Day: March 12, 2020

The COVID-19 (Coronavirus) outbreak has resulted in empty shopping malls across Asia, especially in countries such as Singapore, South Korea, and China where the spread of the virus has been even more pronounced.

Except for the initial weeks where consumers wiped out supermarkets of toilet paper, instant noodles, and rice, most are avoiding crowded areas and delaying non-essential purchases and travel across Asia and now globally.

Besides a slow down in business travel, tourism has also been greatly impacted. According to the Singapore Tourism Board (STB), tourist arrivals are expected to drop by 25 to 30 per cent this year due to the COVID-19 virus.

This would indeed have a negative impact towards retail sales, especially for a country that is highly dependent on tourist dollars. Under pressure to reduce rent by retailers, shopping mall owners such as Capitaland will be offering rental relief of 20-30 per cent at the end of March 2020 for affected tenants mainly in the downtown shopping belt.   

In Malaysia, retailers have encouraged shopping malls owners to give them rental rebates of between 30-50 per cent after seeing a decline in sales of up to 50 per cent.  The Department of Tourism in the Philippines announced that the Nationwide Mall Sale will be postponed until further notice. This event was initially scheduled to start on Sunday, March 1, 2020. 

In contrast to the depressing situation which traditional retail is facing, e-commerce has benefited from this episode of the virus outbreak as people are now turning to online grocery platforms to purchase their daily necessities.

Also Read: Morning News Roundup: Vietnam’s e-commerce startup Leflair accused of owing US$2M to suppliers

In China, for example, Carrefour reported vegetable deliveries growing 600 per cent year-over-year during the Lunar New Year period and JD.com saw an increase of 215 per cent in online shopping grocery sales to 15,000 tons in just the first 10 days of February 2020.

This pattern of behaviour is similar to the impact that SARS (Severe Acute Respiratory Syndrome) had on purchasing behaviour almost two decades ago. SARS spurred the growth of e-commerce and likewise, with the outbreak of COVID-19, it will encourage the rapid movement from traditional store-based selling to digitalisation and retail through omni-channel.

When the deadly SARS outbreak hit China then, it helped accelerate the development of the e-commerce industry in the country. SARS forced JD.com to start selling its products online in 2004 and now it is the largest online retailer in China.

Alibaba also experienced a positive impact as a result of SARS by seizing the opportunity to go C2C with the creation of Taobao as a result of reduced foreign business travellers to the country.

Just like SARS, the presence of COVID-19 will result in consumers moving their purchases online, however, the impact would be even more far-reaching as the COVID-19 spread is more global in nature. So what can retailers and shopping malls do to keep revenues up and remain relevant in these challenging times? 

Retailers go online

According to Esther Ho, Nanyang Polytechnic school of business management director, in a Straits Times article, “Physical store sales will be the most impacted in light of the COVID-19 situation. This may provide the impetus for retailers to seriously consider (going) online, especially if there are success stories to share.”

Also Read: Keep calm and remain communicative: Startup founders share how they cope with coronavirus crisis

Good examples of such success stories include Iuiga and Awfully Chocolate who have reported that their online sales have experienced a surge, even though they have been experiencing a drastic drop in sales at their offline stores in shopping malls due to COVID-19. 

Most notable retailers have begun their foray into e-commerce over the past decade as part of their overall channel strategy either as a branded online store or as parts of an existing online marketplace such as eBay, Amazon, Lazada or Qoo10.

Many more can leverage this consumer behaviour change to drive their digital transformation, ensuring that they remain accessible to their customers even in these hard times. 

What can shopping malls do to remain relevant?

Shopping malls also come under tremendous pressure as a result of the COVID-19 virus. As landlords, making sure that their tenants stay afloat has a direct impact on the bottom line, lesser tenants mean less rent revenue collected. This is especially true if a major component of rent is a percentage of sales generated by the tenant at their store in the mall. However, getting consumers through the door and maintaining the usual footfall traffic at the malls is difficult during this time. 

Retailers have shown the way to cushion the losses in their stores is to move their business online. Shopping Malls can do the same, allowing regular customers to continue shopping at their favourite stores in the malls but as a shopping mall online marketplace.

Online marketplaces are not new and they have seen tremendous growth globally.

Also Read: Coronavirus is driving the world into an economic slump. How to cope up?

In fact, Euromonitor reported that 47 per cent of all digital commerce sales in Asia are made through marketplaces in 2018. Shopping Malls are inherently physical marketplaces themselves, in reality, they are a collection of different vendors in a physical location.

As such, to remain relevant in these hard times, shopping mall owners can create an online version of their shopping malls in the form of a mall branded online marketplace by adding a digital multi-vendor marketplace platform to their current business models.

