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THE BACKGROUND

Asia Pacific really likes their whisky.

The gold liquid makes up 40% of multinational alcoholic beverage company DIAGEO sales in Asia, compared to only 25% of its global sales. One of the brands that sit under the behemoth is Johnnie Walker, the world’s most widely distributed blended whiskies.

The immensely popular liquor started out life in 19th century Scotland when John “Johnnie” Walker began selling it from his grocery shop. It was his son, Alexander Walker, who took the elixir global with a simple distribution model.

Shippers would take the bottled whisky with them on their journeys around the world, sell them, take a commission and handover remaining profits to the firm. Over 100 years later, the brand sells over 120 million bottles across 200 countries in bars, restaurants, breweries and lounges.

Four bottles of Johnnie Walker are consumed every second” – Pittsburgh Post-Gazette 

So the question arises, if in today’s digital world, people can order clothing, groceries, razors and even pets online, why not alcohol?

Companies like Drizly, Saucey, Paneco, Wishbeer and yes, Johnnie Walker, are attempting to offer their own solutions to ensure that consumers can enjoy a drink at any time of the day, but not many have found lasting success.

The Challenge

After shutting down its luxury e-tail site “Alexander & James” after a short four year run, DIAGEO publicly acknowledged that it was struggling to find success in online direct-to-consumer, referring to it as,

A pot of gold at the end of the rainbow that you need to keep on chasing.”

The company recently lost its place to Kweichow Moutai as reigning liquor market leader in China as the Chinese taste shifted to premium brands, especially for gifts and elaborate events.

DIAGEO Online

Moutai’s market capitalisation reached $71.5 billion on the Shanghai exchange in April, while Diageo’s London capitalization is $71.1 billion. Source: FT and Bloomberg.

In light of the company’s closure of “A & J” earlier this year citing that “consumers don’t look for specialty shops online”, the company is shifting focus to sell its products on platforms like Amazon and Tesco.

A partnership with a mass marketplace is appealing for two reasons; (1) it already has a large audience and (2) enables the sale of DIAGEO products online.

“We can raise awareness, but if they can’t buy the products, it’s void. [The partnership with Amazon] gives us that complete circle – we can entertain and educate viewers with how-to guides, and then make it as easy as possible for them to make the purchase,” said Johanna Dalley, World Class Global Director at Diageo Reserve.

“It’s the perfect storm – we are creating content that inspires people to buy our brands, and we can directly look at conversion and click-through rates.”

But what happens when strict regulations in emerging markets like Thailand prohibit the use of photos or celebrities to promote the brand’s lifestyle?

THE STRATEGY

Big C, one of Thailand’s largest retailers, offers a range of beverages from beer to wine online but the website states it cannot display any photos/logos/names of alcohol due to the country’s Alcoholic Beverage Control Act.

DIAGEO Online

Big C product selection for liquor on its website. Thailand has banned the promotion of alcoholic beverages sales but many companies risk the fine.

On the other hand, Wine Connection and Wishbeer, both operate websites in Thailand that contain photos of wine bottles, craft beers and sales. The companies are risking the 150,000 – 200,000 THB ($6,040) in hopes of a stronger payout.

A fair assumption given a recent study found that approximately 30% of Thai people started to drink alcohol after seeing images of their favourite celebrities posed with drinks.

If DIAGEO is willing to risk the fine, which no reports indicate it has ever been enforced, it has a strong direct-to-consumer opportunity in Southeast Asia – especially Thailand, Singapore and the Philippines – because of the region’s growing online adoption and preference for spirits and beer.

DIAGEO Online

Source: Chartsbin

DIAGEO, in particular Johnnie Walker, has long been eyeing emerging markets. Brazil, Mexico, Thailand, and China are some of the brand’s top seven global markets.

How has the company approached selling in these markets?

In Diageo’s case, the company has created a four-part ecommerce strategy:

  1. Developing a strategy and getting its ‘house in order’ (internal restructuring, hiring, etc.)
  2. On-trade and off-trade strategy
  3. Activating ecommerce channels (strategic partnerships with pure players, delivery companies, etc.)
  4. Direct to consumer through individual brand websites

Anyone looking at DIAGEO’s key moves in the online space cannot say the company hasn’t tried.

In 2016, the company announced a partnership with Deliveroo to offer an ‘alcohol-on demand’ service called thebar.com in certain areas in the UK. It’s a similar and popular strategy like Wine Connection’s partnership with delivery company, honestbee, in Thailand.

DIAGEO Online

honestbee home delivery of Wine Connection products.

