The problem for new startups trying to secure a slice of the ecommerce pie is an issue of differentiation, which will shape the future of ecommerce in Southeast Asia. Most stores are vanilla products – you log on to the site, search for products that interest you, compare prices and place your order. The likes of Amazon, Lazada, Flipkart, and Alibaba already have millions of items for sale, why should a user buy from someone else unheard of?

“That’s precisely how iBuySell aims to set itself apart,” says Kaustuva Mukhurjee, the startup’s CEO. What is iBuySell?

A mobile shopping marketplace with a very unique feature – a “live sale” section where new products across several categories are listed every few minutes.

The price of each item drops every second until one person decides to purchase it, thereby “locking” it.

Once the price is frozen, the item is taken offline and reserved for the shopper. It does not follow a bidding mechanism similar to how eBay functions. Shoppers have to decide whether to wait for the price to drop further, in which case they risk losing it to someone else, or purchase straight away. There’s initially a free, one-month-long trial through which they can familiarize themselves with the dynamics of the store. Afterwards they have the option of paying a transaction fee anywhere between 5 and 15 percent or a monthly subscription fee which starts at US$29.

A win-win strategy for sellers and consumers

Kaustuva says there’s plenty of incentive for sellers to come onboard the marketplace too. “Listing process is simple and fast for sellers – click some product pictures and upload from their phone or desktop. Enter the item title, description, a few details such as size, brand, and shipping costs,” he adds.

The discount window is small, lasting about 90 seconds.

The trick behind this 90 second discount model is that prices do not fall under a minimum ceiling indicated by the seller. This helps eliminate the uncertainty associated with online auctions as sellers do not know what price they might get and may also end up sustaining losses.

Kaustuva explains the idea for his store came about after he thought about consumers disliking the seven day wait period for the auction to close or having to bid several times in order to nab the item.

‘The online bidding systems on sites like eBay were frustrating and time-consuming so why not make thing fun and exciting while moving products fast for sellers?’

And that’s how iBuySell is different from other flash sales sites. Discounted products on those stores are usually available anywhere from 24 hours to 7 days.

“The ultimate goal of ecommerce is to engage consumers and encourage them to make a purchase decision. People don’t buy stuff just to get the things they want but also have an exciting experience,” affirms Kaustuva.

A version of this appeared in Tech in Asia on July 11. Read the full article here.

Jack Ma presenting Alibaba's new smart car to the world. Source: Tech In Asia

Jack Ma presenting Alibaba’s new smart car to the world. Source: Tech In Asia

Alibaba has unveiled its first smart car, a collaborative project between Alibaba and Chinese auto manufacturer, SAIC, reports Tech In Asia. The smart car, CarOS Roewe RX5, was introduced by founder Jack Ma to the Chinese Press in Hongzhou on July 6. Dr. Wang Jian, Chairman of Alibaba’s Technology Steering Committee comments,

We are creating a ‘car on the internet’. Smart operating systems become the second engine of cars, while data is the new fuel. 

The car will leverage Alibaba’s various ecommerce functions in order to help drivers search for every day things such as parking spaces and gas stations.

Drivers will be able to make e-payments through Alipay, Alibaba’s electronic payment system. The car will assign a unique ID for each driver and be able to make recommendations on things such as music and restaurants.

Drivers will also be able to take selfies with a detachable 360-degree camera that comes with the car.


The cost of an RX5 will start at $22,300 and is available for preorder on Tmall; more than 100 people have already signed up.

The cost of an RX5 will start at $22,300 and is available for preorder on Tmall; more than 100 people have already signed up.

Alibaba is aiming to place itself in the center of car-based data services, as well as enable other companies and third party services to bring new innovations to its new platform. Using a smart car as a new platform for the company’s services moves past mobile restrictions and internet based services and introduces drivers to Alipay. They will be able to use internet and navigation services without getting out of the vehicle.

According to Your Story, the launch of RX5 has placed Alibaba ahead of companies such as Google, which has not yet released a commercial car product despite making headway in the sector.

No words on how the car performs in terms of driving experience as the RX5 is expected to be delivered to owners in August.

A version of this article appeared in Tech In Asia on July 7. 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.

While there is plenty of buzz around brands building their own webstores instead of a strategy focused on distribution through e-tailers such as Amazon, Tmall, or Lazada, Southeast Asian brands are still undecided on whether to move online at all. This is despite ecommerce growth projected at 25%, tantamount only to China’s growth (AT Kearney 2015) but there are trailblazers – brands ahead of the curve who have decided to invest in their stores in Southeast Asia such as HP, Maybelline, Kiehl’s and Nescafe in Thailand.

In the US, accounts for only a small portion of online sales. For example, Estée Lauder’s brand sites generate 5.56% of all online sales – around $10.79B. In Southeast Asia, the number is even smaller primarily because of how early stage ecommerce is compared to Western counterparts. Yet as seen with SME Mabeza in the February Newsletter, businesses of all sizes are starting to mark their own online territory. Figure 1 shows that for enterprise level brands, there is indeed optimism in the channel. *These brands were chosen specifically because they use end-to-end services with aCommerce, decreasing the variables.

