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Here’s what you should know today.

1. Carousell wants to help you sell a product in 3 seconds

“Can we, now having five years of experience, data, and learnings, create the next evolution of classifieds? Can we make selling a three-second process – snap a photo and that’s it?” ponders Quek Siu Rui, Carousell’s CEO and co-founder at Tech in Asia Singapore 2017.

Machine vision – the ability for computers to see and recognize objects like humans do – will give Carousell the ability to match a photo uploaded by a user to its database of items. Combine this with its pricing data from tens of millions of transactions, and the app could recommend to users what price to set for a product.

Carousell has grown from its humble beginnings, starting with a 3 persons team, which has since expanded to over a hundred. It has also made a series of acquisitions:

Its purchase of used cars marketplace Caarly is noteworthy because it announced Carousell’s intent of conquering car classifieds. Carousell’s move into cars is simply the result of its users growing up. It observed more users buying and selling cars, baby and kids items, furniture, and home appliances.

Read the rest of the story here.

 

2. Hong Kong’s Qupital raises $2M led by Alibaba to finance invoice loans for SMES

Qupital, a one-year-old Hong Kong-based startup that addresses cash flow issues for SMEs, has closed a $2 million seed funding round.

The startup wants to free small companies on tight budgets from the restraints of unpaid invoices. That’s to say that a large chunk of an SME’s working cash flow is locked up in invoices that may take up to 90 days to actually pay out.

Qupital tackles that issue by getting companies to take a loan to cover 80-95 percent of the value of the invoice

With an estimated 300,000 SMEs located in Hong Kong, there’s an attractive initial market to be tackled. The link with Alibaba will help Qupital reach traders and SMEs — which represent its core focus . While the startup said there’s no precise plan on new locations yet, they hinted that countries with strong export sectors, such as Vietnam, Taiwan or Thailand would be among the obvious choices.

Read the rest of the story here.

 

3. Go-Jek integrates Go-Med into HaloDoc app

Previously a part of the original Go-Jek app, the Go-Med service now complements HaloDoc’s online consultation service, turning it into an end-to-end health platform.

The partnership between the two companies began when Go-Jek took part in HaloDoc’s undisclosed pre-Series A round in April 2016.

The companies said that they have made efforts to simplify the booking and transaction process, which results in its ability to cut down a typical order time from 88 minutes to 40 minutes. HaloDoc has to renew partnership will local pharmacists as part of an effort to ensure the accuracy of their inventory.

For the time being, users also have to stick to cash payments for the service as Go-Jek’s e-wallet feature Go-Pay is not yet integrated into the platform.

Read the rest of the story here.

A bit about Malaysia

Malaysia is one of Southeast Asia’s smallest nations, but that hasn’t affected its digital ambitions. In 2015, Malaysia’s ecommerce market was estimated at $1 billion and is on equal footing with Singapore in terms of market size and developed infrastructure, which may explain why the nation’s ecommerce industry is expected to increase by 8X to $8 billion within the next ten years.

It is no surprise then, that Alibaba recently announced the construction of a regional distribution hub (e-hub) that will act as a centralized customs clearance, warehousing and fulfillment facility for Malaysia and the Southeast Asian region in order to speed up clearance for imports and exports. The hub is set for a launch in 2019.

Out of the e-hub was born the Digital Free Trade Zone (DFTZ) – a joint initiative by Prime Minister Najib Razak and Alibaba Group to accelerate Malaysia’s digital roadmap that aims to double ecommerce growth from 10.8% to 20.8% by 2020.

What is the free trade zone?

In March 2017, Malaysia formally launched the Digital Free Trade Zone initiative at the Global Transformation Forum. This is the first digital global trade platform beyond China, and the Malaysian government believes that a collaboration with Jack Ma will increase SMEs’ contribution to the nation’s GDP, which currently stands at 37%, despite 97% of businesses in Malaysia currently being micro or SMEs.