Charles Ireland, Diageo GM for Great Britain, Ireland and France, says DIAGEO is spending more money on digital platforms like Google, Facebook, Instagram and even dating app Tinder, than traditional media for the first time. The goal is to use videos and other forms of content to educate and raise awareness.

“There is a shift towards content marketing within Diageo more broadly. In terms of monetisation, we will see more partnerships with Amazon from a commercial perspective. Other retailers are content hungry too, and are looking for content for their websites. [We will] provide them with content if it helps people click through to purchase,” said Dalley.

THE FUTURE

In Asia, the demand for alcohol is not the problem when beer sales consistently outpace GDP growth like in Vietnam since 2009. The biggest challenge is lack of awareness and oscillating regulations.

“In terms of direct to consumer [selling], I think there are consumer goods companies that are doing it quite successfully, but we haven’t quite hit a successful formula yet and we’re continually working on it,” says Charles.

Keep walking Johnnie, you’ll get there.

commerce marketing

Criteo Exec Connect 2017 in Bangkok

“The question that needs to be asked is not for more channels but have we maximized our efforts in the current ones?”

This comment comes from Scott Minteer, VP of Online Marketing at LOOKSI (previously Zalora Thailand), during an executive roundtable held by Criteo Exec Connect last week.

The once popular question, “should I go online?” has long passed.

In a room filled with the region’s top ecommerce players, enablers and forward thinking global brands – LINE, Lazada, Agoda, Beiersdorf, Meiji, aCommerce, Orami, Konvy, etc. – the question has now become, “how do I maximize the returns on my existing ecommerce assets?”

How can I drive a higher number of quality users to my app, my webstore, my marketplace shop-in-shop to increase conversions?”

When the majority of retail’s biggest names are trying to reach customers through a desktop/mobile website, marketplace official shop, and/or dedicated app, it’s easy to get lost in the digital space.

This is where quality commerce marketing technology comes into play.

Companies with vast ad networks mixed with new age machine learning such as Criteo, one of the world’s largest commerce marketing ecosystems, exist to help growing businesses like fashion retailer ZALORA and booking giant Expedia capture the attention of Southeast Asia’s most relevant 200+ million digital consumers.

Commerce Marketing

Alban Villani (Criteo), Julien Chalté (LINE), Thanawat Malabuppa (Priceza)

ecommerceIQ chats with Alban Villani, General Manager of Criteo Southeast Asia, Hong Kong and Taiwan, to understand where the region stands in terms of marketing maturity, how brands can optimize online performance and how businesses can adapt to gain more from marketing tech.

But First, Education.  

There are multiple ways that a business can drive traffic to its ecommerce store – banner ads, search keywords, SEO-optimized content, etc. – but marketers need to first understand if they are utilizing the right channels for their market.

Is the business driving traffic to the best channels?

Alban believes there are a few changes that need to happen before retail can really take off in the region.

  1.     Ditching a conservative approach

“Smaller brands need scale and personalization to compete on equal footing with larger retailers. Sometimes all marketing effort is still placed only on desktop,” says Alban.

The desktop started as the main device favored by consumers to shop on but in order to reach the new generation of shoppers using various devices to browse through multiple platforms, companies need to capture much more information than the conventional statistics reveal such as age, gender, geographic location, etc.

MatahariMall.com, one of Indonesia’s largest retailers, used a Criteo specialized retargeting tool to discover an online visitor’s readiness to purchase by assessing factors such as consumers’ online navigation patterns and what they add to ‘shopping carts’. This increased the e-retailer’s advertising ROI by 900%.

Once a customer has been segmented, simple dynamic retargeting tools can then display the most relevant ads in real-time to them later in the purchasing funnel and local brands can leverage targeted marketing to capture relevant shoppers outside the walls of their own assets on third-party apps like Facebook.

Take for example, Joan is browsing on the Lazada app for a Maybelline lipstick on the brand’s official SIS (shop-in-shop) during her morning commute to work. In the evening, she accesses her desktop computer at home to look at vacation photos on Facebook when she notices an ad that shows her the same lipstick she didn’t purchase earlier in the day. She decides to buy.

https://www.youtube.com/watch?v=1vgAQvWZMzk

Businesses of all sizes are slowly beginning to realize that channels are all connected and marketing efforts should reflect the same by tracking cross-device and cross-platform performance.

  1.     Investing into a mobile application

“They [brands] are already making money on web, so they don’t spend too many resources on app,” says Alban.

Southeast Asia’s affinity for smartphones has caused companies such as Shopee and LOOKSI to adopt a mobile-first strategy to reach a wider audience. By building an app with strong UX and ads targeted at encouraging installs, they can directly send alerts and deals with loyal customers.

