Day: April 21, 2020

Globally, few countries are unaffected by a coronavirus pandemic that is changing the way we live and work. In Australia and across the Asia Pacific, businesses and entire industries are being forced to rapidly adapt the way they operate and engage with their customers.

One of the worst hit areas of the economy is the retail industry, which has been built on the curation of delightful, in-store experiences between retailers and consumers. With high streets, towns and cities in lockdown aside from only those stores deemed an ‘essential service’, retailers are bereft of the customers, and therefore the cash flow they rely on.

A retailer’s ability to survive through the challenging few months ahead depends on how quickly they can adapt, evolve and pivot their strategy to accommodate the changing needs of a customer base who they can no longer engage with face-to-face, in-store.

While for many, the coming months may be daunting – and cash flow has slowed – it doesn’t have to be the end of a business. In fact, many tech-savvy retailers are understanding the value of an online presence, how it can help them build a bridge towards the retail spring and how it can keep their cash flow flowing in the short- and medium-term.

Crunching the numbers

During these uncertain times, cash really is king and there is a no more important measure to closely monitor both daily and weekly. Before you can put in place systems to help you manage your cash flow, it’s necessary to deep dive into your finances and understand every dollar, where it’s going and where it’s coming from.

Analyse your financial statements and retail reports to understand your cash flow, inventory, and expenses. With regards to your cash flow, determine how much money you have in the bank and how long your resources can last. Knowing how much financial breathing room your business has will help you make decisions on what to do.

Also Read: How COVID-19 is changing traditional retail and e-commerce in SEA

Then consider your stock, and how much of your capital is tied up in your inventory. If your retail business deals with perishable or seasonal goods, how much do you have and how quickly do you need to deal with it? If your business is set up to sell online, identify the products that would have the highest demand and find ways to put them in front of your customers.

Finally, get a handle on how much you owe and when you owe it by. If possible, call your creditors, landlord, suppliers and anyone else and ask them if you can either defer payment temporarily or renegotiate payments. During a global crisis like this one, you might find that people are more altruistic and willing to help you out. 

What to cut and what to prioritise

You might find that you can alleviate some of the financial pressure on your business by temporarily putting a halt to non-essential spending. Identify your business’ needs and wants, and cut back on the latter. Expenses like utilities and retail management software are examples of a ‘need’, but things like your in-store Spotify subscription or other luxury expenses would be considered a ‘want’ and thus need to be eliminated temporarily.

Go through your business bank statements to identify your expenses over recent months, then use that to figure out which costs remain essential and what can be put on hold for the next couple of months. It’s likely that every dollar matters, so be ruthless – there’s nothing to stop you reinstating subscriptions and other expenses when normality begins to return.

Unless you’re not doing business at all, marketing is likely an expense you’ll want to maintain, though – especially when considering how it will help you communicate crucial changes and new processes to your customers.

If you’re still selling, it’s more important than ever to get in front of your customers. Identify which channels, campaigns and efforts have the potential to deliver the best ROI, then double down on them. 

Improve cash flow

Cutting non-essential spending will ease cash flow concerns slightly, but you still have to find ways of bringing money into your business. What products do you sell that would help people navigate these times? With more consumers staying home, do you have items that can help your customers be more productive while working from home?

Also Read: How COVID-19 is changing traditional retail and e-commerce in SEA

If your retail business sells homewares, fitness equipment or arts and crafts, for example, you might find your products in high demand. If you have a lot of excess stock, that’s a lot of money tied up, so consider how you can incentivise people to buy it through promotions or discounts. Gift cards, too, could be a great way to get money flowing into your business so look for ways to build that into your sales plan, too. 

Don’t be afraid to ask for help

While it’s easy to feel adrift and isolated, we’re a community and we’re in this together – it’s OK to ask for help. Governments, businesses and industry bodies are rushing to create programs to help small businesses stay afloat during these turbulent times.