The free trade zone is composed of three zones:

    1. The satellite services will facilitate end-to-end support and knowledge sharing for companies targeting the Southeast Asian market.

 

    1. The eFulfillment Hub will be connected to Hangzhou’s Cross-Border ecommerce pilot zone – Alibaba’s HQ – via Alibaba’s OneTouch platform. According to VulcanPost, it will digitise many of the trading operations like customs clearance, foreign exchange services, financing services and logistics solutions which will ease bilateral trade.

 

  1. The eServices platform is virtual and will complement the satellite services and Ma’s e-hub by digitally connecting users with government and business services.

Through DFTZ, the purchase of goods via the Internet worth $276 and below will be exempted from paying tax. Currently, goods worth $115 and below purchased online were not subjected to tax.

But what does the free trade zone really mean?

The partnership between Jack Ma and the Malaysian government was born from Ma’s concept of providing SMEs the infrastructure and overcome difficulties involved in conducting global trade – namely clearance and inspections.

If successful, DFTZ has the potential to double the growth rate of Malaysian SMEs’ goods export and create 60,000 direct/indirect jobs by 2025.

It is also estimated to support US$65 billion worth of goods moving through DFTZ.

“The establishment of DFZ would stimulate the economy as it gives room for online traders to compete in a healthy environment. Locations of the businesses will no longer be a hindrance to traders. For instance, a trader in Kota Belud would have an equal opportunity to market or sell his items, as a trader from the Klang Valley,” said Abdul Rahman, Head of Economic Planning Unit.

Although it is currently too early to quantify the benefits of the digital free trade zone, analysts have predicted that its launch will be good for the logistics sector. More specifically, for Malaysia Airport Holdings (MAHB) and postal company Pos Malaysia’s subsidiary, KL Airport Services.

The heightened connectivity should propel the growth and development of ecommerce in the region, lower trade barriers and benefit local players due to increased opportunities.

However, it isn’t simple infrastructure that Malaysia is building.

In order to create a functional logistics ecosystem that can improve regional level trade, it requires collaboration from various parties, companies and more. The success of the digital free trade zone also depends on the rate of retail growth – both offline and online in Malaysia and the region because it will need to grow in tandem with the scale of the free trade zone itself.

To leverage from the initiative, smaller players and SMEs need to scale their businesses to ensure that they are ready to utilize the ecosystem.

As this is the first time the free trade zone has ventured out of China, it simply cannot be a copy and paste of what has worked in the past with Chinese SMEs. Smaller Southeast Asian companies currently need help in shaping their businesses, along with help in lowering trade barriers.

Although the free trade zone will surely bring opportunities, SMEs will also need to be ready for 2019, as increased opportunities often come with increased competition.

When talking about the potential of ecommerce, the real opportunity isn’t in the saturated B2C sector, but it’s almost hidden in B2B.

The sector is pegged to grow more than twice as much as B2C globally by 2020 and expected to generate $6.7 trillion of revenue but in most Southeast Asian markets, it doesn’t nearly get as much as attention.

The ECOMScape series shows only a few players have dabbled in B2B and in Indonesia, one of them is Ralali, the country’s first B2B ecommerce marketplace, founded in 2013 by current CEO, Joseph Aditya.

The company’s beginning

Launched at a time when most existing websites were catalogs, Ralali generated IDR 10 billion or $750,000 in revenue during its first six months selling industrial supplies to manufacturers, contractors, and automotive businesses.

Ralali B2

The company’s early robust growth attracted the attention of investors and in May 2014, Ralali bagged an undisclosed amount of seed funding from East Ventures and raised another $2.5 million from Beenos Plaza and Cyber Agent Ventures a year later in June 2015.

With financial backing in hand, Ralali was set to expand its business further but the company, once specialised in MRO (Maintenance, Repair, and Operational) products and office supplies, soon found that the current business model was not scalable.

