If you are a keyboard enthusiast and looking to level up your PC setup with customised keyboards or are planning to get a whole new setup, don’t sleep on The KapCo. 

Thomas Chan of The KapCo started his journey from corporate realms.

As a graduate with a degree in construction and a master’s degree in International Real Estate, he established his foothold in esteemed organisations like CBRE, Shimizu Corporation, and JLL Property Services.

Amidst his career and personal milestones like marriage and fatherhood, he sensed the need for a change and set his sights on the burgeoning ecommerce landscape.

In 2019, Thomas dove headfirst into the ecommerce wave, initially exploring the world of dropshipping. 

However, the tumultuous waters of online retailing demanded adaptability. Faced with the challenge of keeping his business afloat, Thomas and his team seized the opportunity to pivot towards branding—a decision that would redefine their trajectory.

Birth of The KapCo

The genesis of The KapCo was not scripted in a boardroom but emerged from a collective vision to create something exceptional.

“In July 2021, our ex-company allowed each sales team to come up with a brand to launch. We then had a brainstorming session that ultimately led to mechanical keyboards,” Thomas shared.

Inspired by his team’s ingenuity and fueled by a newfound passion for mechanical keyboards, he embarked on a quest to carve a niche in the competitive market.

Armed with a team of young and talented individuals boasting expertise in design, illustration, 3D modeling, photography, and marketing, The KapCo set out with a goal to revolutionise the mechanical keyboard experience. 

Their journey began with reselling plain-coloured keycaps, gradually evolving into designing bespoke keycaps that found enthusiasts worldwide. 

They have a variety of keycap sets such as spring tea keycaps, teddy bear keycaps and skull and roses keycaps. The price ranges from RM236.99 to RM377.99.

Additionally, they have designed keycap sets in partnership with a number of brands, including Ainbell, Creative Universe, Gateron, and Mocankeys.

They also have their own collections, which are The KapCo Artist, The KapCo Colorway, and The KapCo Original starting from RM141.99.

For its Artist Collection, The KapCo worked with international artists such as Ilustrata, Elora, Onitatu99, and others.

Through initiatives like The KapCo Artist Collection, they aim to infuse their products with creativity, authenticity, and a touch of exclusivity.

Defining his vision

Central to The KapCo’s ethos is a commitment to guiding keyboard enthusiasts through various levels of engagement, from novices to seasoned experts. 

By meticulously segmenting their target audience and crafting tailored experiences, The KapCo aspires to cultivate a vibrant community of keyboard enthusiasts.

Thomas and his team divide keyboard users into several levels:

• Level 0 – Non-mechanical keyboard users
• Level 1 – Those who have only heard about big brands such as Razer and Steelseries
• Level 2 – People who have delved deeper into the rabbit hole and started looking for customisation for their mechanical keyboards
• Level 3 – Enthusiast-level individuals who seek out unique and rare collectible keyboards

“For The KapCo, we envision ourselves helping people transition from Level 0 to Level 1, and from Level 1 to Level 2. As for Level 3, that’s our aim—to let our fans be the next ‘Kap’ enthusiast!” he told Vulcan Post.

Navigating challenges and embracing growth

Like any entrepreneurial endeavour, The KapCo’s journey has been punctuated by challenges and triumphs. 

From mastering the intricacies of product quality to navigating the dynamics of the global supply chain, Thomas and his team have persevered through sheer dedication and integrity.

As they gear up for the launch of their KapCo-branded keyboard later this year, they also anticipate collaborations with renowned brands like Peanuts, Nik Bental, and Ripndip.

With an eye on expanding their presence in offline retail spaces and securing bulk orders from international markets, Thomas envisions a trajectory of exponential growth for the brand.

In particular, they’re looking to expand their global footprint in China, Canada, and the US, believing that this will bring in more international collaborations and partnerships.

They are also aiming to collaborate with iconic IPs like Star Wars and Marvel to reach new heights of innovation and influence. 

In the ever-evolving landscape of ecommerce, Thomas Chan wants The KapCo to stand as a beacon of creativity in turning dreams into reality for its dedicated community of keyboard enthusiasts.

• You can also learn more about The KapCo here.

Featured Image Credit: Thomas Chan, founder of The KapCo

Elfaine Tan and Kingsley Peh, founders of I’M IN, are no strangers to entrepreneurship.

When they were 20 years old, they started Singapore’s first online “tryvertising” platform – SampleStore.com. The platform, which allows customers to ‘try’ the offering before buying it, was subsequently acquired by Singapore Post (SingPost).

With this success, HerWorld Magazine named Elfaine one of the “Most Inspiring Women under 40”.

Starting an online lingerie brand

Despite their achievements, Elfaine and Kingsley’s entrepreneurship journeys did not stop there. One and a half years after leaving their directorship positions at SingPost, they founded I’M IN, a lingerie brand.

One question might float in your mind at this point: “Why lingerie?”

Elfaine shared that she was inspired to start I’M IN from her personal experience with wired bras and how the wires that poked out left her a scar in between her breasts.

I just thought “Nevermind, it’s okay, just putting [the wire] in will do,” but after that it actually caused scarring on my boobs. So now, in between my boobs, there is a very obvious black-greyish scar that is caused by the wire.

Elfaine Tan, co-founder of I’M IN

She added that there was also a market gap for wireless lingerie for Asian sizes and wanted to offer functional and affordable options made with quality. With that shared drive, both founders invested S$100,000 to launch I’M IN in 2015.

“I believe that all women deserve to have the comfiest intimates and not go through the same issue that I went through,” said Elfaine.

