Posts Tagged ‘e-commerce’

Shopify, Off The Rack Asia – e-commerce hots up in Malaysia

A trolley in loveSome interesting news happening in the Malaysian e-commerce space today.

  • Shopify, the Canadian company, is now in Southeast Asia thanks to SingTel backing. Singapore, Malaysia, Indonesia and India get access to Shopify, and by September, you can work with local payment gateways as SingTel will help Shopify get onboarded. In Malaysia, that means working with MOLPay (NBEPay) or iPay88. Both have woefully terrible pages that break the flow.
  • With Maybank pushing e-commerce and “blogshops”, I’m surprised they didn’t have the foresight to do this. Shopify could have chosen Malaysia as a headquarters, no? Alas, the sufferance when Singapore is your much more welcoming neighbour.
  • I read about a startup, Off The Rack Asia, that aims to compete with Zalora/FashionValet/Rakuten/etc. The story broke at FZ, which is also worth a read. They don’t disclose how much Cradle gave as a grant? It’s anywhere between RM150,000 – RM500,000 isn’t it (CIP150 or CIP500)?
    • This is great for merchants. They have more places to distribute their goods. Love that they’re supporting locals.
    • Target market is 18-35 – I think that’s two broad, you get at least 2 distinct age groups there, if not three!
    • I checked out the site – nice design. I notice that the items are generally quite pricey, so definitely not mass market fast fashion prices.
    • Checkout page can do with improvements. (I must accept terms but can’t read it via a clickable link?) Payment page basically sucks, it heads to MOLPay.
    • No idea if they’re drop shipping or holding inventory. Zalora started via drop ship, but soon realised that fulfilment was an issue, so they have a warehouse with inventory.
    • Zendesk is their Q&A platform (odd choice that you’d pay for such a service).

    Overall, I’m hoping to see improvements in payment gateways with lobbying by all these players. And I wish the girls at Off The Rack the best, it’s a tough space to be in, but one that can only grow as Malaysia itself grows digitally (as does the region).

    Malaysian postcode database

    I’ve been thinking about simplifying e-commerce checkouts in Malaysia.

    At bare minimum you need:

    • Name
    • Email address
    • Phone
    • Street address
    • Postcode

    State can be derived from Postcode. Country can be set as default, with the option to change it to something else (so a pull-down).

    I found MalaysiaPostcode as a useful database. It looks like scraped data from POS Malaysia Location Finder.

    Why a physical retail store won out over an online purchase today

    I love to buy stuff from Amazon, so why not try buying stuff from Lazada right? This was the case today for the purchase of a juicer (no, not for me). In the end, ESH, a physical store won. Why did I choose physical over e-commerce?

    Seeing a list of juicers is great. But how do I know how they work? How do I know which one is easier to clean? How do I know if anecdotally, one comes back more for warranty claims? How do I know if a juice extractor can only juice 2 oranges at one go, then requiring a one minute break (maybe I can find this in the manual, but really, when was the last time a consumer looked at a manual?).

    So, first problem – not being sure which juicer to buy. Lazada is new and lacks customer reviews. In fact, I’m not sure there will be quality customer reviews that will make me trust it anyway. Physical wins out totally here as you can touch the juicers and get guided.

    Oh, but it’s surely cheaper online, right? Wrong. Every juicer in store had a retail price, but it also came with a “best price”. If you’re Malaysian, you also probably love to haggle – try doing that at an online store! Believe it or not, the best price matched the Lazada prices hands down.

    Delivery times? 4-6 business days seems to be standard on Lazada. At ESH, I could walk out with the item immediately.

    Payment? ESH like any good physical retailer accepts credit cards (Visa/Master only though). They also give you Bonuslink points. Lazada is no different, with B.Card points.

    Warranty is a big deal. If something goes wrong, I can just walk into ESH and they’ll handle it for me. My family & I have been buying from them for decades. If something goes wrong with my purchase from Lazada, I’ll probably have to call up the individual manufacturer and work it out myself. After-sales service is very important – what has online done for improving this space?

    Now, the juicer we finally settled on for the gift was a Philips HR1871. It was RM11 cheaper on Lazada at RM688 (we paid RM699, best price rate with no haggling today). However at ESH it came with another attachment: a juice extractor. It’s a whole other attachment, and if you buy it retail from other brands it would set you back RM130 or so (even on lazada). 

    What did all this cost? A short drive (at most 2L of petrol burnt) as well as a RM0.60 sen parking fee. The time spent would have been the same, if not more online, as one would have to watch videos elsewhere, read reviews, etc.