“There is simply not enough reason for big companies to completely shift their procurement process online. And the problem with having big companies as a main source source of revenue is that it’s a huge risk if one decides to go elsewhere,” explains Aditya.

Ralali decided to change its strategy to be able to scale up at the rate they wanted to.

Reaching an untapped source

While assessing the pool of potential customers, they found a glaring source of untapped potential in Indonesia — small and medium enterprises (SMEs).

In Indonesia, the latest data shows that out of all the country’s registered businesses, big enterprises only make up less than 1%. The rest – or almost 58 million companies – are SMEs and they contribute 58.92% of total GDP.

The government has also expressed its support through digitalization.

The problem, however, was and is that most of these businesses are still stuck offline – only 9% have dabbled in ecommerce and only 37% have basic online capabilities.

But this wasn’t the only reason Aditya shifted his focus to SMEs, he also wanted to help even out the playing field.

“As a tech company, we are working to make life simpler and to empower more people to become efficient. Targeting the big corporations with their already vast and readily available resources, is not gonna make much impact to their business. It’s unlike the impact we could make with SMEs,” says Aditya.

With this in mind, Ralali shifted its focus to cater to SMEs and began making the adjustments needed to achieve this goal.

Business starts here

To attract more SMEs, Ralali began introducing new features like the RFQ (Request for Quotation) and included more categories on their website by expanding its SKUs. As of today, there are more than 200,000 SKUs listed under 61 sub-categories in 12 categories available on Ralali, from Machinery & Industrial Parts to Food & Beverage.

“When you’re a big company, vendors are practically queueing outside your office to get your business and you have the pick of the lot. SMEs rarely have any bargaining power,” commented Aditya.

The RFQ feature allows SMEs to select from a variety of offers made from vendors on the Ralali platform so they can find the best option for their business needs. It also helps Ralali determine what customers want in order to optimize its product selection.

Facilitating SMEs to further their business

To become the supplier choice for SMEs, Ralali changed its model to a wholesale marketplace allowing other suppliers to offer bulk purchases on its platform with tier pricing.

Ralali B2B SMEs

Right now, there are more than 3,200 suppliers registered on the platform. The company is continually scouting for sellers through offline activities with various business associations and communities geared towards educating SMEs about the benefits of digitizing.

Ralali facilitated annual transactions are worth more than $150 million or IDR 200 billion, with a basket size per transaction ranging around $1,500-2,000.

Despite focusing on SMEs, big corporations make up for 3-5% of customers for the marketplace.

Empowering the SMEs ecosystem

Not only is the company selling to small, medium sized businesses, it is also providing the skills and knowledge needed to take the first steps online.

The company recently signed a partnership with the Jakarta Cooperatives, Micro, Small, and Medium Enterprise and Trade Agency to help its members expand their businesses online.

Under the partnership, Ralali will provide training and assistance to the SMEs for one full year. Aditya says a team of Ralali consultants are going to share insights on the workings of an online marketplace and how to set up a business on the platform.

“By doing this training, we hope to help these smaller businesses increase their transactions online. Ralali wants to be the platform that connects businesses from Indonesia to all over the world,” shared Aditya.

Ralali B2B SMEs

founder Joseph Aditya (second from right) with the representative from the Jakarta Cooperatives, Micro, Small, and Medium Enterprise and Trade Agency

Here’s what you need to know today.

1. Lazada Indonesia to on board SMEs

The Indonesian unit of Lazada said it plans to focus on adding small merchants to its online marketplace, emulating the strategy of Alibaba Group Holding. According to Florian Holm, co-CEO at Lazada Indonesia, Lazada also plans to enable some merchants to sell products to shoppers in China through Alibaba’s Taobao ecommerce platform.

Read the rest of the story here.

 

2. Alibaba’s robot maker raises funding

Geek+’s automated pods look like those from Kiva, the American startup snapped up by Amazon for US$775 million in 2012. The larger Geek+ bot can transport 1,000kg, while the smaller one scoots up to 100kg. They’re designed for any warehouse or factory where bits and pieces need to be moved to be accessed by human workers.