Unlike many lingerie brands that went through the brick-and-mortar route, I’M IN first launched as an e-commerce brand. Elfaine explained that going online was a “no-brainer” as it was the fastest way to test the market’s viability.

“Being online allowed us to reach a broader audience, establish a strong market presence, and connect with customers directly,” she added. Elfaine also pointed out that as the founders only invested S$100,000, she needed more capital to open a physical store then.

Creating their own fabrics and going through an aesthetic change

With every startup, there is bound to be a learning curve —a lesson that Elfaine understood from her past business ventures. Little did she know that starting a lingerie brand would come with new challenges and that her biggest hurdle would be establishing trust with her manufacturers.

The tricky, tricky part is actually working with manufacturers where I got cheated before, I’ve been in situations whereby the product isn’t what I ordered. So I felt that that learning curve was really, really challenging.

Elfaine Tan, co-founder of I’M IN

To facilitate better quality control and pursue faster production timelines, Elfaine partnered with exclusive factories where the team develops and produces its own fabrics and samples. Creating its own fabrics allows the brand to differentiate itself within the saturated lingerie market and provides its customers with “custom-made solution fabrics” that cater to their unique needs.

But unlike what many may expect, the brand’s first product was not a wireless bra but a pair of lounge shorts.

It starts at the drawing board, where the I’M IN team designs their cartoons and makes repeated patterns before they are sent to their factory for sampling. Elfaine shared that the sampling stage is marked by much trial and error before the approved samples are sent to their partner factories for mass production.

Elfaine remained on the lookout for new opportunities to diversify I’M IN’s product ranges, and she soon started receiving customer requests to launch a new line of wireless lingerie.

In 2017, two years after I’M IN was founded, the brand launched its first wireless bra.

In addition, the brand underwent an aesthetic change, as its lingerie has adopted simpler colour palettes and designs. Elfaine stated that the change was “part of growing up” for both the brand and its customers and that her tastes have changed since she started I’M IN in her mid-20s.

“It’s no longer just about looking cute, looking nice,” emphasised Elfaine.

Their first launch had a slow pickup rate

However, the launch of the wireless bra product line was not all flowers and rainbows for Elfaine as they received “challenging yet positive” reception from their customers.

She explained that the “challenging” aspect came from the fact that as I’M IN is an e-commerce brand, some customers find it tough to find the perfect fit and end up not purchasing.

“Bras are not like T-shirts. A little bit bigger, a little bit smaller, they just can’t fit,” added Elfaine.

With further product fine-tuning and the provision of a wider product range, the brand won the hearts of customers who were satisfied with the lingerie’s functionality and comfort.

Beyond product challenges, Elfaine also shed some light on its financial challenges.

With every new collection, there is also a risk of accumulating backstock, which can hurt the brand financially. Elfaine acknowledges the risks associated with their many product launches but points out that her team observes their customers’ buying behaviours to decide how much to produce.

She also pointed out that both founders have been conservative with their finances since the brand’s inception, to the extent that their office had to be downsized when they experienced financial constraints.

“In this line of business, you need to put a lot of money aside for the procurement, and sometimes the sales don’t come in as fast. So the [financial] planning will come in — how can we break down to smaller capsules so that we can stretch out our launches?,” added Elfaine.

She also added that as most of their operations are done in-house, it also helped to reduce business costs.

Now, they have 4 brick-and-mortar stores in Singapore

While I’M IN has continued to gain traction among customers as a digital native brand, many customers have voiced their desire for a physical store for them to try, touch, and feel I’M IN’s products before deciding to make a purchase.

The opportunity to open a physical store came when Singapore department store chain Isetan invited them to hold a pop-up event at Scotts Road.

I’M IN’s lingerie was well-received by new and loyal customers during the event, spurring the launch of their first store at Orchard Gateway.

The brand has since opened three more stores islandwide, though the transition to brick-and-mortar has brought a new set of challenges for Elfaine and her team.

She explained that more financial capital was needed for new expenses, such as lease costs and additional staffing requirements. She also pointed out the need to maintain higher inventory levels has increased as the brand grows.

“Sometimes things get missing, or the stock we take doesn’t tally with the amount we input into our system, and as the warehouse gets bigger, we can’t find certain things. And not only that, even in terms of procurement, sometimes we underproject and sell out too quickly, we do not have enough stocks for exchange, causing customers to be very angry and they don’t get their size,” lamented Elfaine.

However, these new challenges did not discourage the brand, as earlier in January, I’M IN expanded beyond Singapore to the Philippines.

While Elfaine expressed her ambition to expand further, the I’M IN team will focus on building brand awareness in their current markets.

The ultimate goal for I’M IN is to become a leading Asian-fit lingerie brand in Southeast Asia. In five years, we envision expanded market reach, increased product offerings, and a strong reputation for providing quality, affordable, and functional Asian-fit lingerie.

Elfaine Tan, co-founder of I’M IN

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Featured Image Credit: I’M IN

Searching for the perfect beauty product is an ongoing problem all too familiar to most women. The same goes for Arissa Cheo, Yoyo Cao and Lin Ting, co-founders of ROMI Beauty.

ROMI Beauty marks the trio’s first foray into the beauty industry, which started from their skincare concerns. “I have very sensitive skin prone to rashes, and I constantly struggled to find products that wouldn’t irritate my skin,” explained Arissa.

For Yoyo, her skin is exposed to extreme weather changes from travelling around the world, and she shared that she needed makeup products not only for enhancement but also to provide ample hydration. Meanwhile, as a mother of two, Ting sought fuss-free products that would seamlessly fit into her busy schedule.

“All of us came together and noticed that, like us, many women were searching for makeup products that are multifunctional and had skincare benefits,” shared Arissa, adding that the founders conducted a survey to gauge consumer demand.