In Australia, for example, if your turnover has reduced by over 30 per cent, you may qualify for a government subsidy through the new JobKeeper Payment. It’s a fortnightly payment of AU$1,500 per eligible employee for a period of up to six months.

In addition, the Government has agreed to a temporary ban on evictions over the next six months for commercial and residential tenants who are unable to meet their commitments due to the impact of coronavirus. There’s also a series of business support funds and initiatives being introduced in states and cities across the country.

In Melbourne City, for example, businesses may be eligible for AU$5,000 worth of grants to develop an e-commerce site. Another great resource is LoveLocalRetail. Powered by Vend, it’s a coalition of tech companies coming together to provide advice and offers to help small retail businesses respond. Please, wherever you’re based and whatever you sell, don’t be afraid to reach out and ask for help. 

The independent retail industry in Australia and across Asia Pacific is a resolute and dynamic community, capable of great innovation and overcoming challenges. This may be the biggest challenge many of us have faced, but by taking quick and adaptable steps to take charge of your short- and medium-term finances, you might find that the challenge seems that little bit more manageable.

We don’t have a crystal ball, so we don’t know exactly how long the current situation will last, but we’re confident that a beautiful retail spring will dawn, with busy high streets, beautiful shop fronts and delightful experiences between retailers and their customers once again.

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With COVID-19 causing severe turbulence in the stock market, the move towards investing in digital assets is increasing. Coronavirus has impacted all financial products whether it be traditional equities and bonds, commodities, or even cryptocurrencies.

Digital assets have the potential to disrupt entire industries and the global market. The economic impact of the pandemic has resulted in a surge of interest in digital assets, mainly Bitcoin (BTC).

In early February, Google searches for bitcoin surged by 33 per cent, demonstrating the increase in interest for an alternative to a bank controlled economy. As a result, out of all digital assets offered, I believe this could be Bitcoin’s year with an impending boom in digital asset adoption across the globe.

Bitcoin adoption

Although one of the more traditional digital currencies, from interviews with our clients and from talking to folks in the market, it seems a lot of investors were getting margin called, or their fear from other assets tanking had transposed to the digital assets world.

Those that were getting margin called in their other assets had to sell BTC in order to gain liquidity to continue to fund those other assets. This is perhaps evidence that BTC has finally been adopted as an alternative asset since the wider adoption (and trading of) BTC by both retail and institutions, the more macro-effects will have an effect on its prices.

Also Read: Is Bitcoin the safest currency in times of rising global tensions?

Challenges faced by bitcoin

Although Bitcoin was created with an intention to replace traditional currencies, it is still hard for it to be adopted as a mainstream currency because of the time it takes for transactions to be confirmed.

Imagine buying ice cream and having to stand there to wait 10-30 minutes. The ice cream will have, more likely melted in the time it has taken for the shopkeeper to confirm that your payment has been accepted.

In fact, the authorities in Indonesia (where Zipmex is legally regulated) have decided that digital assets are a commodity and should be regulated under their Commodity Futures Trading Regulatory Agency (BAPPEBTI).

Whether or not digital assets should be viewed as a commodity is a debate for another day since there are many types of use cases of digital assets whether it be stable coins, asset-backed or utility tokens.

An attractive investment post-COVID-19

Many agree with the fact that Bitcoin is like digital gold – a commodity in which you can invest in during current tough times. Its price is determined by the belief that is instilled in it.

In fact, after the almost 40 per cent drop in prices, BTC has rebounded significantly. At the time of writing, it has increased by approximately 70 per cent from its lowest point this month.

Also read: Is Bitcoin the safest currency in times of rising global tensions?

If you compare this with the Stock Exchange of Thailand( SET Index) Thai stocks have been decreasing since the start of the year, and after BTC has recovered, Thai stocks are still hovering around their rock bottom prices. It remains to be seen whether recovery will come any time soon.

Hence, at Zipmex we believe in providing digital assets as an alternative financial instrument, especially in times of crisis.

Global recession and bitcoin 

With a global recession looming, purchasing power of traditional currencies is bound to be impacted. For those who understand the benefits of cryptocurrency, I predict there will be a surge in interest in owning bitcoin.

