Online shopping is something incredibly familiar to Singaporeans. With a click of the mouse, we could get virtually anything off the Internet. We speak to Danny Lim, CEO of comGateway to find out about what he thought about the competitive landscape of freight deliveries. The small and medium enterprise (SME) helps shoppers in Singapore gain access to a wide range of products from the US-based online stores by acting as the intermediary in the shipping and payment process.
It all started in 2005. Danny saw a vacuum in the e-commerce market, an opportunity to give people the ability to shop on US merchant sites. He shared, “We were looking at US$200 billion made by Asian consumer made on US web merchants. [...] 20 million purchases a year, spread out [across] Japan, Australia and Singapore.” Boldly, he started a digital shopping concierge, which has over 500,000 registered users right now.
Today, according to Danny, there are 50 to 70 similar companies in a huge market. But he was not complaining when he told me that over the phone. “Incremental competition is good; if there isn’t, we will be very worried.” This competition, rife as can be, only proved his belief that this market is huge and still, full of potential.
Danny shared that they do not have the ages of their users as they do not want to be too intrusive. The only thing they require is gender, which leaned towards more females than males. However, he maintained that the male segment is “pretty well represented”. Key markets include Singapore, Australia, Taiwan, Malaysia and New Zealand. He added that in terms of purchases, in no particular order, most consumers go for beauty products, fashion items, kids’ clothing, health supplements and electronics.
Out of curiosity, I asked Danny what the biggest shipment comGateway has seen so far is. He thought for a while, then answered, “It’s a close fight between a kayak from Australia and a mattress in Hong Kong.”
Now, Danny might be the CEO of a global company, but he does not try to give a false impression as to how his company is doing. He said, “If I were to pick a random sample of people in any country that we operate in, [those] in the right income group with a certain comfort with Internet transactions, savvy enough, I would say that less than five percent are using our services.” His goal is to see that number rise to at least 50 to 60 percent in the next three years. He added that they are exploring new partnerships and seeing each partner be more active in promoting their services.
He shared that domestic transactions often are 50 percent less profitable compared to going cross-border. There is also a need to find independent consumer bases to drum awareness into. Danny said, “Awareness brings education. [There's a myth that] shipping fees might be very high. [...] By making the price a certainty, by building in the shipping, that will take away the fears of potential users.”
Danny also shared that they will be looking at heading to China, the Middle East and Europe to build their presence.