The startup says it has over 300 robots already in commercial use across China.

Its $14 million round was led by Vertex Ventures, a spin-off from Singapore’s state-owned sovereign wealth fund, Temasek.

Read the rest of the story here.

 

3. Amazon will now tell Prime members what to wear via “Outfit Compare” 

In the latest version of the Amazon shopping app, Prime members will find “Outfit Compare” in the sidebar navigation under the “Programs and Features” section.

 Outfit Compare prompts shoppers to share two photos of themselves wearing two different outfits they’re deciding between. A minute later, the user will get a response from an Amazon stylist who will tell them which outfit looks better. This determination will be made based on a number of factors, including how the clothes fit, what colors look best, how they’re styled, and what’s on trend.
Read the rest of the story here.

 

4.  Community Chatter: Adidas focuses on online operations

Source: aCommerce Group CEO, Paul Srivorakul’s Linkedin account

Here are today’s top ecommerce headlines.

1. 2C2P to work with Diners Club International to increase acceptance at Southeast Asia’s ecommerce merchants

Alliance will extend acceptance of cards running on the Discover Global Network to Southeast Asian merchants.

2C2P will provide its merchants with single-source electronic payment services for the acceptance of Discover Global Network, which includes Discover cards from the United States, Diners Club International as well as its affiliate cards such as BC Global Card from South Korea, Elo Card from Brazil and RuPay from India.

Read the rest of the story here

 

2. Alibaba and ecommerce festivals: Europe’s gateway to China

Businesses around the globe are responding to the increasing demand for foreign brands by Chinese consumers. Indeed, in 2015 alone the number of overseas companies operating in China’s free trade zones doubled.

One example is Tmall Global’s annual 8.8 Shopping Festival in China, focused on showcasing top-selling products from global brands to Chinese consumers. The recent 2016 event featured more than 2,000 quality products from a variety of overseas markets and include fashion, cosmetics and even nutrition supplements.

Read the rest  of the story here

 

3. Samsung Pay, partner banks launch offers for Thai customers

Samsung Pay and its financial partners have introduced exclusive offers for customers who make payments using a partnered credit card via Samsung Pay. The offers are provided in partnership with Citibank, Kasikornbank, KTC, and SCB.

Read the rest of the story here

 

A Singapore-based startup, Funding Society raised $7.5 million of Series A round, reported Tech Crunch. The company allows SMEs to access loans from individual or institutional lenders. The fund will be used to expand the operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors. 

The company claimed it has paid out $8.7 million across 96 loans to date and has 94% repayment rate. Fund Societies CEO, Kelvin Teo said the data shows the company’s reliability.

Funding Societies is primarily focused on working capital loans, to finance the day-to-day operations in a company. In Singapore, the average loan size is $67,000 ($90,000 SGD) while the number falls lower to $18,500 (SG$25,000) in Indonesia. It charges an origination fee to the borrower (3-4% in Singapore, 5-6% in Indonesia) and 1% monthly fee to the lender. It claims to have an approval rate of between 15-25% for loan applicants.

The fund will be used to expand its SME loans operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors. 

In addition to the expansion, the fund will also be used to comply with myriad of regulatory variations in the three countries where it currently operates. It prided itself on being compliant with regulations and ensuring the safety of investors money.

“Industry regulation has been announced in Singapore, but it will still take some investment to reach that level of compliance,” Teo added. Likewise, in Indonesia, he said the company is working with regulators to introduce a framework to regulate peer-based lending.

Outside of compliance and expansion — including expansion beyond capital city Jakarta in Indonesia — Funding Societies is planning to invest in its product to streamline its services for borrowers and lenders, add more services to make the investment options more tailored to the investor needs. The company target to reach breakeven in two-to-three-years.

A version of this appeared in Techcrunch on August 9.  Read the full article here