Harbouring a desire to offer versatile beauty products, all three founders decided to kickstart the formulation process, which took two years of trial-and-error and meticulous evaluations. Ting added that ROMI Beauty is “100 per cent self-funded by the three of us.”

In 2022, ROMI Beauty was launched, and their hero product — the ‘Dream Skin Tint’, a tinted moisturiser containing SPF and ingredients found in skincare, was released.

When asked to describe their brand to someone who has heard of it for the first time, Yoyo expresses its philosophy in three words: honest, versatile, and uncomplicated.

At ROMI, we are all about self-love. We are here to celebrate you and your skin. Our mission is clear- to create multitaskers that seamlessly fit into the lives of everyday individuals. Our formulations are created through conscious choices and carefully selected high-quality ingredients.

Yoyo Cao, co-founder of ROMI Beauty

Letting the products speak out for themselves

While Ting is not active on social media, Arissa and Yoyo are most well-known for their online presence and branding. It would be logical for both Arissa and Yoyo to leverage their online presence to bring more eyeballs to ROMI Beauty.

However, they have decided to focus on improving the formula of the products instead of using their status to promote the brand.

“There was no pressure [to perform], as we actively made the decision not to front the brand too much. We want to focus on the quality and effectiveness of our products and let them speak for themselves,” said Yoyo.

The founders were not the first to follow this strategy, as many Western celebrities have done the same for their brands. Notably, The Row is a high-end clothing brand owned by the Olsen Twins, Mary-Kate and Ashley Olsen, which was established in 2006 and is now on par with luxury fashion heavyweights including Chanel and Louis Vuitton.

The fashion industry is often described as “cut-throat”, with both big and small name brands trying to differentiate themselves in the market; the same can be found in beauty.

While many mainstay makeup and skincare brands mass produce their products, ROMI Beauty adopts a “quality over quantity” philosophy and introduces a limited number of carefully thought-out products each year.

Yoyo also pointed out that while trends drive many beauty products, ROMI Beauty focuses on producing evergreen products that can be used as must-have beauty staples.

Pushing for more innovation did not come without challenges

However, research and development (R&D) has continued to be a challenge for ROMI Beauty.

Arissa explained that the founders and the team conducted countless brainstorming sessions to develop new product ideas based on customer feedback and market research.

She added that each founder has an active part in the sampling process, and all three must approve all products.

Usually, one of us will come up with an idea for a product, and the rest will come together to refine the concept further. We then go on to work on formulating the product’s base and active ingredients, ensuring that the ingredients are clean and always free of parabens, phthalates, SLS & SLES and synthetic fragrances.

Before final production, we undergo meticulous planning and consideration in every aspect, from formulation to packaging.

Arissa Cheo, co-founder of ROMI Beauty

Ting also shared that the business could not cope with the volume of orders during their first launch and experienced some logistical hiccups.

“However, we have learnt that as long as we communicate timely, take accountability and remain humble and transparent with our customers, they have proven to be very understanding, especially to growing businesses,” expressed Ting.

Founders hope to build a physical space for their products

Currently, the brand has garnered popularity among consumers in and out of Singapore, with 40 per cent comprising repeat customers.

Their loyal following allowed the brand to expand into a new product category — skincare. Their first skincare product, the ‘Glow Getter Treatment Mask’, was very well-received amongst their customers, and the product sold out within 24 hours.

Despite their accomplishments, the founders envision more growth for the brand. Currently, they are an e-commerce-only brand, and the founders have expressed their ambitions to venture into brick-and-mortar operations.

One of our main goals is to enter into a physical space and to be distributed in stores. We have been actively listening to our dedicated customer base and know that they express a desire for a brick-and-mortar experience to personally try our products.

And yes, we have several new products in the pipeline for this year, but no spoilers just yet. Watch this space for what’s coming next!

Lin Ting, co-founder of ROMI Beauty

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Featured Image Credit: ROMI Beauty

Carousell has been fined S$58,000 over two separate data breaches in 2022, one of which exposed the personal data of approximately 2.6 million Carousell users. The breaches were detailed in a judgment by the Personal Data Protection Commission (PDPC) yesterday (February 22).

The first data breach occurred in July 2022 when Carousell implemented changes to its chat function. The chat function is a feature that allows potential buyers to send and receive messages to and from listing owners on the Platform.

The changes were intended to be limited to users in Philippines who were responding to property listings, which would allow the personal details of a user (who has given prior consent) to be automatically sent the owner of the property listing, including their first names, email addresses and phone numbers.

However, due to human error, the email addresses and names of guest users (those who did not have registered accounts on the Platform) were automatically appended to all messages sent to the listing owners of all categories in all markets. For guest users in the Philippines, their telephone numbers were also leaked in the messages.

Carousell did not identify the bug at the time. However, one month after the leak, it implemented a fix to resolve an unrelated issue with the pre-fill functionality of the chat function, which unfortunately expanded the effect of the original bug.

Instead of just guest users, the data of registered users were also automatically appended to messages.

Carousell was eventually made aware of the bug via a user report sent on August 18, 2022 and subsequently implemented a fix on August 24 which resolved both the bugs. As a whole, the personal data of 44,477 individuals, comprising email addresses of all affected users and mobile phone numbers of users in Philippines, were compromised.

Following the incident, Carousell deleted all affected personal data disclosed in the chat function by September 3, 2022 and notified users who had written to Carousell about the data breach by September 6, 2022.

A threat actor put up 2.6 million users’ data for sale on an online forum

Carousell was alerted by the PDPC to the second data leak on October 2022 when they identified an individual offering about 2.6 million users’ personal data for sale.