Central Group’s Scott commented that majority of the LOOKSI’s revenue came from its app.

Commerce Marketing

LOOKSI app advertising

“We build brand awareness through desktop so it’s still needed but the conversion rate is higher on the app,” says Scott.

The popularity of mobile apps in the region and performance marketing tactics like in-app retargeting by Criteo increased Zalora’s app traffic and sales transactions by 9X from September 2015 to 2016.

More than 4 in 5 Thai respondents find it more enjoyable and convenient to use a retail and shopping app over a brand’s mobile website – Criteo APAC Research

“The key to mobile success is keeping the retention rate high because even a 5% increase could grow the value of purchase from anywhere between 20 to 90%,” shared Ronen Mense, VP Asia of Appsflyer, during the roundtable.

“You can talk about the future and what’s going to happen based on future technologies like progressive web apps, AR, VR,” he continues. “But the most important thing to focus on is where your consumer is engaging with your brand and service today. If you wait until a new technology reaches critical mass, it will be too late.”

“The focus isn’t only on installs anymore, the key challenge for brands is encouraging repeat usage and improving conversions,” says Alban. “Very simply, it costs more to acquire a new user than it is to retain an existing one.”

A Real Marriage Between Online and Offline Data

“Thailand started to slow down in [retail] progress a year and a half ago. What we have seen is mostly consolidation, meaning there are fewer ecommerce sites and fluctuating churn.”

Less opportunity has led to an emerging hybrid model where brands and ecommerce sites must work together.”

What Alban is referring to is a symbiotic relationship where ecommerce platforms like Lazada, Konvy, etc., build tools to enable sellers to gain more visibility on its platform and sellers in turn, share consumer behavior data – what do they like to buy? Which products do they purchase together, what time do they like to purchase?, etc.

“Lazada wants brands to be more involved, we empower them through our platform and technology, while brands bring in their deep consumer knowledge,” commented Aurélien Pallain, EVP of Marketing at Lazada Group, at Criteo Exec Connect.

Although marketplaces are slowly developing in-house solutions to help its sellers drive traffic to their shop-in-shops, majority are still heavily dependent on off site re-targeting agencies to acquire high volumes of traffic by tapping into a large publisher network.

“Data sharing is necessary to help companies maximize their online performance, it benefits all parties and ultimately the consumers by allowing brands to reach them with relevant offers,” added Julien Chalté, Head of Ecommerce at LINE Thailand.

To optimize existing ecommerce assets is to optimize available marketing tools through data.

But in order to capture valuable data, structured systems need to be in place internally in a business and this is where Thailand’s traditional retailers and brands lack maturity.

Criteo has the capacity to utilize a brand’s offline database to reach a custom audience online, but very few players in Thailand’s retail industry have tech-powered brick and mortar stores or “clean, usable data” from offline purchases.

“Criteo uses first-party data, never the third party, to build quality product recommendation so clients use us as a discovery tool as well as a conversion tool.”

“We can take data from the brand that they have collected from their CRM, loyalty cards, and offline transactions and match it with our recommendation engines for O2O [offline-to-online] marketing but not many businesses have this type of information readily available,” says Alban.

How can this be fixed?

By holding more brainstorming sessions like Criteo Exec Connect and building more partnerships within the ecommerce ecosystem between enablers, platforms and brands, Alban feels positive about the region’s development and piquing interest from brands looking to improve existing marketing efforts.

Commerce Marketing

Criteo Exec Connect 2017 in Bangkok

“Smaller brands must tap into an open commerce marketing ecosystem and use machine learning to connect shoppers to the products they need and love. Criteo’s technology allows them to engage shoppers with relevant experiences on both retail apps and third-party platforms directly driving sales and profits.”

“There’s actually a quicker speed of adoption in Thailand than Singapore between brands and agencies. The big difference is in the average revenue per user (spend) but most brands are more interested in looking at market potential.”

And where else has a brighter potential than Southeast Asia’s online future?

Download the Report2017 Criteo APAC Research: App Commerce Goes Big in Thailand

THIS POST IS SPONSORED BY CRITEO

“Sustainability is not a tech problem, it is a human weakness.”

A fireside chat about Thailand’s competitive advantage at Echelon Thailand 2017 revealed a few more interesting tidbits regarding startup up growth, government involvement, and investment best practices shared by industry expert Dr. Alex Lin, Head of Ecosystem Development at SGInnovate, an establishment that connects over 7,000 regional and global corporates.

Let’s dive in.

The government, the corporation & the startup

“Governments love corporations because they bring jobs and money. Startups hate corporations because they are so rigid. It’s all love and hate,” says Alex.

