Here’s what you should know today.

1. The Singapore and Abu Dhabi governments are working together to promote fintech

Details about the arrangement are sparse at this point, but it’s clear that the focus will be to improve the regulatory environment for budding startups.

Both government bodies will explore “joint innovation projects” in the fields of digital and mobile payments, blockchain, big data, and other technologies of the future.

The local market and ecosystem in the United Arab Emirates is small – similar to Singapore – but the expectation is for startups to use the business-friendly policies as a launching pad to the rest of the wider Middle East.

Read the rest of the story here.


2. KFit buys Groupon Singapore

Subscription gym startup KFit has continued to morph into Groupon after it acquired the third country business from the group-buying giant in Southeast Asia. KFit acquired Groupon Indonesia and Groupon Malaysia last year as part of a pivot to move from a business that sells fitness-based membership services to ecommerce.

The irony at play here is that Groupon itself long gave up on Asia, shuttering its presence in a number of markets last year as the promise failed to deliver. Whether the startup has a know-how into Asia that Groupon didn’t, is yet to be seen.

Read the rest of the story here.


3. Jack Ma wants to throw counterfeiters in prison

Ma’s appeal seeks harsher laws to fight fake goods, and comes as China’s annual parliamentary meetings take place in Beijing.

“If the penalty for even one fake product manufactured or sold was a seven-day prison sentence, the world would look very different both in terms of intellectual property enforcement and food and drug safety, as well as our ability to foster innovation,” wrote Ma in a statement to China’s parliamentary delegates.

Ma’s recent comments have deflected responsibility, he said Alibaba was “itself a victim of counterfeiting.” Ma has now gone further to stress that China’s laws are far too lax. Ma has said that there has been a lot of bark surrounding counterfeiters, but no bite.

Read the rest of the story here.


Southeast Asia in 2010 started to experience an ecommerce boom with the likes of Ensogo, Rocket Internet’s Lazada and Zalora, Groupon, etc. It seemed to be at the height of its peak with money pouring in, mergers and acquisitions happening every day, and Amazon finally moving in to capture the region’s potential but amid these buzzworthy headlines, down rounds plagued startups such as Lazada, were sold for scraps like Zalora Thailand, or shut down completely, such as Ensogo.

What happened? Smaller startups began venturing into other fields providing human resources (Getlinks), car wash services (Wash Mobile), recruitment (JB Hired), agriculture (EverGrow), hardware (DriveBot), and more. It seemed that startups were shifting focus to offer niche services to carve out their own demographic in a saturating market but could they sustain themselves?

A Sustainable Model: Fintech

Across the region and even in once-upon-a-time unicorns such as Flipkart and Snapdeal, news reported large reductions in hiring, peaking salaries, and a slowdown in capital flow shadowed the once profitable businesses VCs banked hard on. The customer behavior in Southeast Asia, more specifically trust, is simply not mature enough.

It also cannot be denied that a capital and inventory intensive model requires deep pockets. After running a successful ecommerce company in Thailand for three years, I realized it was necessary to go back to the basics, to start a business model that encompassed the three components of sustainability:

  1.       High margins
  2.       High customer lifetime value (LTV)
  3.       Low customer acquisition cost

A business with these characteristics usually has a strong foundation and presents a good investment opportunity because it shows promise for profitability down the line. While ecommerce does have low customer acquisition due to the nature of retail and lower commitment products, such as retail and consumer goods that are being sold, it severely lacks in margins and customer LTV (lifetime value).

Margins are often eroded away by high operation costs, packaging, shipping, and inventory while LTV is nullified by heavy competition as most ecommerce companies do not have exclusivity on products and pricing. After all, it isn’t in the best interest of product owners and manufacturers to only distribute their products through one single channel.

Fintech on the other hand, a recently booming industry, does not suffer from these disadvantages. Like most tech companies, there is no inventory to hold, the margins are much larger and once you have acquired a customer, you have an 80% renewal rate for at least the next four years (Bangkok Insurance’s internal data). By building better fintech, it would change the behavior of consumers in Southeast Asia and eventually fuel the growth of ecommerce in the region.  


Lack of Innovation: More Room to Grow?

Fintech is ripe for entrepreneurs because existing legacy players such as Viriyah and MSIG in the market lack innovation. Companies like Bangkok Insurance, HSBC, and other traditional financial institutions are only beginning to realize the magnitude of the tech wave that has hit the world.