The breach arose when Carousell launched a public-facing application programming interface (API) during a system migration process on January 15, 2022. An API allows computer programs or components to communicate with each other.

However, Carousell inadvertently failed to apply a filter on that API, resulting in a vulnerability which was eventually exploited by a threat actor.

The API’s intended function was to retrieve the personal data of users followed by or following a particular Carousell user. A filter applied to the API would have ensured that only publicly available personal data of these users — their user name, name and profile image – would be called up.

Without the filter, the API was able to call up the users’ personal data, comprising their email addresses, telephone numbers and dates of birth.

A threat actor was able to exploit this loophole by scraping the accounts of 46 users with large numbers of users following them, or who were following many other users. Forensic investigations revealed that this occurred in May and June 2022.

Carousell’s internal engineering team discovered the API Bug on September 15, 2022 and deployed a patch on the same day. After conducting internal investigations to determine whether there had been unauthorised access to its users’ personal data in the 60-day period prior to September 15, it did not detect any anomalies.

The e-commerce platform remained unaware of the exploitation until it was informed by the PDPC on October 13, 2022, after which it identified and blocked the threat actor’s account and notified all affected users by email.

Failure to conduct pre-launch testing, lack of proper documentation

For the first data breach, Carousell failed to conduct reasonable pre-launch testing upon implementing its changes to the Platform’s chat function, said the PDPC. Reasonable code reviews and testing would have detected the bugs before the changes went live.

Carousell admitted that since the changes were only intended to impact users in a specific category of listings (i.e. property listings in the Philippines market), testing was not undertaken to check how the changes may have affected other users and listings outside the intended category.

For the second data breach, Carousell had selectively performed code reviews and tests during its system migration, only for certain purposes and on certain APIs.

The company failed to test the API for data security risks and admitted that it did not mandate comprehensive code reviews for security issues prior to the second breach.

In both instances, the lack of proper documentation also contributed to the breaches. Without proper documentation, developers often have no references to fall back on, and may end up making assumptions about code logic that could produce incorrect results.

When Carousell’s engineer implemented the changes to the platform’s chat function, he did not have the contextual knowledge to realise that such changes would affect other users and categories as he was not the original author of the function. This contributed to the first data breach.

Meanwhile, for the second breach, the APIs involved in the system migration were built in 2016 and did not have proper documentation. Carousell admitted that its employees may not have been aware that they needed to apply a filter to the relevant API post-migration.

Carousell “respects the PDPC’s published decision”

Following the data breaches, Carousell has implemented various measures to prevent the recurrence of similar incidents. This includes the introduction of an automated unit test which ensures that the Platform does not erroneously append any personal data in chat messages, and the configuration of its GitHub repository to scan for and generate alerts for data leakages.

In response to the PDPC’s judgement, a Carousell spokesperson shared that the company “respects their published decision regarding the September and October 2022 incidents, which also notes Carousell’s prompt and effective remediation actions to enhance data security and prevent similar incidents from occurring in future”.

Carousell has been working on addressing the additional recommended remediation steps set out by PDPC in their final decision. Both incidents were isolated one-off incidents that happened due to unrelated bugs that were introduced that have since been fixed.

Protecting our users’ personal information has been and will always be of paramount importance to us. To ensure that we maintain a robust and effective security posture, we continually invest significant resources in enhancing our security infrastructure and cyber security efforts.

– Carousell

Featured Image Credit: Carousell

Also Read: Alleged Razer data breach: Hacker demands US$100K in crypto in exchange for stolen data

Disclaimer: Opinions expressed below belong solely to the author.

In a painful fall from grace, the once viral low-cost e-commerce marketplace Wish is to be acquired by Singapore’s Qoo10 for just US$173 million in cash.

Almost exactly 3 years ago, in February 2021, the company’s value peaked at over US$18 billion, following its IPO in December 2020. It was mostly downhill from there.

Following fierce competition from other platforms sourcing impossibly cheap goods from China – like Aliexpress, Shein or recently Temu, among others – and a scandal which revealed that Wish itself ran a fake store, scamming its own users to collect data, the company lost 99% of value in little over 2 years.

“There were unbelievable bargains on “bestdeeal9,” a store hosted on the e-commerce platform Wish, including a $2,700 smart TV being sold for $1 and a gaming computer advertised for $1.30.

But none of the offers were real, and Wish knew it.

The company, an online novelty emporium that had more than $2 billion in sales last year by dangling hard-to-believe discounts, created “bestdeeal9” as an experiment. Listings that had been removed for violating Wish policies were reposted on “bestdeeal9” and used in part to track whether shoppers complained when their orders never arrived.“

The New York Times, July 2022

Q(u)oo Vadis?

So, where is this going? For Wish and its investors, it’s just a way to get back as much money as possible, chiefly from the accumulated net operating losses, worth a total of US$2.7 billion, which can be channelled into a new business (reducing its future tax liabilities).

ContextLogic (CL), Wish’s publicly traded parent, will remain in operation. Only Wish’s assets and liabilities will be sold to Qoo10. CL will effectively become a clean slate with US$2.7 billion in future tax deductions.

Meanwhile, for Qoo10 it’s a deal that considerably increases its international reach, assuming it can monetise it.

The Singapore-based marketplace is present in multiple countries in Southeast Asia, as well as Japan, South Korea, Hong Kong and China.

The bulk of its business, however, is carried through 3 marketplaces: Japan, Korea and Singapore.

According to Similarweb, the Japanese site receives between 12 and 14 million visits per month, followed by 2 million in Korea and 1.5 million in Singapore.

The acquisition of Wish should at least double these figures, opening opportunities for Qoo10 to reach substantially more diverse customer groups worldwide.