“The moment you build a lot of startups, corporations will move in because very simply, they cannot innovate. Innovation threatens the CEO, he doesn’t want anything to come in and ‘kill’ his job.”

So how should businesses go about innovation?

“What’s the definition of innovation? It’s looking at the status quo and changing it.”

“What is the job of the government? It is to uphold the law – follow the rules that they created. They aren’t able to change the law, only the top dogs, so are they innovative?” explains Alex.

Governments need startups to innovate, they need the corporates to provide the customer base, domain knowledge and infrastructure and they themselves need to push initiatives – all three units need to work together to create a healthy ecosystem for growth. But unfortunately, this doesn’t always end up being the case – why?

“A strong opportunity for Thailand is fintech because there is a large chunk of the population not being served, they are the unbanked,” says Alex. “If they don’t have a lot access to finances, per unit cost is higher and they can’t buy in bulk.”

So why are there still so many unbanked (approximately 72% of Southeast Asia to be precise)? Banks simply aren’t interested in them.

And if fintech startups are being mentored by a bank, they end up becoming products of the bank to serve their agendas.

“Over 600 startups that were mentored by a bank and none of them ended up serving the unbanked.”

What other business opportunities exist in Thailand?

“Digital healthcare is a good market for Thailand because the country is a very homogenous market, i.e. everyone wants to be whiter, while in Singapore you have a mix of tan is good, white is good,” says Alex. “Thais are also willing to experiment with treatments.”

“What about not-for-profits startups?” asks an audience member.

Dr. Alex Lin here pulled a Donald Trump (in his own words).

“Global warming is a great cause and I would gladly donate or attend fundraisers for these charities but I would never invest in them because there is no ROI.”

“If you are a startup, you need to think about who is going to pay you and if you can’t survive, you have to figure that part out first.”

‘Solve people’s problems first. Don’t build technology and try to fit it in somewhere.’

 

#EchelonTH2017

As ecommerce in Thailand is aggressively propelling forward, even companies with a rich traditional heritage such as Somjai, one of Thailand’s oldest and most famous stationery store chains, are going online to grow their sales channels.

And there is good reason for that – the number of customers shopping online is steadily increasing. According to Statista, 12.1 million consumers in Thailand are expected to make purchases online this year. This number is projected to grow by 15% within the next five years reaching 13.9 million in 2021.

Online shoppers in Thailand

In Thailand, 4.4 million online shoppers are 25-34 year olds and are followed closely by 3.9 million online users aged 16-24 years.

These two age brackets together make up two thirds of all online shoppers and the ratio is projected to remain consistent in the medium term.

Overall, it is forecasted that within five years, every fourth Thai will shop online, up from around every fifth now.

online shoppers in Thailand

But ecommerce user growth in the Land of Smiles is not even the fastest in Southeast Asia. In Indonesia, ecommerce user penetration is expected to almost double from 2015 to 2021. However, the amount customers in Thailand are expected spend on average online is predicted to soar.

In 2021, an online Thai buyer will spend $382 per year, which is 57% more than the expected spending of $243 per user in 2017.

What to keep in mind?

More online shoppers means more potential customers for businesses with online channels. Understanding the trends of what, when and where these customers buy is essential to capturing more of them going online.

  • Thais have more money to spend on shopping as Thailand has the third highest GDP per capita in the region after Singapore and Malaysia.
  • More companies in Thailand are seeing the benefits of an omni-channel strategy such as Zara, Uniqlo, Adidas who have invested in their own brand.com in addition to offline stores.
  • The tech-savvy generation (16-34 year olds) is accustomed to online shopping both on social media, e-marketplaces/brand.com.
  • Spending power will continue to rise and two-thirds of consumption growth in the period to 2030 will come from increasing per capita spending.
  • Research reports, tools such as Google’s Consumer Barometer and eIQ articles provide useful insights on Thailand’s online shoppers’ behavior and trends.

 


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Thailand’s ecommerce market has long been projected by Google and Temasek to become the second biggest in Southeast Asia after Indonesia by 2025 capturing nearly 13% of the market.

Online retail in the country is forecasted to reach $5.31 billion in 2021, an increase 1.8 times from a projected market volume of $2.95 billion in 2017.

But which categories are projected to have the largest sales? And which one will see the fastest growth in the next few years?

Thailand's ecommerce market outlook

Electronics & media ecommerce sales lead online shopping

Electronics & media is currently the leading ecommerce vertical in Thailand and will remain as such in the medium term as shown by Statista data.

The vertical includes the online sales of physical media (e.g. books, DVDs, games), consumer electronics (e.g. TVs, stereo systems) and communication devices (e.g. computers, smartphones, tablets).

