok.

Fast forward two years later, traction for the app never picked up because customers weren’t incentivized to book through the app and the restaurants were never fully booked to need a reservation. The result left Surasit with two choices: pivot or shut down completely.

Hungry Hub lived on, but first needed to become lean. 15 employees were cut down to a team of five and the company decided there was a future in bookings for larger parties like corporate dinners, anniversary celebrations or other social functions.

The realization came to Surasit when he took his team out for meals and there was no way to balance price point and allowing his employees to order freely. How could he come up with a way for price sensitive companies like startups to enjoy corporate meals without breaking the bank?

The “all you can eat” package

Many mid-tier restaurants in Bangkok require a customer to spend an average of 300-500 THB per meal, usually comprising of an appetizer and a main dish; this excludes drinks and a service charge.

With Hungry Hub’s ‘all you can eat’ package, each customer would be charged a fixed fee of 599 THB to eat a variety of mains, appetizers, drinks and desserts from the menu depending on sets curated by the restaurant.

Hungry Hub focuses on mid-tier restaurants like Audrey Café and popular Japanese ramen chain Ippudo who have already partnered with Hungry Hub to offer the ‘all you can eat’ package. There are currently 33 restaurants signed onto the platform.

To get these offers, reservations need to be made at least 30 minutes in advance, and about a week for corporate gatherings.

Since the shift to B2B, Hungry Hub has seen 30-40% growth in revenue.

“Several large corporates have recently approached us and asked if we could find them a restaurant that could fit 300+ people,” says Surasit. “That’s when we realized there’s a demand.”

Unlike other businesses, the company is growing its business based on profits, rather than spending upfront to achieve sustainable growth. Currently, Hungry Hub has not raised funding for its business till date, but plan to do so in the near future for expansion.

The demand for more B2B services

Although Bangkok’s restaurant booking landscape is filled with active, high profile ‘food’ players such as restaurant reservation platform Eatigo and Thai restaurant directory and delivery platform Wongnai, Hungry Hub is developing a niche of its own by establishing the company as the go-to platform for B2B dining and catering to large groups of friends and families.

“The good thing about the food industry is that it’s an everyday thing. Users do not have to exclusively stick to using Hungry Hub or Eatigo,” says Surasit. ‘Their dine-out needs are always changing.”

“We want to become the name companies think of when they need to find a restaurant for a company party or dinner for 10-100 people,” continues Surasit. “We’ve built a large restaurant database that can accommodate these needs that no one else is doing.”

Hungry Hub is focusing on the development of its website over its mobile app because the company finds conversions are better on desktop. Companies browsing for suitable bookings are most likely doing so on computers than on a mobile phone.

What’s in the future for Hungry Hub?

Hungry Hub will spend the next six months solidifying its B2B play by adding more user benefits on top of the current 20 THB credit back with every booking – cashback can be requested after a minimum of five reservations.

Future benefits to look forward to include two for one booking and loyalty rewards.

When asked about the future of Bangkok’s restaurant landscape, Surasit expresses his concern for the oversupply of restaurants.

“There seems to be a new restaurant opening every week, and people try it once or twice then never return. The lack of loyalty has caused many places in the city to go out of business.”

So how is Hungry Hub trying to help these restaurants?

By cutting out discounts and providing restaurants a more reliable solution through group bookings.

“We want to bring sustainable offers to independent restaurants rather than cutting their heads off with half-price deals,” says Surasit. “The future of food ecommerce is not in massive discounts.”

 

 

Here are some headlines to read through before you start the day.

 

1. TripAdvisor’s first Southeast Asian investment is Thailand and Singapore based startup Eatigo

Thailand-based restaurant booking platform Eatigo announced that it has raised a Series B funding from major travel information platform TripAdvisor. The investment was made through TripAdvisor’s global restaurant reservation brand, TheFork.

This is TripAdvisor’s first move into Southeast Asia, and their first investment in a startup. Read the rest of the story here.

 

2. Facebook launches new marketplace

Facebook has launched Marketplace, a centralized hub where its 1.71 billion monthly users can buy and sell their stuff online within local communities. This may be bad news for Craigslist?  Read the rest of the story here.

 

3. Fashion startup Grana closes $10m series A round led by Alibaba’s Hong Kong fund

As reported yesterday, Alibaba’s Hong Kong fund has invested in 3 startups. More details have emerged about ‘Grana’.

Grana says it will use the fresh capital to expand in its highest growth market, the US, and branch out into new product offerings like sportswear, bags, and accessories. Read the rest of the story here.

 

4. Amazon bans incentivized reviews tied to free or discounted products

This program allows Amazon – not the seller or vendor – to identify trusted reviewers, and has a number of controls in place in order to keep bias out of the review process. Read the rest of the story here.

thailand-hubba-startup, Thai Government's Efforts In Seeding Startups

Source: Tech in Asia, Hubba

The Thai Government announced a 20 Billion THB investment to accelerate 2,500 existing startups, with a target to increase the number to 10,000 by 2018. The government’s efforts in seeding startups will be a very important one, but they must ensure the program’s effectiveness and transparency. According to Pumin Yuvacharuskul, CEO at Eatigo,

Thailand’s ecommerce landscape is held back by unfavorable cross border investment policies and limited talent pool, which means that the government should roll out initiatives to sustain and grow start-ups as well as getting it off the ground.

Thai laws limit foreigners to holding 49% of the shares in an ecommerce business, as opposed to Singapore’s 100%. Law also states that the company needs to hire four Thai people to one foreigner. In order for Southeast Asia’s ecommerce landscape to flourish, opening up the market would help foster the local economy.  Indonesia has taken initiative and currently the Investment Coordinating Board (BKPM) is finalizing guidelines that will allow 100% foreign ownership of an ecommerce business with a minimum investment of US$8 million, or businesses that create 1,000 employment opportunities. In China, the government has poured a lot of money into startups and there are well established tax and tech-park incentives.

Governments can help create incentives for banks to support funding to help startups that have potential, and not only to SMEsAlthough this is a good initiative for a growing digital economy, it will take a long time to see results if local and international VCs are not involved in seed funding. Opportunities for  regional collaborations will also boost business. Recently, The governments of Thailand and Singapore announced a partnership to promote digital start-ups and mentoring for existing startups.

“Several drawbacks for startups operating in Southeast Asia are the limitations on users and monetisation given the combination of low GDP per capita and low credit card penetration in the region,” said Eddie Thai, a venture partner with the early-stage VC firm 500 Startups. “These challenges will be overcome with time in most countries, but it will be hard for any country to match Singapore, let alone Silicon Valley, without overcoming infrastructure and corruption issues.”

A version of this appeared in Bangkok Post on June 20. Read the full article here.