Besides that, the Wish brand surely carries some residual value, even if it’s been tainted by the company’s questionable history. A relaunch could once again attract visitors, and there are hundreds of millions around the world who have had some dealings with it in the past.

Under new management, with a new product offering and improved customer service, it may fly yet again. If that goes to plan, then Qoo10 could make a leap from its currently highly localised and relatively small operations onto the global stage.

We can only wish them all the best.

Disclaimer: Opinions expressed below belong solely to the author

The internet has changed the world. Within 30 years, it connected billions of people worldwide, effectively shrinking the planet. Meanwhile, progressing globalisation has brought products from all over the world directly to our doorstep.

But at one point, something went wrong.

While technology keeps improving, the benefits of its rapid development have become less evenly distributed.

We can stream high-quality video to and from any corner of the world, holding live conversations with people thousands of miles away. We can use robots and drones, previously accessible only to major companies. It is possible to control complex machines or perform surgeries on the other side of the globe. Today, we’re witnessing the birth of artificial intelligence, which is already transforming many industries.

And yet the world of e-commerce is not going forward but back — and none of the leading companies involved in it appear to be concerned.

Hot garbage

The latest darling of millions around the world is Temu, after its stratospheric rise over the past two years.

You would be hard-pressed to explain what is so special about it, though, since it uses the same recipe that Wish or Aliexpress and, regionally, apps like Shopee or Lazada followed before it.

It’s just another massive marketplace with access to a stratospheric number of products churned out in Chinese factories, sold at scarcely believable prices, even if it takes many days or weeks for them to arrive at your doorstep.

It lures people in with free delivery, endless promotions, interactive games that could win tangible goods, and so on- the same old blueprint.

Most of what it sells turns out to be garbage, but the risk-to-reward ratio appears attractive enough to make it an addictive experience for millions. So, it’s hot right now.

However, if experience is anything to go by, this sort of success doesn’t last.

Wish, the trailblazer of the industry, went public in 2020, at the height of the pandemic, following a decade of growth, collapsed catastrophically, losing 99.5 per cent of its value in just three years, wiping clean over $1.6 billion it raised from investors beforehand.

The company’s market capitalisation is currently around $100 million, down from the 2021 peak of over $18 billion. Nobody believes it can be resuscitated.

While Wish may be considered to have been on the extreme end of the “garbage” commerce spectrum, permitting the existence of very shady deals, all of the things that led to its demise are present on every other major e-commerce platform today and are still used as a magnet for unsuspecting shoppers.

Companies- or at least the people they employ- like it because it helps boost their numbers, even if it typically results in a short-term gain leading to long-term pain.

The question is: how long can the race to the bottom in terms of price and quality last before customers are both bored and fed up?

After all, the great Warren Buffett observed that “honesty is a very expensive gift; don’t expect it from cheap people.”

Growing up or playing pretend?

Some of the more ambitious platforms, like Shopee or Lazada in Southeast Asia, have seemingly grown more mature over the years. They combat scams, try to control quality, and have managed to onboard many reputable brands, filling the role that Amazon- the great e-commerce role model- plays in the US.

But how much of it is growing up, and how much is just pretending they are?

It’s hard to escape the impression that their more mature product offering is no different than what we could already buy in online stores before mobile shopping was even a thing.

No inherent value is added to any major e-commerce platform if we can purchase the same products directly from manufacturers or distributors.

While they may provide valuable logistical services at a large scale, the reality is that many, if not most, sellers are still shipping their goods on their own or with limited help from the platforms.

Meanwhile, any savings that could be had from a more efficient logistical system are relatively tiny on a per-order basis.

When you consider all of the above, it’s no longer a surprise that almost nobody, not even Amazon, is making any money in this business.

Throughout 2021 and 2022, it posted losses on all e-commerce operations despite over $500 billion in annual revenue, and its only profitable unit was AWS.

It has returned to profitability in North America, reporting operating margins of around 4-5 per cent, though they remain dwarfed by AWS’s 30 per cent.

Wishification of e-commerce

But even Amazon doesn’t seem to care about its reputation very much and has embraced the flood of questionable sellers, chiefly from China, on its platform.

Have you ever wondered why so many of them have really bizarre names? They do this cheaply and quickly to obtain a trademark that nobody can contest and then pour thousands of their listings onto unsuspecting Amazon buyers.

Just two weeks ago, the giant faced another embarrassment after the clumsy use of AI-generated titles was spotted, with lazy sellers mindlessly dumping ChatGPT’s warning messages as titles of their products.

This adds to other problems, which Amazon has failed to address in a timely manner, such as pervasive spam and review hijacking — a practice of using positive reviews for unrelated products to boost the appeal of an inferior one (or a complete scam).

It’s been going on for years, with the platform choosing to reimburse the customers for failed orders rather than devise effective filters to improve user experience. It’s gotten so bad that the American FTC decided to step in last year, though its actions are unlikely to yield any improvement unless they target Amazon itself.

Too big to fail?

Perhaps Amazon’s reluctance to take action is due to a belief that there’s not much more it has to fight for in e-commerce. It has practically monopolised it in the most lucrative market in the world, and its ventures abroad have proven rather fruitless. So, why bother?

Instead of trying to sell even more stuff, it is building up its digital entertainment business, competing with the likes of Netflix or Disney for a slice of the lucrative streaming pie.

With Prime Video, bolstered by the acquisition of the Metro Goldwyn-Mayer in 2022 and the popular streaming platform Twitch, and enormous resources at its disposal, it has more to gain from selling digital content worldwide than peddling diapers, books or car parts.

Amazon is now a technology company, not an online store.