  • Electronics & media ecommerce market in 2017: $1.25 billion or 42.5% of the total ecommerce revenue
  • Electronics & media ecommerce market in 2021: $1.77 billion or 33.4% of the total ecommerce revenue
  • Electronics & media ecommerce revenue 2021 vs 2017: +40%
  • Annual growth rate (CAGR): +9.1%
  • Market’s largest segment: Consumer electronics with market volume of $834 million in 2017

Currently, there are only a few players in Thailand that have specialized on this vertical: JIB, Advice, Power Buy, IT City, Banana Store, Munkong Gadget and HP.

Apart from consumer electronics stores, book shops Asia Books and Kinokunya also sell physical media through their own online stores.

While it is the largest ecommerce vertical, its revenue growth pace is projected to be the slowest among other verticals within the next five years.

Apart from specialized ecommerce stores, businesses planning to sell electronics & media should note that online marketplaces also serve as popular sites to purchase such gadgets from.

51% of online buyers reported buying a mobile phone on a marketplace.

Brands opting to sell on a marketplace have a variety of tools available to increase traffic and conversions for their shop-in-shop.

Fashion ecommerce revenue to grow the fastest

Fashion ecommerce sales are projected to increase 2.5 times within the next five years, the fastest among verticals. Fashion is and will remain the second biggest vertical by ecommerce revenues in the medium term.  

  • Fashion ecommerce market in 2017: $525 million or 17.8% of total ecommerce revenue
  • Fashion ecommerce market in 2021: $1.31 billion or 24.7% of total ecommerce revenue
  • Fashion ecommerce revenue 2021 vs 2017: +149%
  • Annual growth rate (CAGR): +25.6%
  • Market’s largest segment: Clothing with a market volume of $345 million in 2017

12% of consumers in Thailand buy clothing & footwear on a few specialised fashion online retailers. The opportunity offered in the country has recently been noted by big global players like Uniqlo and Zara that have opened brand.com stores. It is only a question of time when other big players will follow online.

A large portion of consumers – 25% – shop for fashion on social networks like Facebook, Instagram and chat app LINE.

More demand for toys, hobby and stationery products

Selling online toys and baby items, sport and outdoor products, garden products, hobby and stationery (e.g. musical instruments and office supplies) offers another opportunity for businesses in Thailand.

This vertical is expected to double to $1 billion within the next five years. The good news is there are only a handful of online retailers targeting moms & babies (Orami) or selling office supplies (OfficeMate and Somjai).

  • Toys, hobby & DIY ecommerce market in 2017: $506 million or 17.2% of total ecommerce revenue
  • Toys, hobby & DIY ecommerce market in 2021: $1.03 billion or 19.4% of total ecommerce revenue
  • Toys, Hobby & DIY ecommerce revenue 2021 vs 2017: +103%
  • Annual growth rate (CAGR): +19.4%
  • Market’s largest segment: Hobby & stationery with a market volume of $270 million in 2017

Furniture & appliances to grow steadily

The market projections foresee more Thais will go online to buy furniture and home appliances in the future as the market of this vertical is expected to grow by 80%. Local names such as Index Living Mall, Home Pro and SB Design Square are already pursuing omni-channel strategy having both online and offline shops to reach their customers.

  • Furniture & appliances ecommerce market in 2017:$475 million or 16.1% of total ecommerce revenue
  • Furniture & appliances ecommerce market in 2021:$855 million  or 16.1% of total ecommerce revenue
  • Furniture & Appliances ecommerce revenue 2021 vs 2017: +80%
  • Annual growth rate (CAGR): +15.8%
  • Largest segment: Home appliances with a market volume of $259 million  in 2017

Food & personal care

This vertical is the smallest compared to the others and includes sales of food and beverages, cosmetics, pharmaceutical and medical products. However, its predicted annual growth rate of more than 16% suggests a strong demand in the next five years.

  • Food & personal care ecommerce market in 2017: $186 million or 6.3% of total ecommerce revenue
  • Food & personal care ecommerce market in 2021: $340 million or 6.4% of total ecommerce revenue
  • Food & Personal care ecommerce revenue 2021 vs 2017: +83%
  • Annual growth rate (CAGR): +16.4%
  • Largest segment: Personal care with a market volume of $121 million in 2017

Looking ahead

Thailand’s ecommerce market as a whole is expected to grow with an annual growth rate of nearly 16% in the next five years and online spending per user is expected to nearly double.

Those who buy online on average this year are also expected to spend $243, whereas in 2021, it is projected that every fourth Thai will buy online and on average spend $382. The future looks bright.


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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