    Leaves a lot to be desired for online shopping when it comes to white goods. Notice that if I were purchasing a tablet or cellphone it would be completely different (I can take the cheapest price since I have some domain knowledge). 

    I wonder what other experiences are…

    AppStore/PlayStore helps bridge the gap to using credit card transactions online

    My RM10 latte @ Artisan Roast. I can safely say that it's great coffee. Place a little too hip for meDoes your mother have an iPad? Know people in their 40′s playing games on their smartphones or tablets?

    I’m starting to see iPad’s transcend ages. People are using their tablets from the time they are a year old to the time they are in their 70′s (yes, personally seen these age ranges).

    The touch interface is amazing. A handheld computer without a keyboard – who’d have thought this would work?

    Buying an application from the App Store convinces you that its a good idea to use your credit card over the Internet.

    When I read A Generation Gap? Not on This Website I was quite convinced that there’s more to Halsbrook than meets the eye.

    E-commerce in Malaysia is growing. People are getting used to buying things online. A lot still happens via bank transfers (which suck for e-commerce unless you use a capable payment gateway). Getting convinced that its a good idea to use your credit card online is an important first step. The App Stores (or google Play Store) bridges this gap. 

    The state of e-commerce payments in Malaysia: still terrible

    Today I tried to checkout RM450 using iPay88. They only accept Visa or MasterCard credit cards, so I pulled my wallet out.

    I thought I would use the Citibank card today. I got sent to an error page. So I clicked the back button to head back and thankfully this worked.

    Error Finding Page

    I dug further and found a Direct Access card. I have to choose an issuing bank and now had to think a little harder to figure out that this card belongs to CIMB. I was sent a code via USSD verification which was valid for a mere 3 minutes. I had to run to my phone which was charging upstairs and run back down to make the transaction.

    Later I see an SMS from Citibank giving me my OneTime PIN that is valid for 4 minutes. I never even got the chance to use it.

    Now, lets say I was the average consumer.

    1. What would I have done with the error page?
    2. How would I have reacted to seeing one design then seeing the iPay88 page? Seems close to an attack. Stripe doesn’t have this problem.
    3. How quickly would I have retried the same credit card before I gave up on the online purchase?

    Anecdotal evidence from several online stores that I’ve been involved in suggests Malaysians are a patient bunch. They try up to three times for a credit card transaction before abandoning the cart. Some will email because its clear they really want the item. Most truly just give up.

    E-commerce is slated to be big. But fixing payments should be crucial.

    My take on Rocket Internet

    Drip, dropI’ve wanted to write about Rocket Internet ever since reading an article that appeared in SGEntrepreneurs, written by my friend Bernard Leong, titled Are the Samwer Brothers, a.k.a Rocket Internet really that bad for Southeast Asia? That article appeared towards the end of March 2012, and anyone that knows me closely knows that I’ve been having an epic year traveling for business (more on that later). What prompted me to write this today? Reading Bernard’s next article in the series titled Is there any method in Rocket Internet’s madness? That and I’m taking a much needed break, sitting in a venue older than the nation Malaysia itself, overlooking the place where Malaysia fought for independence from the British, and sipping a cold Hoegaarden from the tap.

    If you haven’t read those links, consider it a pre-requisite. Go on, I’ll wait.

    In the US-based media, Rocket Internet are looked at as copycats. Should we shun copycats that don’t improve on things? No. Very little uniqueness comes out of things, and its rare that true innovation happens. The iPhone, the iPad, the Macbook Air. Those are true innovations that every other manufacturer out there is trying to copy. Its very much similar in the software world where things get rehashed. Timing & execution play an important role to success, naturally.

    Free market economics are also interesting. You can launch products that are clones of Pinterest, but if Pinterest is where it’s at, that’s where people are going to be. I remember in the early days of Twitter, there was many a clone, even one in Malaysia called Pacmee, funded by an investor friend of mine. They put 18-months of good work into it, added the local spin to it, and bam, Twitter won anyway. Welcome to free market economics.

    Caught in the tracksThis is similar to AirBnB clones like Wimdu (Rocket Internet). You might add your local spin to things, like my friend recently launched in Japan, homerent.jp, but in 18-24 months you’ll see if a local spin makes a business. I’m rooting for my friend, especially since the Japanese market is very closed, so here’s a cheers to them. Plus they have a great story to boot. (A friend is an investor at iBilik focused on the south-east asian market – I too wish them all the success).