Pursuing an “offline to online” (O2O) dual strategy would not only add on a new channel of distribution for tenants of the mall but also help cushion sales losses at their physical stores.

Consumers who are loyal and regular visitors to the shopping mall would now be able to avoid catching the virus from crowds and shop at their favourite retailers from the safety and comforts of their own homes. 

The COVID-19 virus spread is, unfortunately, gaining pace around the world with no end in sight. Its sustained impact will cause a fundamental change in consumer behaviour, fuelling the growth of e-commerce and the slow demise of traditional retail.

As the saying goes, “disrupt or be disrupted.” Any retailer or shopping mall owners who do not start embracing online commerce as part of their business strategy may see themselves left behind and soon disappear as their businesses falter.

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Image credit: Boudhayan Bardhan on Unsplash

The post How COVID-19 is changing traditional retail and e-commerce in SEA appeared first on e27.

Business

Funding for proptech in Southeast Asia holds strong at US$72.9M

Southeast Asia poses the second highest number of deals and undisclosed funding across of Asia Pacific in 2019, showing a strong focus in proptech since 2017, reveals a JLL-TechInAsia study.

This is despite an overall funding decline by 38.4 per cent in Asia Pacific last year after reaching a high of more than US$1 billion in disclosed funding in 2018.

“The demographic in Southeast Asia has favourable elements supporting investment into proptech. This includes a young and growing tech savvy population, urbanization and a growing real estate footprint fuelled by strong economic growth and higher market transparency. We expect investments to continue in the region and play an increasingly influential role in the way real estate is managed and transacted,” said Chris Fossick, CEO, JLL Southeast Asia.

Last year, proptech startups in the region raised US$625.9 million, out of which, Southeast Asia raised a total of US$72.9 million. Out of the 38 total deal counts in 2019, the region accounted for 11 of these deals, clocking in the second highest record of deals as well as funding across of Asia Pacific.

Jordan Kostelac, Director of Proptech, JLL Asia Pacific, explained: “These figures are only indicative of VC interest and they’re less reflective of what’s really happening in our industry. In our work with clients and fellow corporates, we are seeing that interest in proptech in Asia Pacific continues to grow, with traditional players taking a strategic, integrated approach with start-ups instead of the VC investment route.”

Funding

Early-stage VC investor Strive makes the final close of its third fund at over US$100M

Early-stage VC fund Strive (formerly known as Gree Ventures) has announced the closing of its third Asia fund at more than US$100 million.

The fund was launched in April 2019 and it’s being deployed into seed-stage opportunities in the B2B sector across Southeast Asia, India, and Japan, as reported by Tech In Asia.

Also Read: GREE Ventures rebrands to STRIVE, announces $130M

The new fund includes investors such as returning limited partners and government-backed SME Support Japan, social media company Gree, and Mizuho Financial Group members Mizuho Bank and Mizuho Capital.

The fund was first announced with US$130 million raised in May 2019 and was already being invested into edutech startup ClassPlus and Tokyo-based application programming interface for know-your-customer services, TrustDock.

With its third fund, the firm said it has also co-invested with other leading VCs such as Sequoia Capital, Monk’s Hill Ventures, Nexus Venture Partners, and Accel Partners, so it can establish itself as a cross-border Asian fund with a presence in India, Southeast Asia, and Japan. Recently, Strive promoted Nikhil Kapur, who led the third fund invested into a dozen investments for four years, as a partner.

Social fans club platform Superfanz raises seed funding led by NXT Ventures

Superfanz, Asia-based social fan club platform for creators (KOL, Influencers, YouTubers, and similar), announced today that it has raised a seven-figure seed round of funding led by NXT Ventures after launching its platform.

According to an article by Asia One, the investment follows a six-figure angel round with a prominent investor and tech entrepreneur in July 2019.

Superfanz seeks to address the pain point in which over 90 per cent of the creators do not earn enough money from their social media accounts to make a living.

The startup launched its Android app at the end of last year and is officially soft-launching a Pan-Asian fan club platform for creators and special interest groups this year across Thailand, Taiwan, and Vietnam.

People

LinkAja CEO resigns to join MD of Good Doctor Indonesia

Danu Wicaksana, CEO of Indonesian e-wallet provider LinkAja has left the company to join healthtech company Good Doctor Technology Indonesia as its Managing Director. He will oversee the operation of Good Doctor Technology via Grab’s in-app health channel Grabhealth.

Wicaksana updated its personal LinkedIn profile to confirm the move that has taken place since February, as reported by TechInAsia.