This will be mainly down to cryptocurrencies’ ability to alleviate a portion of pending pressure on traditional markets as we enter a global economic downturn.

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Two quarters ago, the future seemed optimistic for Southeast Asia (SEA). Economic projections for the fastest-growing of these economies rose to the high single-digits. Broadband adoption was reaching a critical scale.

New startups driven by a generation of young founders with international experience were rising to the region’s challenges and searching for traction. 

It now seems very likely that the economic consequences of this disease outbreak will be generation-changing. While economic and tech expansion will continue, the ground-truths of the current COVID19 situation show that innovative thinking will have to lead us through the disaster.

With sealed off countries, work-from-home lockdowns, and breakdowns in profit growth in nearly every industry vertical, where can founders turn when it comes to finding solutions in this environment? 

At AppWorks, we are certain that founders will be among the group of people creating solutions that will bring SEA back to normalcy, and as always, we are ready to rise to the challenge.  We have evidence to show that Taiwan can be a country from which SEA founders can re-launch when they are ready. 

Also Read: Bfab, Dealguru co-founders launch iSaveSG to save Singapore’s pandemic-hit businesses

Taiwan possesses an e-economy that is not only well-versed in tech usage, but as the largest e-economy in the region, at US$42 billion per year, it has not slowed down significantly during this pandemic. Startup founders have worked with government officials to take an already planned-for mitigation strategy and accentuate it with tech. 

From the installation of vending machines that distribute face masks, to an unprecedented tracing technology through mobile and GPS coordinates, Taiwan has stayed ahead of the pandemic curve. It’s economy and its national health statistics have reflected this tech-forward approach. 

The knowledge networks that have kept the country’s portion of the supply chain running, and a decade-long history of aiding startup growth, means that smart founders who still have their eyes on expanding through SEA should consider the island as their starting point when this horrifying pandemic eases. 

Taiwan will clearly be among the first countries for startup founders to turn for growth and learning when it becomes possible to move freely around the region again. 

Taiwan is an undiscovered launch pad for the region

Companies originally from Singapore — Shopback, social streaming company M17 and the e-commerce unicorn Carousell — have established engineering and R&D teams in Taipei. 

Companies such as AI-driven consumer analytics company Tagtoo (AW#1) and Hong Kong-based Omnichat (AW#16) whose founders participated in the AppWorks accelerator, gained much of their traction by leveraging the Taiwan ecosystem. 

Also Read: Hope for the best, prepare for the worst: Advice for founders preparing to retrench amidst COVID-19

All of these companies have used the microcosm of the AppWorks Accelerator and the macro-economy of Taiwan to gain a foothold and expand, through either direct or indirect experience in the semi-annual sessions devoted to blockchain and AI and the community.

Community is an accelerant for learning and scaling

For young founders, a community is a lifeline to growth. In the AppWorks network, 376 operating startups and the 1,113 founders who run them have proven vital for any founder that is trying to solve a hard problem, grow at scale, make acquisitions of talent, or find funding. 

Sometimes this network and community come in in-person format, but it can also be virtual, as it has been so especially during the COVID19 pandemic. To accommodate founders who are not able to travel to Taiwan, and to enable connection among founders who continue to build during this time, the accelerator team holds virtual office hours and online seminars via Zoom on a regular basis. 

This would be true, in any case, and it has become something of a new manner of doing business. Over the past three years, AppWork’s community has started to span across tech hubs throughout SEA and become more distributed. Over the past 18 months, the number of these startups infiltrating SEA has grown at a 1.6 times pace. 

The types of founders in this network give some insight into what kind of knowledge network is at hand during these virtual calls and virtual meetups. In many cases, former accelerator teams have reached a point where they have started to grow and are raising money to fuel expansion. Their insights can provide valuable feedback for other founders who want to go down the same path. 

