We’re wrapping up the week with a look at e-commerce news around Southeast Asia. There are always plenty of new developments, innovation and unique market lessons to be learned. New government regulations limiting cashback and heavy sales discounts is creating a ripple effect of concern among e-commerce companies and consumers in India but brick-and-mortar retailers like Future Group are smiling. Large cashback companies delivering sales to e-commerce companies in India may suffer from new regulations according to a report in Digit.in. Malaysian e-commerce health and fitness company KFit Holdings and Thailand-based e-commerce fashion company Pomelo got $5 million VC funding for growth from InnoVen Capital India.
Takatack Technologies launched an early childhood education e-commerce platform in Singapore, called – the Preschool Marketplace. Rakuten’s flea market app Rakuma expands from Japan into its first new market in Taiwan. Mercari, an app for selling second-hand goods raised US$74 million and becomes Japan’s newest unicorn valued at $1 billion. Global payments company Adyen, headquartered in Amsterdam, handles payments processing for some of the biggest tech brands and is expanding rapidly in SE Asia.
100% FDI in e-commerce marketplaces: Days of huge online discounts may soon end
The next time you turn online for a big discount, chances are, you will come away empty-handed. The government’s new e-commerce policy that has opened the gates for 100% foreign direct investment (FDI) in B2C online marketplace, restricts e-commerce companies from directly or indirectly influencing the sale price of goods on online marketplaces.
This could mean, no more jaw-dropping discounts on smartphones or televisions — or at least, online prices will be on a par with what your neighbourhood retailer offers. “This was needed. They will now not only stop giving huge discounts but also perhaps not advertise openly about big sale days. This will call for change of business model,” said Kishore Biyani, CEO of Future Group that runs the country’s largest brick-and-mortar retail company. Via timesofindia.indiatimes.com
New FDI policy delivers major blow to Indian ecommerce websites
Ecommerce websites like Amazon, Flipkart and Snapdeal may be in a huge fix thanks to two new conditions attached to the recent approval of 100% ecommerce FDI in India. According to the new rules, no group or seller on any online marketplace can contribute more than 25% of generated sales. Secondly, discounts offered by online marketplaces have been banned completely.
In the first scenario, a restriction of 25% of sales from one particular seller has been made to ensure that no ecommerce website flouts fair trade practices by promoting a particular seller of their choice. For example, WS Retail Services Pvt. Ltd makes for the largest seller on Flipkart, clearly contributing more than 25% to the online marketplace’s sales. This will now have to change and Flipkart will have to increase the number of sellers on its platform in order to fulfill the new conditions. Same rules apply to other ecommerce players who depend on large sellers for a chunk of their sales. Via digit.in
Venture debt investor InnoVen backs Southeast Asian startups KFit, Pomelo
Venture debt firm InnoVen Capital India Pvt Ltd said on Monday it has agreed to provide a total of $5 million in loans to two startups in Southeast Asia. The firm will provide venture debt to Malaysian e-commerce health and fitness company KFit Holdings and Thailand-based e-commerce fashion company Pomelo, it said in a statement. It didn’t give a breakup of the two deals.
The two companies will use the capital to accelerate growth and for commercialization of their businesses. InnoVen is a specialty finance company that offers venture debt, a type of growth capital loan provided to venture capital-backed startups. While KFit Holdings is backed by Sequoia Capital, Pomelo has previously raised funding from Jungle Ventures. Via techcircle.vccircle.com
Takatack launches Preschool Marketplace in Singapore
Philippines-based e-commerce platform Takatack Technologies (Takatack SG) has launched an early childhood education-focussed e-commerce platform in Singapore, simply called – the Preschool Marketplace. It is currently only available in Singapore.
The venture was developed in partnership with the Association for Early Childhood Educators Singapore (AECES) and Preschool Market. The Preschool Market runs on Takatack, an e-commerce marketplace available in the Philippines, Singapore and Malaysia.
In an official press release, it says that it aims “to make the procurement process for sourcing preschool related supplies and materials more efficient and convenient for schools, teachers and vendors.” School administrators will be able to streamline their ordering processes and track their purchase histories on a single portal. Via .e27.co
Struggling Rakuten fights back with a new kind of shopping app
Rakuma, which allows people to sell unwanted stuff, is separate from Rakuten’s main marketplace site. Rakuten announced this afternoon that Rakuma’s first expansion market is Taiwan.
It’s the first part of a pivot to a different kind of online store. Rakuten says Taiwan is “a priority market” for its global strategy. The firm already has the Rakuten Ichiba ecommerce store, the Rakuten Card credit card, and the Rakuten Travel portal operating on the island. The news comes a few weeks after Rakuten said it will be shutting down its Singapore, Malaysia, and Indonesia ecommerce sites this month, resulting in 150 layoffs. Part of that plan is for the Amazon-esque site to be replaced by the eBay-like Rakuma app. Via techinasia.com
Japan, you have a unicorn. Mercari’s valuation rises over $1b
Time to update our list of Japanese unicorns. Mercari, an app for selling second-hand goods, has just raised US$74 million in its series D at a valuation of over US$1 billion. (Hat-tip to TechCrunch.)
Since starting in 2013, the company has raised US$110 million. The current round features a who’s-who of Japan’s investment community with Mitsui & Co., Development Bank of Japan, Japan Co-Invest, Globis Capital Partners, World Innovation Lab, and Global Brain all on board.
In just three short years, the app has seen meteoric success. The company’s latest press release notes that it fulfills US$88 million worth of orders every month and Shintaro Yamada, co-founder and CEO, revealed last December the company is profitable by a few million dollars. Via techinasia.com
Global e-commerce push places low-key unicorn on world stage
It’s a $2 billion tech unicorn that very few people have heard of and as far as the man spearheading the company’s operations in the Asia-Pacific region, Warren Hayashi, is concerned, he’d like things to stay that way. “We are doing something that nobody else is doing and the fact that nobody knows our name means that we are doing our job,” Mr Hayashi told The Australian.
Adyen is a global payments company headquartered in Amsterdam, The Netherlands. Some of the world’s biggest tech brands bank on its technology when it comes to payments processing. With Facebook, Spotify, Netflix, Airbnb and Uber on its client list, the global aspirations of these companies have translated to a steady windfall for Adyen. The company posted more than $350 million in revenue and processed more than $50 billion in 2015.
Mr Hayashi told The Australian that Adyen’s appeal lies in providing a single platform that’s geared to optimise the eCommerce experience for any retailer. The online versus bricks and mortar debate may have given way to the so-called “omnichannel” proposition, but that doesn’t mean things are easy for retailers. Via theaustralian.com.au
That’s a wrap for Cashback Industry News this week. Enjoy your weekend.