It’s almost as if it keeps e-commerce running as a favour. It’s a major headache, and it doesn’t bring in much money, but at least it provides access to people so you can sell them something else.

This, by the way, is what other companies in the space are trying to do to ensure they have a future.

Just look at Sea Ltd. in Singapore. It is using the popularity of its e-commerce app, Shopee, to venture into digital banking services, upselling its customers on something that can generate real returns in the long run.

Given the similarly anaemic results of other e-commerce platforms, this appears to be the only way to survive.

But it also begs another question: if companies are willing to sacrifice the user experience of online retail, won’t people eventually turn away from them?

The problem isn’t only that you may get cheated, but that finding what you want is increasingly difficult as you have to sift through thousands of meaningless or repetitive listings.

It seems quite likely that customers’ patience is limited. They are now learning not to trust any big e-commerce store, nearly all of which are drowning in substandard goods from dodgy sellers half the world away.

Fifteen years ago, it seemed that Groupon would be the next tech giant, propelled by a seemingly faultless business model: offering unbeatable deals on products and services of the participating merchants.

What’s not to like? How can it fail?

Well, it turned out that merchants didn’t quite like to pay the Groupon’s cut, while people got bored after a few years.

Coupon sites still exist today, but none have quite the same appeal anymore.

This may be the future of online retail.

Waiting for Apple of e-commerce

Apple’s customers are often ridiculed for overpaying for the company’s products. In reality, they are buying the peace of mind that comes with the Apple logo.

Android may be the world’s most popular mobile operating system, as phones running it outsell Apple 4 to 1, but most of the money goes to Cupertino.

Apple is responsible for 50 per cent of global smartphone revenues and over 80 per cent of the profits despite shipping just 20 per cent of the phones. Everybody else is scraping the bottom of the barrel.

We have yet to see a similar company emerge in e-commerce, but the conditions are becoming more favourable each year.

How many questionable offers does one have to see to learn that you can’t buy quality for a few bucks?

And as trust in big platforms erodes, as it did for Wish, customers may turn to buying directly from smaller vendors or manufacturers, looking for more trustworthy products instead, or to a curated platform, offering only selected goods rather than heaps of unverified garbage.

Given enough time, they may all fold into one. All of the Temus, Shopees, Lazadas, Taobaos, Alis, and even Amazons may disappear in the coming years, absorbed into a single entity or just a handful of entities.

Some demand for cheap rubbish will likely remain, but do we need dozens of sites peddling the same stuff? Garbage should do fine with just one dealer.

Suppose the creation of a single, central, curated, quality platform proves too tricky. In that case, we may see market fragmentation instead, buying directly from smaller vendors with an established reputation or directly from manufacturers rather than faceless corporations who can’t even be bothered to deal with spam they serve all of us today.

It may soon turn out that they were never too big to fail but have grown too big to exist any longer.

You might have seen reports circulating last year that merchants would be charged transaction fees for using DuitNow QR.

It was stated that merchants would have to pay 0.25% of each DuitNow QR transaction value, otherwise known as the merchant discount rate (MDR).

An official statement later clarified that measures would be taken by the central bank to minimise the potential impact small businesses might face from these transaction fees. 

Then, speculations arose. Will customers foot the MDR? Might merchants hike their prices to cope with added transaction fees?

To clear the air, we first have to understand what MDR is.

Understanding the Merchant Discount Rate

Investopedia defines the MDR as a fee that merchants and other businesses must pay to a payment processing company on cashless transactions. 

The MDR is typically charged to businesses using card readers, otherwise known as point-of-sale (POS) terminals to accept debit or credit card payments.

In the context of DuitNow QR, it was said that the MDR is intended to cover costs and investments needed by the financial industry to upkeep its payment systems. This includes cybersecurity and fraud prevention controls to maintain high service and security standards for payment services.

News reports circulating in late 2023 claimed that traders receiving money via the DuitNow QR would incur a 0.25% fee when transferred from a bank account, and a 0.5% fee for transfers made via credit cards to POS terminals.

Malaysia’s national payments network, Payments Network Malaysia (PayNet) pointed out that such transaction fees on DuitNow QR have always been present since the platform was introduced in 2019. These fees were simply waived temporarily amidst the pandemic.

Following the news reports though, this led to merchants questioning: If my business is going to be charged transaction fees for offering cashless payments, why not go back to cash?

There are various advantages to using cashless payments

By only accepting cash-based payments, merchants would have to hire and compensate additional employees who are trained to accurately and efficiently manage transactions.

This hassle can be mitigated when card-based payments are offered. However, there are additional fees to foot when utilising this system too, including equipment leasing fees for the POS terminal, transaction fees, statement fees, etc. 

Hence, the lowest barrier to entry for micro and small businesses to offer cashless systems is through DuitNow QR, as it offers several advantages:

1. Transaction fees will continue to be waived for micro and small businesses

Most DuitNow QR merchant acquirers have announced that they will continue to waive the MDR for micro and small businesses accepting DuitNow QR payments.

In general, microenterprises are defined as having a sales turnover of less than RM300,000, or less than five full-time employees. Meanwhile, small businesses are companies with sales turnover between RM300,000 to RM3 million, or between five to 30 full-time employees.

These measures will enable micro and small businesses to keep utilising DuitNow QR payment services at zero cost, while ensuring that QR payment services remain efficient, reliable, and safe for all consumers.

2. Quick and simple to set up

It’s also simple to offer a cashless payment system like DuitNow QR.

Merchants will just have to set up a business banking or ewallet account to generate a dedicated QR code, and display it for buyers to scan and pay via any banking app or ewallet of their choice.

Since 2023, DuitNow QR has made it possible to receive cross-border payments as well.