Aggregating internal data from 2015 revealed that webstores experienced 15% month-on-month GMV growth from Jan 2015 to Dec 2015 and averaged over 300% growth in the same year. The brand that grew the fastest was Maybelline then HP, Kiehl’s and lastly NESCAFÉ Dolce Gusto

Cost breakdown of a webstore strategy & ecommerce

The investment into a full strategy for a globally recognized business, which includes site development, store management, merchandising, logistics, fulfillment for one year is not black and white. There are many variables such as industry, product category, order size, volume of orders, packaging and more. To illustrate, here is a very rough breakdown of the process, but again, it does vary depending on the client and their needs.

Site development & backend.

To develop a fully integrated ecommerce store with Magento can cost anywhere between $20,000-80,000 USD. This price doesn’t include hiring a webmaster, someone technical who maintains and fixes the site issues and bugs, who can charge almost $3,000 USD monthly maintenance fee. Webhosting and bandwidth usage can also range anywhere between $2,000-10,000 USD per month, depending on the size of the business. How developed and fast the site is will directly and indirectly impact conversion rates, Google SEO rankings, average order values (AOVs), and repeat purchase rates.


Your team will also require a Store and Merchandising Manager. This process covers merchandising, inventory, promotions on site, updating images and more across the site as well as other channels such as Lazada, starting at $4,000 USD per month. This is not a low-level operational role; Store and Merchandising Managers for ecommerce sites make scientific, data-driven decisions to optimize product and promotional placements across the site. Good and average store managers often mean the difference between 1x and 3x your monthly average order values.


Fulfillment and delivery can range between $1-5 USD per order depending on location and weight of order, customer service requirements, etc. Based on your company’s volume, the cost of logistics will vary greatly. Due to low credit card penetration and inexperience with online shopping, last mile in Southeast Asia requires options such as cash-on-delivery and reverse logistics to appeal to customers trying ecommerce for the first time. 


Kevin Costner’s famous line in Field of Dreams, “if you build it, they will come,” does not apply to ecommerce shops. A brand webstore needs online marketing campaigns that include Google Adwords, Facebook marketing, dynamic re-targeting , email newsletters, and more. There is too much competition that exists online meaning sites will not sell unless they pay for the attention of the consumer. Even the most popular of brands have large marketing budgets.

Brands are expected to spend between 20-30% of sales revenue on marketing and advertising. For offline brands and retailers, the cost of sales (CoS) metric is typically a single digit percentage. However, for ecommerce, this number is higher, especially during the first two years of operations, when the main focus should be on building the brand, acquiring customers, and increasing the subscriber database. Once the number of repeat customers increases, revenues go up and CoS will go down. Multi-channel brands and retailers often struggle to build a case for ecommerce because the entrenched mindset still expects single digit CoS but to succeed online, brands need to look at the long-term benefits and set expectations for CoS accordingly.

Overall, businesses are looking to at least $100,000 USD investment over a one year period and this does not factor in the variable factors: logistics or marketing.

Why businesses are investing in stores in Southeast Asia stores in Southeast Asia are an important channel. As Fig. 2 in Graph 1 indicates, this channel was the largest driver of gross margins in 2015 with over 45% MoM. Beyond sales, there are three critical reasons why brands are building out their webstores: 

  1. Owning customer data – This is important because applying this data can increase customer lifetime value in the long run via targeted, personalized marketing, particularly O2O opportunities & loyalty reward programs.
  2. Total control of branding – For high-end businesses, brand identity is as important as the product itself. Owning your own webstore allows you to fully showcase and build a solid brand that your customers can identify with. You have complete freedom on how you wish to market your shop. 
  3. Higher margins – By selling on your own domain, there will be no expensive commission or payment processing fees. 

So is it worth it?

Yes, but the answer is not that simple even for enterprise level brands. These are some factors to consider beforehand:

  • How many SKUs does your brand have? If you are an FMCG brand who only sells toothpaste, consumers will not buy it online as it is a product that can be easily purchased offline amongst a larger selection (eg. grocery store). To drive traffic to your site, you can offer an immensely beneficial reason for shopping on your webstore. Take the Dollar Shave Club for example, an ecommerce business that generated a mass volume of orders from a small range of products ($1 razors). The secret? A subscription model. On the other hand, in the case when a major brand, like P&G for example, has a wide range such of toothpaste, shampoo, dog food and everything for the home, it may be worth creating a branded store.
  • What is the average order volume and average order value? Low-priced items do not make the investment into worth it unless coupled with other strategies such as order bundling, subscription models or charging delivery fees. 
  • How loyal are your customers to the brand? When fake items are rampant in Southeast Asia, customers are loyal to an outlet they can trust and a store guarantees that. People who buy high-end goods are also not necessarily bargain hunters and are looking for a site they can trust coupled with convenience.

As more entrants tackle Southeast Asia, like imminent Alibaba and Amazon, this may change over time, but our data shows that Lazada remains the most powerful marketplace for non-fashion and luxury brands at 36% of GMV. Other channels such as mobile, online pop-shops and other marketplaces play an important role as well.

The key take away from stores in Southeast Asia and channel data in figure 1 and 2 is that businesses should be taking a multi-channel approach.

“What our 2015 data shows is that it is important to realize that strategy is a complement and not a replacement of a wider distribution strategy,” said Raphaël Gaillot, Director of Merchandising at aCommerce.

And as ecommerce in Southeast Asia matures and more brands take the plunge, it is equally important for brands to be creative in ecommerce strategies because there is not a one-size fits all model.