As the saying goes, it is hard to steer big ships, and ships seldom get bigger than the companies that make up our financial industries. These companies earn a vast majority of their profits from traditional channels, leaving the unexplored to opportunistic entrepreneurs like myself with and many others who have managed to convince investors for support.

A recent report from Accenture found that global investment in fintech has skyrocketed from $930 million back in 2008 to over $12 billion by the beginning of 2015. Europe experienced the highest growth rate with an increase of 215% to $1.48 billion in 2014. Globally, fintech startups have raised investments totaling $19 billion according to a insight report published by Citibank. This has begun to eclipse other startup sectors as it continues to grow.

Challenges of Fintech

The next big thing does not come without its own challenges. Fintech startups need to realize very early on that there are many rigid regulations which were not created with innovation in mind. For example, in Thailand, selling insurance online requires a business to report to at least three different governing bodies all of which have their own set of rules to abide to. This increases admin work for small companies and also requires legal knowledge that most new companies lack.

Companies are also not allowed to call a customer to confirm purchase as that would be considered “telemarketing insurance sales” and requires a different license. One of the biggest challenges for fintech companies is encouraging users to trust young companies with their financial information, savings, and future to adopt its products and services.

It takes time and a lot of marketing dollars to explain to customers who you are and why they should trust you with their money. These challenges do get easier as more startups enter the space and educate their audience through smart marketing initiatives.

Rabbit, a company based in Thailand, is the first integrated online/offline payment platform in Thailand accepted in multiple retail stores, restaurants and used for public transportation. Its partnership with LINE earlier this year means over 5 million users are slowly allowing their financial information to be connected to some sort of a tech platform.

“This joint partnership [Rabbit LINE Pay] will strongly support government policy in driving Thai people into a cashless society,” says Nelson Leung, chief executive officer of BSS Holdings, the operator of Rabbit card.

Influence from neighboring countries such as Singapore and Malaysia, a lot of which have already set up country specific ‘sandboxes’ to trial for fintech regulations, are also moving towards a cashless society to drive the realization that there is a need for innovation in the financial sector.

Ecommerce is a big marketbut until the shopping habits of Southeast Asians are shifted to online spending habits, it can never reach its full potential. The emergence of fintech and its supporters mean that by building the fundamentals, companies in the entire ecosystem can benefit from its success. 15 years ago, people would call a travel agent and ask them to book a ticket. And now? When was the last time someone called a travel agent to book a flight or hotel room? Behaviors change, but it takes innovation and time.


Here’s what you need to know for today:


1. Carousell is getting serious about making money, acquires used-car app

 Carousell announced today it has acquired Singaporean mobile-first used car marketplace and dealership tool Caarly. The terms of the deal are undisclosed. The Caarly team will join Carousell in its entirety and its product will continue as normal.
Read the rest of the story here.

2. Groupon is buying LivingSocial, plans to downsize business to 15 markets from 27

Groupon today also said it plans more downsizing of its overall business, on top of the several closures and layoffs of the last few quarters. In Q2 the company was operational in 27 markets; the plan will be to bring that down to 15.
Read the rest of the story here.

3. Thai fashion e-tailer Pomelo raises funding from Jungle Ventures, brings series A funding to $11 million

Pomelo said it will use the funds to continue to their expansion in Southeast Asia. Currently, the company is focused on Thailand, Singapore and Indonesia but has customers in over 44 countries across the globe.

Read the rest of the story here

Konsula Brings Healthcare Ecommerce To Indonesia

Healthcare ecommerce will modernize the industry and possibly cut down waiting room time. Source: Straits Times

Jakarta based startup Konsula, previously a healthcare directory, has announced its entry into ecommerce with the launch of Konsula e-Store, reports Digital News Asia. Its ecommerce launch is establishing the company into being one of the first health marketplaces in the country.

Currently, Konsula has on board 300 merchants who offer skin and beauty treatments, dental and pregnancy care, extending to medical checkup services. Konsula e-Store will act as an online platform for healthcare services, and differentiates themselves by offering a shoppable ecommerce aspect to the platform.

Konsula currently has 2,800 and 900 doctors listed in its directory, including 20 doctors on its telemedicine platform.

We want to break open the access to healthcare by leveraging technology-first in Indonesia, and eventually regionally- Shinta Nurfauzia, Konsula Co-Founder and CEO.