Mentorship by leaders of IPOs shaping decades of ecosystem growth

The AppWorks mentor network provides access to more than 100 seasoned founders, each with at least 10-20 years of experience in nearly every technology business vertical.

Also Read: Hiring for startups: What founders really look for

Through an in-person Mentor Day, the accelerator team connects early-stage founders to this network in an intimate setting organised around pitching and personal meetings. 

Founders get to meet founders in our investment portfolio such as Sui Rui Quek, founder of Carousell; Joseph Phua, co-founder of live streaming social platform M17; Benjamin Wu, co-founder of iChef. 

Peggy Cheung, a Hong Kong founder who established photo platform startup KaChick (AW#19) with co-founder Larry Lam, has firsthand experience with this. She came to Taiwan last year and says that the experiences with her mentor, Ming Chen from travel startup KKday, have focused her development efforts.

“My mentor sometimes sees what I can’t see in myself and gives me the courage to be bold,” she says. “In some cases, our discussions saved me time from dwelling into unimportant matters or walking towards directions that make little sense.”

Resources

Having this kind of human support makes it easier for founders to extract value and make important connections with the macroeconomics of the country. 

AppWorks alumnus Andrew Jiang, founder of hardware-as-a-service (HaaS) venture builder Soda Labs, was part of cohort #17. He came to Taiwan from Silicon Valley. To build out his HaaS startup, he partnered with tech giant Foxconn and hired local engineers. These AppWorks Accelerator-fostered connections solved critical problems in Jiang’s mission. 

Besides connections, AppWorks provides all the essentials that a startup needs in the early days and that they could otherwise find scattered around the island’s tech hubs like business credits supplied to founders from partners at AWS, GCP, and more.

Also Read: What startup founders can learn from Netflix’s “The boy who harnessed the wind”

Separate from the AppWorks offering, the Taiwanese government itself makes it easier for founders to get established on the island. Recently, the government built out a new initiative called Startup Island, geared to help international founders explore Taiwan as a launching pad.

Though the COVID19 pandemic has put a freeze on new visa issuance temporarily, the government makes it possible for entrepreneurs to apply for an “Entrepreneurs Visa.” 

In December, Taiwan’s National Development Fund — a fund of over US$18 billion — announced that it is primed to make investments of at least US$180 million in the next few quarters, largely in Blockchain and AI. 

The next steps 

While many economies around SEA find themselves grappling with precipitous falls in GDP, with many eyeing security strategies that will seal off their borders and preserve resources for their citizens indefinitely, Taiwan will remain a willing partner to SEA founders seeking to find a foothold here. 

We expect that when life returns to what will likely be a new form of normal, the nation and our accelerator will be open, and willing, to help founders from all around the region. 

AppWorks runs a semi-annual accelerator for Blockchain and AI startup founders. Their next application period opens in May. Founders can register their contact details at their accelerator site and get the application details sent directly to them when the process begins.

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Bukalapak CTO Nugroho Herucahyono has left the company

After a surprise departure of its CEO and co-founder Achmad Zaky in December 2019, Indonesian e-commerce unicorn Bukalapak saw the departure of another co-founder, CTO Nugroho Herucahyono.

DealStreetAsia reported that Herucahyono’s resignation was announced to the company at an internal online meeting on Friday.

Herucahyono has also updated his LinkedIn profile which shows that his tenure at Bukalapak ended in March.

US, Vietnam strike up a US$42M economic deal to boost competitiveness

A US$42 million deal between the US and Vietnam has taken place in a bid to focus on making the private sector, startup ecosystems, and human capital more competitive.

According to Vietnam Express, the agreement was signed by the United States Agency for International Development (USAID) and Vietnam’s Ministry of Planning and Investment, seeking to foster greater entrepreneurship, enable deeper linkages of Vietnamese startups to corporations, investment capital, and other supporting organisations in the international innovation and startup ecosystems; and churn out high-quality human capital needed for a robust knowledge-based economy.

Also Read: Is Vietnam the new golden child of tech startups in SEA?