    At the end of the day, free market economics picks which service wins. What you do to make yourself a winner is down to creative smarts, growth hacking, and most importantly gaining user traction.

    South-east Asia is unlike any other. We call ourselves ASEAN, but we have no single currency, we all speak different languages, we have no Schengen agreement and even though there may be free-trade-agreements in place, we all come with our own obscure laws. We don’t even have a beer you’ll call an Asian beer :-) As Bernard pointed out, we seem very much like Europe.

    What is Rocket Internet getting right? Execution – at a great speed. Scale. With failing fast built-in.

    The Next Web carried an article on this topic too. I quote:

    These people don’t complain about payment gateway issues for their e-commerce sites, they just find ways to make it work. They won’t wait, and that’s a winning attitude.

    I know the pain of dealing with Malaysian payment gateways. I guess I should say we should be thankful that we even have payment gateways. Most people don’t even bother dealing with these gateways and end up doing dodgy hacks like saying they’ll accept transfers from cash deposit machines, direct bank transfers, or worse, cash on delivery. This is not e-commerce. This may be commerce facilitated by electronic means, but it is in no way seamless or meets my standards of being called e-commerce.

    That aside, I applaud the Samwer brothers doing this. Sure it isn’t very friendly to the smaller entrepreneur. Now you just have to learn to be more cunning. Execute better. Overall, I feel small entrepreneurs will do even better with this market as there’s lots of benefit to Rocket Internet spending the money to educate people about e-commerce (just see my thoughts on zalora & zalora II).

    The one’s complaining were the ones already used to building copycats with a lot less money & execution flair. 

    That’s not to say this model hasn’t got its issues. As Bernard points out, they’ve had executives come & go, lots of complaining employees, and they’ve even shut down services. I’ve been told by many that they’re also cheap. And customer service is generally terrible (this is anecdotal, like how an iPod hasn’t arrived in 73 days – I have never purchased anything from a Rocket Internet company). I’ve heard that seller relations aren’t all that awesome either.

    IMG 0198Everything has hiccups. Its how quickly you learn from them and execute better. It’s not easy to build a Zappos culture overnight, and frankly speaking, South-East Asian customer service is in the doldrums overall. Many businesses can take to learning from how 5-star hotels run their operations in Asia (see service at InterContinental Bangkok, InterContinental Singapore, Grand Hyatt Singapore, Hyatt Regency Kuantan Resort and the like). The culture of Delivering Happiness is generally non-existent.

    Bernard suggests this too:

    The inconvenient truth is that the Samwer Brothers are excellent in cloning the operations and the IT platforms behind, but they are not good at cloning companies where the real strength is in the services part of the company.

    Are operations cloned rather well? The IT platforms from my knowledge are all built within the market. This is why some markets have to deal with Google Spreadsheets and some markets have real built-in systems. 

    Will there be a successful exit for one of these clones? Who’s to say. Anything is possible. It seems that JP Morgan has bet on Rocket Internet, but that’s not an underwriter that has much clout in general today. See where Facebook is.

    Fire @ CrownIf you’re a South East Asian entrepreneur, don’t look at Rocket Internet companies as competition. They’re cloners. If you’re planning on building something remotely original, or a mashup, good on you. Execute smarter. If you’re planning on doing a clone, make sure you excel in the local touch. There’s no shortage of advice and if money is tight, remember to do things in a lean fashion. Your buddies at Rocket Internet are well funded (yes, the Euro is declining, but its still better than any single south east asian currency out there), but have a different passion & goal in their execution. Passion will show in good customer service.

    If you are Rocket Internet, good luck with the cloning. I’m never a fan of unoriginal copies, but you’ve brought clear execution to what was already happening in the space anyways. This is why I respect you. I wish you the best of luck, and congratulations with getting investment dollars. It means you’re here to stay. Continue ensuring that people are comfortable with e-commerce transactions. Lobby to improve it with governments. But please don’t turn people off with terrible customer service. Asian customers can take a lot of crap, just don’t go overboard.

    If you’re a US-based company reeling as to what Rocket Internet is doing in South East Asia, remember that you caused this to happen. You chose not to expand here and now you’re paying the price. Plain and simple. I’ve had my fair share of conversations with US-based companies that seem to think Asia is the last place to expand to. That’s a mistaken notion people.

    All in, there’s plenty that’s happening in the US that is still not available in South East Asia. Plenty more to clone. Much more to disrupt.


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