This allows international travellers in Malaysia to use their mobile payment apps to scan DuitNow QRs to make payments to merchants. Currently, this feature is available to users from Singapore, Thailand, and Indonesia.

3. Instantly receive payments

DuitNow QR also runs on a real-time transfer basis, meaning upon a customer’s transaction, merchants will receive these payments instantly in their business banking account. There’s no need to deposit large stacks of cash to the bank, reducing the operations cost for businesses. 

These online banking methods will also notify both merchants and customers when payments are received at the point of sale.

-//-

At the time of writing, major banks and ewallet providers nationwide will continue to waive MDR for micro and small businesses accepting DuitNow QR payments. 

Therefore, customers will only need to pay for what is stated on the price tag, while businesses will likely not raise their prices for the sole purpose of covering such transaction fees.

At the end of the day, DuitNow QR functions as an efficient, convenient and secure payment method that can further boost digital payment adoption in Malaysia.

• Learn more about DuitNow here.
• Read other financial-related articles here.

Featured Image Credit: Vulcan Post

[This is a sponsored article with Sidec.]

On December 10, 2023, five Malaysian brands returned from a week-long overseas business trip in Hangzhou, China.

Facilitated by Selangor Information Technology and Digital Economy Corporation (Sidec), the expedition was part of the Selangor E-Commerce Xccelerator Programme 2023 (ECX23).

Briefly, the ECX23 programme aims to provide ecommerce entrepreneurs, business owners, and founders with the necessary aid to succeed in the competitive digital market.

The five Malaysian companies were selected based on their respective innovative business models, growth potential, and effective utilisation of the insights gained from the ECX23 programme.

The winners are:

Company	What they do
Nori Malaysia	Provides funding, ideas, and concepts to help celebrities build and grow their businesses and brands.
Pastels Group	Known for its brand, The Pastels Shop, it’s a local business that distributes K-beauty products and expanded to create its own line of skincare goods.
Shapee	Specialising in motherhood needs during pregnancy and the postpartum period, the company sells maternity and nursing products.
Sono Holding	A healthtech company providing detailed 5D and 4D ultrasound scans for the examination of expectant mothers.
Big Bath	Operational for over a decade, the company provides solutions for kitchen and bathroom amenities.

A glimpse into China’s ecommerce hub

Hangzhou was chosen for this expedition as it’s known to be a major ecommerce hub.

Deemed the “Silicon Valley of China”, Hangzhou is where Alibaba was born, and is ranked 10th on Fortune’s list of cities with the most Global 500 headquarters.

Did you know: Global 500 is Fortune Magazine’s annual ranking of the world’s 500 largest companies, measured by how much revenue they made in a single year.

Between December 9-13, 2023, the ECX23 winners delved into China’s AI Town and visited tech facilities focused on ecommerce, big data, cloud computing, IoT, and chip design.

Sidec also facilitated networking sessions between ECX23 entrepreneurs and Hangzhou business leaders. The goal was to help participants gain exposure to how modern technology can be utilised in their businesses to scale globally.

To understand the impact of the business trip on participants, we interviewed the participants to get their key takeaways.

1. The right partners can help you strategically expand to global markets

Shapee’s CEO, Eugene Eau shared that the Hangzhou expedition broadened his mindset about the possibilities of scaling his brand.

Previously, he believed that it was only viable to scale his SME within the Southeast Asian market.

Witnessing Alibaba’s growth in Hangzhou has shifted his mindset. Now, Eugene is convinced that penetrating the global market is possible with strategic ecommerce connections.

This is beneficial, as expanding globally can allow his business to access untapped markets and connect with a broader audience. By doing so, the brand can open up opportunities for increased revenue and long-term sustainability.

2. Prioritise customers by streamlining their end-to-end user experience

Sono Holding’s founder and director, Jezzlyn Siu Cia Yee, found inspiration in Alibaba’s emphasis on customer needs.

“Alibaba’s distinctive approach places employees second and shareholders third, reflecting a profound commitment to understanding market demands and meeting customer expectations,” she elaborated. 

This customer-centric approach has been the key to Alibaba’s growth around the globe. For instance, AliExpress allows businesses and consumers outside China to access affordable products from Chinese sellers. 

The company’s digital payment services like Alipay can also facilitate transactions on Alibaba’s platforms. This extends its customer reach to both offline and online transactions around the globe, serving various customer demographics.

In doing so, Alibaba has become a leading service provider by providing smooth interactions throughout every stage of a customer’s shopping experience. 

Jezzlyn aims to replicate this success, as understanding and fulfilling customer needs can foster customer retention and further growth for her company.

3. Keep up with the latest technologies that could benefit your business

On a similar note of prioritising customers, Jezzlyn underscored the importance of integrating innovative technologies for enhanced customer experiences at Sono Holding. 

Jezzlyn was inspired by the latest AI technologies showcased during the expedition, spanning live streaming, AI digitalisation, and cutting-edge marketing automation tools. 

She told Vulcan Post that these ideas have sparked discussions in her team to think up digital promotional strategies for Sono Holding’s products and services.

Founder of Pastels Group, Sarini Zainal Abidin was left with a similar takeaway for her business.

“Alibaba leverages big data and AI to enhance user experience, improve logistics, and personalise recommendations,” she noted.

Based on this learning, Sarini aims to utilise similar strategies in taking advantage of big data to design the right products that target the right audiences.

Elevating local businesses through international collaborations

Ultimately, the participants shared that the ECX23 expedition to Hangzhou opened their eyes to opportunities for expanding their sales channels. 

This overseas mission also highlights Sidec’s dedication to fostering international collaboration and enriching business networks. 