Also Read: Together with Ping An, GrabHealth starts to show its teeth in Indonesia

Wicaksana has been CEO of LinkAja for three years, since it was still using the TCash brand, owned by Telkomsel). LinkAja itself is a product of several government-owned e-wallets that merged into one.

Good Doctor Technology that welcomes Wicaksana is a healthtech company formed by Grab and China-grown O2O healthcare Ping An Good Doctor.

Global investment firm KKR welcomes Chee-Wei Wong as Asia’s Head of Global Impact

KKR, a global investment firm, has announced the expansion of KKR’s Global Impact team by appointing Chee-Wei Wong as Head of Global Impact for Asia.

In the role, Wong, based in Singapore, is responsible for sourcing investment opportunities and supporting impact-related portfolio companies across Asia Pacific. Wong will also serve as a member of the firm’s Global Impact Investment Committee.

Prior to joining KKR, Wong was a MD at Tailwind Capital in New York and spent nine years at EQT in New York and Singapore, where he was an investor and board member of sustainability-focused technology enterprises and healthcare companies. Before that, he was a consultant at Bain & Company and a Justices’ Law Clerk in the Supreme Court of Singapore.

Focussing on identifying and investing behind global opportunities where financial performance and societal impact are intrinsically aligned, the firm’s business specifically lays eyes on companies whose core business models provide commercial solutions that contribute measurable progress toward one or more of the United Nation’s Sustainable Development Goals.

The addition of Wong follows KKR Global Impact’s recent international expansion with the appointments of Stanislas de Joussineau as Head of Global Impact for Europe and Sharon Yang as a senior investor for KKR Global Impact in Asia.
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Picture Credit: Strive

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Sales automation firm Novocall lands US$500K from 500 Durians, others

Novocall, a Singaporean startup that automates sales processes for agents, has raised US$500,000 in a round led by 500 Durians, the Southeast Asia-focussed fund of 500 Startups.

Other participants in this round include 500 Startups Thailand, Expara Asia Ventures, and Exabytes founder and CEO Chan Kee Siak.

The funding will be used to support the company’s expansion plan, according to a press statement. While Novocall already has clients in Singapore and Malaysia, it is looking forward to expanding to Indonesia and Thailand.

The B2B SaaS platform claimed that its services are currently used by over 2,000 businesses across 42 countries, more popularly among small- and medium-sized enterprises in the education and travel sectors.

Honestbee slashes a big chunk of its staff yet again

Singaporean delivery startup Honestbee is laying off around 100 employees which make 80 per cent of its workforce, according to a Deal Street Asia report. The exact number of layoff remains undisclosed.

Also Read: honestbee to get US$7M to repay its creditors: Report

“Due to several external commercial pressures that have resulted in the closure of habitat by Honestbee, the company has made the strategic decision to reduce its staff force. As a result, the company has decided to reduce its non-core staff as it does not foresee operating habitat in its full strength over the next few weeks,” said an Honestbee spokesperson.

Honestbee’s court hearing on restructuring itself will be held on March 26.

Singaporean healthcare venture fund invests in lung cancer detection company Breath Diagnostics

Breath Diagnostics announced today that it has raised a “significant” amount of capital from Singaporean healthcare venture fund HealthXCapital, according to a press statement.

The two organisations plan to collaborate to pursue pan-Asian investment, conduct clinical studies, and execute market penetration strategies across the US and Asia.

“Despite the region’s dramatic growth in recent decades, cancer screening in Asia is still a challenge thus exposing the vast majority of the population to cancer risks,” said Seemant Jauhari, Partner at HealthXCapital.

Revolut introduces new countries for currency transfer across Southeast Asia

Revolut will be launching new and direct remittance routes to major countries across Southeast Asia, including India, Malaysia, Indonesia, and the Philippines, according to the company statement. The exact date of the launch has not been confirmed yet, and the feature will be available for all cards.

The fintech company will also be offering other perks like one per cent cashback in 28 currencies, on domestic and international transactions, however, this will only be available for metal card users.

Also Read: Following its recent debut in Singapore, Revolut launches Metal Visa card in the market

“Since Revolut launched in Singapore in October 2019, we have understood this nation’s rich cultural and demographic mix, making cross-border transfers one of the most valuable features to our customers. We’ve only just begun – these new routes demonstrate our commitment to put our customers first and indicate our next steps towards breaking down financial borders,” said Eddie Lee, APAC Regional Director of Operations at Revolut.

India’s Unbox Robotics secures US$500K to bring parcel sorting solutions for logistics providers

Bangalore-based startup Unbox Robotics has raised US$500,000 from Arali Ventures & CIIE.CO, The Innovation Continuum at IIM (Indian Institute of Management) Ahmedabad today, according to a press statement.