The ecommerce store will be available for Android and iOS platforms, and will enable users to access Konsula’s healthcare directory, telemedicine service and ecommerce store. The ecommerce store, users will be able to look for deals and services offered by hospitals, clinics and Konsula’s merchants.

Don’t mistake Konsula’s medical marketplace as the Groupon of healthcare, as its ecommerce store is not deals centric. Discounts will only be offered when there is a special event. Their main service will be allowing users to pay for a specific healthcare service through Konsula’s platform, which will then supply the user with an electronic voucher. The user can then bring the voucher to the clinic for treatment.

Currently, Konsula offers healthcare  services such as dental treatments, medical checkup packages and skin laser treatments, but they are aiming to expand into healthy lifestyle products, including gym memberships in September.

Raising Awareness For Healthcare Ecommerce

Some of the merchants on Konsula’s ecommerce store are state owned. For example, KFD, the clinical laboratory arm of pharmaceutical company PT Kimia Farma Tbk, is a state owned enterprise that has had ecommerce aspirations, but cannot afford to build its own platform. Therefore, partnering with healthcare focused startups is a mutually beneficial as they are both working towards the same goal.

Telemedicine has also exposed more doctors to a larger platform of patients. Doctors on Konsula can be anywhere at any time, and still be able to consult patients through technology.

Konsula is establishing itself as a healthcare ecommerce pioneer despite the fact that the digitalizing of healthcare services is ridden with regulation issues.

A version of this appeared in Digital News Asia on June 29. Read the full article here.

Ensogo Shuts Down All Marketplaces In Southeast Asia

Ensogo Office in Bangkok Source:

Ensogo announces that it is shutting down all business units in Southeast Asia and laying off staff in the region.

This follows an array of bad news that has been following the company since the beginning of the year, including the firing of half its staff in May in an effort to save costs. In a statement sent to Tech in Asia, the company has announced that:

Ensogo Australia will no longer provide financial support to its subsidiary Southeast Asian flash sales and marketplace business units. This decision has been made to preserve the company’s cash for new investment opportunities.

Trading in the Ensogo stock was halted on June 17 prior to today’s announcement, and is due to resume today.

Ensogo owns a network of ecommerce websites in Singapore, Hong Kong, Malaysia, Philippines, Indonesia and Thailand. It has been struggling to strive in a competitive marketplace, and shifted from being a daily deals website in 2013 to a mobile marketplace in 2015.

What went wrong?

Ensogo initially started out in a time when Groupon popularized online daily deals. Eventually, this trend fizzled out and although Ensogo attempted to reinvent themselves, they struggled to catch up to larger ecommerce titans, the main challenge for the company was to convince consumers to engage with them even though Ensogo reported that it had 3.5 million users.

The trail of bad publicity continued in May 2016 when Ensogo merchants complained about not receiving payment. A report sent to the ASX earlier this year showed that the company’s total cash at hand stood at only $13.2 million US, which meant that if it did not raise additional money or trim costs, the company could run out of cash before end of 2016.

A version of this story was published in Tech in Asia on June 21. Read the article here.

Ensogo halts share trading


Ensogo, the struggling daily deals ecommerce company, saw today its trading suspended on the Australian Securities Exchange (ASX) pending an announcement.

Formerly known as iBuy and founded by entrepreneur Patrick Grove, Ensogo owns a network of ecommerce websites in Hong Kong, Singapore, Malaysia, the Philippines, Indonesia, and Thailand. The company has been experiencing a decline in share price down to nearly zero this year.

The trading halt follows the resignation of two Ensogo directors (Thomas Baum and Frederique Covington) as well as the selloff by a big shareholder. On May 24, The Australian reported that Macquarie offloaded 2.3 million shares in Ensogo for A$0.50 apiece, marking a 50 percent discount to its closing price at the time.

Ensogo has been embroiled in controversy after its merchants complained about delayed payments starting in April this year.

The Australian bourse said the suspension would remain in place until the opening of trade on Tuesday, June 21 or when the announcement is released to the market. The news comes less than a year Groupon shuts down in 7 countries including Thailand and Philippines in Southeast Asia, signalling the start of ‘deal fatigue’ among consumers that lowers re-purchase rates and thus customer lifetime value.

A version of this appeared in Tech in Asia on June 17. Read the full article here.