So, if you’d like to take part in future opportunities to connect with industry leaders and drive your business forward, registrations for the next ECX cohort will be opened in mid-2024 on Sidec’s website.

Sign-ups are also open for the Top E-Commerce Merchant Awards, which is a recognition programme for the most innovative homegrown e-commerce merchants in Malaysia.

• Learn more about the Selangor E-Commerce Xccelerator Programme here.
• Read other articles on Malaysian startups here.

Featured Image Credit: Sidec

American tech giant Amazon is laying off several hundred of its employees across its streaming and studio operations, according to an email sent by Mike Hopkins, the Senior Vice President at Prime Video and Amazon MGM Studios, on Wednesday (January 10).

The layoffs come as the e-commerce giant looks to “increase investment and focus on content and product initiatives that deliver the most impact” for the business’s long-term success.

Amazon’s announcement of the layoffs came the same day as the live-streaming platform and the subsidiary of the e-commerce giant, Twitch, disclosed that it would lay off about 35 per cent of its workforce, or about 500 employees, across various locations, including Singapore.

While the live-streaming platform’s business “remains strong”, Twitch CEO Dan Clancy shared in a blog post that the organisation has made this “difficult decision” as the headcount of Twitch remains “meaningfully larger than it needs to be given the size of its business” despite “cutting costs” and “making various decisions to be more efficient” over the past year.

Last year we paid out over US$1 billion to streamers. So while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in three or more years, not where we’re at today.

As with many other companies in the tech space, we are now sizing our organisation based upon the current scale of our business and conservative predictions of how we expect to grow in the future.

– Dan Clancy, Twitch CEO

Amazon acquired Twitch back in 2014 for nearly US$1 billion as it looked for a way to take part in video gaming’s growth as an online spectator sport. However, the live-streaming platform has failed to turn profitable since its acquisition.

Last month, Clancy announced that Twitch would be shutting down its South Korea operations in February due to high operating costs and network fees. Twitch also previously laid off more than 400 employees in March 2023, just after its longtime CEO Emmett Shear departed the company after 16 years.

Meanwhile, Amazon laid off more than 27,000 employees in 2023, including its Prime Video and Amazon MGM Studios employees. The e-commerce giant is far from alone, though — as part of a wave of global tech layoffs, Meta and Microsoft each laid off 10,000 workers last year, while Google cut its workforce by about 12,000 employees.

Featured Image Credit: TechCrunch

Disclaimer: Unless otherwise stated opinions expressed below belong solely to the author.

Not a month has passed since the news broke of another capital injection into Lazada by its Chinese parent, Alibaba, worth US$634 million (S$843 million) and yet the company decided to shock thousands of its employees by laying them off right after they returned to work from a holiday break.

It wasn’t the first support tranche last year either, with another S$1.1 billion in July and S$470 million in April of 2023, followed by another S$2.1 billion received in 2022.

And it’s not like Alibaba is starved for cash, since the company is bringing US$20 billion (S$26 billion) in annual profits from all of its operations — it could easily bankroll Lazada for years without breaking a sweat.

This is markedly different from its Southeast Asian competitor, Sea Ltd., which continues to rely on a few billion it still has in the bank, and so far, irregular and relatively small profits it has managed to squeeze out across 2023.

On paper, then, it seems that Alibaba should use its resources to finally catch up to Shopee, which is currently under pressure, and seize the e-commerce crown in Southeast Asia again. It has the money Sea can’t currently raise (and is unlikely to in the coming years), so why leave the battlefield now?

A toxic mix…

..money & politics. While we can only speculate on the exact reasons, the swirling rumours of an incoming IPO, which would see Lazada open up to international stock investors, suggest that it might have to do something with the current business climate in China.

As I observed in April last year, regular financial injections were not a sign of investment but a preparation to spin Lazada off, likely for political reasons.

It’s no secret, after all, that Chinese tech companies have found themselves under pressure from the government in Beijing, with Alibaba being the first victim following its founder’s, Jack Ma’s, 2020 speech critical of local banking regulators.

Within weeks, the highly anticipated IPO of Ant Group, the financial services arm of Alibaba’s empire, was cancelled, and Ma disappeared from view, never to return to public appearances.

Since then, other companies have either suffered a similar fate- like Didi Chuxing’s infamous delisting from the New York Stock Exchange just months after its IPO in 2021- or tried to diversify away from China, cutting ties with the mainland.

Global fast fashion giant Shein closed its Nanjing business and moved its HQ to Singapore; Temu performed a similar manoeuvre, registering in Ireland, while smaller businesses are moving entire factories abroad to avoid falling victim to either overzealous regulators at home or suspicious ones in the US or Europe.

Last year’s restructuring, which saw Alibaba divide its businesses into six divisions, may suggest that the company is either under political pressure to spin off its foreign operations, or intends to release them from the burden of operating under the watchful eyes of Beijing’s bureaucrats.

We won’t know for sure until we see Lazada’s float — i.e. how many shares Alibaba releases into open trading. This will indicate whether it seeks to give the business more flexibility to operate abroad or get rid of it by selling a majority stake to foreign investors.

However, given the current market aversion towards former growth stocks — which saw listed companies like Grab or Sea Ltd. tank from their record highs by 80 or even 90 per cent — Lazada needs to show profitability before it tries to raise money in the market.

Hence the S$4.5 billion invested in the business by its parent over the past two years coupled with the ongoing ruthless job cuts which reportedly may see 30 per cent of staff across all regions axed, in a brutal pursuit of profits.

For IPO to be a success, Lazada has to look like a healthy business — preferably more so than Sea Ltd. does, to justify a healthy enough valuation for Alibaba to claim it as a success.