Daniel Kritenbrink, US Ambassador to Vietnam said that the agreement is the country’s continued commitment to support Vietnam’s efforts to become a more open and inclusive economy.

Singapore introduces IOT-enabled tele-ventilator to reduce facility occupancy during COVID-19

ABM Respiratory Care, a Singapore-based medtech startup, has developed an IOT-based tele-ventilator that can help healthcare professionals monitor and programme the device from anywhere in the world in real-time.

According to Biospectrum Asia, ABM is preparing for fast-track approval of its invention with regulatory agencies in several countries, including Singapore.

Branded as BiWaze ION, the tele-ventilator is described as having both invasive and non-invasive modes and can be deployed in an ICU, ambulatory, or subacute settings for pediatric and adult patients.

Users of financial planning tool in Singapore increase by 70 per cent

The COVID-19 outbreak has seen a 70 per cent increase in financial advisors subscribing to the platform, Singapore-based fintech tool GoalsMapper stated.

“During the Circuit Breaker period, financial advisers are not able to conduct face-to-face meetings with clients. The current situation has caused us to expedite the pace of using technology to explore new ways of working and connecting with clients,” said Alfred Chia, CEO of SingCapital, a MAS-licensed financial advisory firm.

Also Read: How fintech is disrupting the Southeast Asian payments market

The GoalsMapper app assists the digitisation of charting and mapping financial goals and has supported about 1,200 insurance agents in Singapore.

With GoalsMapper, financial advisers can key in their client’s information such as a housing mortgage, children’s education expenses, and their ideal retirement ages, and the platform will generate charts that enable them to visualise the cash that they require to achieve these life goals.

The company was established in May 2018 and has since expanded to Malaysia and Thailand.

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Image Credit: Bukalapak

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gojek acquires Moka, a fintech startup providing payment solutions for SMEs

Kr-Asia reported today that ride-hailing giant gojek has acquired Moka, an Indonesian fintech startup that provides payment solutions for SMEs.

This acquisition will combine gojek’s digital wallet GoPay’s 420,000 merchants to Moka’s client base of 40,000 retailers together, giving the two companies access to a broader network.

Although the company has not officially announced it, the commissioner of Indonesian Business Competition Supervisory Commission, Guntur Saragih, has confirmed the news to KrASIA.

The two companies have launched a collaborative project in support of local businesses affected by the COVID-19 pandemic’s impact.

Clarilis appoints Grace Loh Head as head of Business Development in Southeast Asia

Legal tech company Clarilis today announced the appointment of Grace Loh, former COO of RHTLaw Asia, as head of Business Development of Clarilis in Southeast Asia.

Loh brings in experience from her previous company where she was involved in product development, business growth, and strategic partnerships.

Also Read: Morning News Roundup: Bukalapak CTO left; Vietnam-US sign US$42M deal to boost competitiveness

“Loh’s appointment comes at an interesting time for Singapore and SEA with COVID-19, but we are confident that the region will overcome this setback and demand for technology solutions that add value to the organisations will continue. Her hire reflects our strong belief and commitment to Singapore and the SEA region,” said Malik Anwar, Director of Clarilis SEA.

Clarilis provides drafting automation solutions to legal services that aim to make the drafting process simpler, secure, and more efficient.

Shopee pledges US$1M in support packages for sellers amid COVID-19

Shopee, an e-commerce platform in Southeast Asia and Taiwan, has promised US$1 million worth of support packages for local and small and medium enterprises (SMEs) struggling to cope with the impact of COVID-19 on their businesses.

According to the company statement, the support package will benefit sellers in advertising, cashback, free shipping, and training. 

“Being a homegrown company ourselves, Shopee has always been dedicated to nurturing and empowering local entrepreneurs and SMEs. This initiative fortifies our commitment to doing our part to help businesses tide through this unprecedented situation. As the current economic climate continues to change, we look forward to working closely with the community as we remain united in overcoming these challenges.,” Zhou Junjie, Chief Commercial Officer at Shopee, said.

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Image Credit: gojek

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