In Southeast Asia, e-commerce is one of the hottest startup spaces to be in. SoftBank Ventures Korea’s first investment in this region was in Tokopedia, an online marketplace. Japanese venture capital, GREE Ventures, has already made several Series A investments into e-commerce-related companies in Indonesia and Singapore. Rocket Internet has also raised huge amounts of funding to support its various Southeast Asian e-commerce businesses, such as Zalora and Lazada.
What about traditional brick-and-mortar businesses looking to catch the e-commerce wave and expand their reach? A young startup in Singapore, known as ShopAbout, is hoping to fill that gap. Founded by Reuben Lee and Lawrence Koh, the startup aims to help smaller merchants succeed by giving them a competitive chance against larger e-commerce players. In an interview with Reuben, he highlighted that ShopAbout is specifically targeting small to mid-level merchants who do not yet have a strong focus on the e-commerce element of business. Their goal is to create an online shopping mall where users can browse various brands across categories in order to find what they one. Merchants are able to set up an online store on ShopAbout and have access to the various tools that the platform provides such as payments, logistics and marketing. All the participating merchant has to do is to update their products in their online stores and fulfill orders.
For those familiar with the regional e-commerce space, this would sound similar to what Jipaban is doing. Jipaban is a product under Netccentric Pte Ltd, the same company that is behind blog advertising network Nuffnang. A recent visit to Jipaban’s website shows a notice that the service is currently “off on a holiday”. Reuben sees ShopAbout playing a bigger role than what Jipaban was offering by having more categories than just fashion. In fact, when ShopAbout first started, Reuben and Lawrence decided that the focus would be on electronics and furniture first for the simple reason of avoiding the challenges of sizing in fashion. To clarify, the furniture items that were carried by merchants on ShopAbout were smaller ornaments and decorative items. Early merchants on board are Cellini and Parisilk.
Having built up the initial merchant traction, ShopAbout is now turning its focus on the tougher fashion space. An early fashion merchant that Reuben and Lawrence signed on was NewUrbanMale, a Singaporean fashion label that surprisingly started off as an online store before venturing into physical stores. According to Reuben, NewUrbanMale is by far ShopAbout’s best selling merchant to the point that their online orders are hitting the point of making fulfillment a challenge.
ShopAbout is currently targeting more visitors for their fashion-related merchants with their latest “Beautiful Inside-Out” online campaign. This campaign sees ShopAbout engaging 10 lifestyle and mummy bloggers in Singapore to get the word out. Participating bloggers includes Thai born Singaporean blogger and designer, Nira Chan. Through social media, blogs, Nuffnang, Google and Facebook advertisements, ShopAbout hopes to reach out to work female professionals and mothers between the ages of 28 to 45 to create awareness about its fashion offerings. Having started and closed two earlier e-commerce startups, Reuben learnt that a focused marketing campaign is crucial. “You don’t want to be nothing to everyone,” he mentioned.
How does ShopAbout monetize? According to Reuben, there are two revenue streams. Merchants pay a monthly fee, which acts like a store rental fee. This payment covers ShopAbout’s services for the advertising, marketing and graphic work it provides to help drive traffic and set up and maintain the merchants’ online stores. The reason for this service is that ShopAbout understands that these merchants do not have the necessary skills and understanding to effectively handle their own personal store, requiring them to use services like ShopAbout. These merchants understand the importance of being online, as more than 50 percent of the current merchants on ShopAbout have static website with half of them having e-commerce functionalities. The challenge they have is in the consistent maintenance of an e-commerce website that provides a good user experience for customers. That is where ShopAbout comes in with their expertise. The second revenue stream comes from taking a cut from transaction fees. Reuben shares that this is anywhere from between 7.5 percent to 13 percent, depending on the partnership worked out with the merchant and the type of category.
So what makes ShopAbout the preferred platform over larger e-commerce players like Zalora? Reuben says that it’s the unique culture that ShopAbout has in making sure merchants on their platform succeed. He refers to them more as “partners” than as “customers” and takes special attention when a new merchant comes on board to make sure that their partnership is aligned with both parties’ long-term goals aligned. The strong relationship that his team builds with these merchants is what he believes will continue to grow their business. He mentioned that ShopAbout has signed up about five brands that were previously on Zalora but left because they felt that the incentives provides was misaligned and had a short-term view. These merchants have so far expressed positive feedback regarding their experience on ShopAbout.
Reuben firmly believes that such mutually beneficial relationship will prevent his merchants from leaving the platform. To appeal to customers, the ShopAbout team also looks to feature stories from merchants in order to create relevance for consumers. Drawing on the example of Ziegler Shoes, Reuben said that through his conversations with the owner he found out that she started the business because she found it hard for a German based in Singapore to find shoe sizes that fit. Ziegler Shoes cater to customers with bigger feet (now you know where to go for or refer someone with a need for large size footwear).
ShopAbout is currently backed by a group of angel investors in Singapore familiar with e-commerce businesses. With 45 merchants currently on board, ShopAbout is targeting 800 merchants in its effort to secure its position in Singapore. Customers can now shop for well-known brands like Bodynits and lingerie brand Triumph on ShopAbout. Reuben says that some of the merchants with regional distribution networks have already started requesting that they expand their services to cater to regional shipping. While that is in the works, ShopAbout wants to make sure they deliver strong results in Singapore first before rolling out their regional expansion. Reuben and his team will be looking to close a seed funding round in November this year to support their development.