Founded by ex-Flipkart employee Pramod Ghadge the business aims to eliminate the inefficiencies in current warehouse automation solutions like space utilisation, installation time, and capital involved.

Also Read: Morning News Roundup: Proptech investments in Southeast Asia grew to US$72.9M in 2019, says study

“The leading e-commerce players across the globe compete to draw in demanding customers with same-day deliveries, discounts, and simplified returns. Warehouse efficiency and lowered costs could prove to be key enablers for the growth of robotics and AI in the logistics sector. Unbox’s space-efficient robots and AI software will make the warehouse powerful and smaller, bringing them closer to customers to offer faster deliveries,” said Vipul Patel, Partner – Seed Investing at CIIE.CO.

Trax closes retail service platform Survey acquisition

Singapore-based retail tech unicorn Trax announced that it has acquired mobile data collection technology for retail, Survey.com at an undisclosed amount according to Tech in Asia.

The startup has made acquisitions all across China, Europe, and North America with Paris based Qopiuss being the most recent one.

Trax aims to create a “closed-loop merchandising system for physical retail,” according to a statement. With the acquisition, the company targets wider reach across CPG (consumer package goods) brands

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Image Credit: Novocall

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Manila-based accelerator programme IdeaSpace announced today the launch of Opportunity Fund, which aims to invest in startups within and outside of the company’s portfolio.

According to a press statement, the fund aims to cater to early-stage to pre-Series A startups, particularly founders who may be looking for funding to help make key business and strategic decisions.

The size of the fund was undisclosed.

IdeaSpace further explained about its PHP1 million (US$20,000) investment into Coins.ph. When the startup was acquired by Indonesian ride-hailing giant gojek in January 2019, IdeaSpace said that they netted a five-times return.

The accelerator has since invested in companies such as 1Export, Experience Philippines, Cocotel, Airship, TimeFree Innovations, and to startups outside of the IdeaSpace network such as Acudeen and Qwikwire.

Also Read: Philippines’ IdeaSpace preps for ASEAN integration

“Our initial investment in Coins.ph showed us that there is another way for us to potentially support startups in their entrepreneurial journey,” noted IdeaSpace Executive Director Diane Eustaquio.

“Not all founders go into our acceleration programme and there’s still a lot of talent and leadership potential in the ecosystem. The Opportunity Fund is a way for us to support those founders and through our investment, show them that they’re on the right track,” she continued.

e27 has reached out to IdeaSpace to find out more details about their plan with the fund.

As a non-profit organisation, IdeaSpace has mentored and supported 91 startups under its incubation and acceleration programme. It has invested over PHP200 million (US$3.9 million) worth of support into the Philippine startup ecosystem.

IdeaSpace is supported by First Pacific, First Pacific Leadership Academy, Metro Pacific Investments Corporation (MPIC), Metro Pacific Tollways Corporation (MPTC), Metro Pacific Hospital, Philippine Long Distance Telephone Company (PLDT), Meralco, Smart Communications, Inc (Smart), Indofood, Philex Mining, Maynilad, and TV5.

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Image Credit: Yannes Kiefer on Unsplash

 

 

 

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Singapore-based Credence Partners has announced the launch of its first venture capital fund and has made the first close at US$50 million.

The VC firm targets the final close at US$100 million.

Credence will invest mainly in Series A and B companies in Southeast Asia. It looks to invest in defensible businesses solving real problems, led by robust and thoughtful founders leading high-performing teams.

The fund has a preference for investing in the enterprise, B2B and B2B2C business models in industries such as fintech, deeptech, consumer, logistics & mobility and tech-enabled businesses.

Also Read: IdeaSpace launches new fund for early-stage startups in the Philippines

Founded in 2006 by Koh Boon Hwee, Tan Chow Boon and Seow Kiat Wang, Credence believes in building portfolio value by applying a private equity mindset to early-stage companies.

“Applying the PE mindset means we will guide and focus the startups on leadership and talent management, on operational fundamentals, with a strong focus on building out commercialisation and business development growth engines,” said Chairman Hwee.

Since its first close, the fund has committed to three investments — a deeptech software company that identifies and quantifies cognitive states wirelessly, a pure-play digital bank, and a mobile-only micro-lending company.

Hwee is a well-known figure in the tech and startup ecosystem in Singapore. As per Crunchbase, he has so far made 28 investments in his personal capacity in companies, including Zookal, Igloohome, Solarhome, Shohos and Square Yards. He also has two exits to his name — Pie and CombineSell.

In the past, he has held key positions in SingTel, Singapore Airlines, DBS Bank, and Temasek, among many others.

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