While no industry is immune to the impact of COVID-19, the traditional retail sector is arguably one of the hardest hit, with most brick-and-mortar shops reeling (and a number even shutting down for good) following the pandemic.

Given a slew of crowd management and safe distancing protocols, traditional retailers find themselves at the precipice of a new retail revolution and shifting from offline to online is the only option to transcend a physical retail landscape typified by limits.

Amidst the pandemic, Singapore’s digital economy grossed US$500 million annually. Additionally, digital payments are projected to make up 67 per cent of the total transaction values in 2025.

The numbers only mean one thing: Retail survival now mainly involves driving online footfall and successfully converting online leads into actual customers.

However, the whole process necessitates revamping the entire value chain and the underlying infrastructure to accommodate digital payment schemes and supply chain paradigms in the new retail ecosystem. While the focus shifts towards leveraging online platforms, this doesn’t mean the total demise of physical retail stores.

It only means that brick-and-mortar shops have to learn how to navigate a new retail world, where consumers value convenience, experience and instant gratification above all.

Also Read: Are retail malls dead? Time for big tech to disrupt landlords at their own game

Consumers today want more flexibility, freedom and personalisation in their retail experience– whether this involves interactions in-store or digitally – and brick-and-mortar stores have to keep up, should they wish to stay afloat.

New paradigms

One bottleneck traditional retailers need to bridge knowledge gaps as success in the new age of retail necessitates employing a more data-oriented approach.

But equally important is identifying the right technology that can serve as the backbone for brick-and-mortar stores’ sustainable expansion in the new normal and beyond.

Digital e-commerce platforms today allow retailers to monitor and generate data around consumer behaviour and preferences, which can complement their marketing and sales efforts.

Metrics such as sales conversion rates, percentage of returning consumers and shopping cart abandonment allow retailers to glean insights around critical trends and behaviour shifts, which are crucial in optimising the customer journey.

Local retailers are also growing increasingly cognisant of the benefits that e-commerce platforms can offer. Since the start of the pandemic last year, Ezbuy has shifted our focus to empowering local merchants, providing them access to real-time data-driven automation for consumer behaviour analytics and a new agile operating model to harness and put these insights into action. Within a year, the number of local merchants on our platform has already increased by over threefold.

However, silos across the value chain need to be eliminated first for the data-driven model to be effective: The retail model is no longer linear, as it had been for the last two centuries. Today, we are moving towards a holistic retail value chain, and the winning retailers have learned to integrate physical and digital touchpoints to deliver seamless customer experiences.

Also Read: Rewriting the retail blueprint: How data is shaping the future of fashion

Having more transparency, agility, and improved coordination across the retail business – from the supply chain to channels and marketing – starts with good change management and a more long-term view of the overall retail business.

Future-proofing retail businesses: The way forward

Increasing sales volumes and maximising profit margins entail coming up with competitive pricing strategies. E-commerce platforms like Ezbuy have artificial intelligence capabilities that provide insights around in-demand product offerings, so retailers can position themselves correctly and reach the ultimate goal of conversion.

We can effectively align our merchants’ products with relevant promotions while increasing offerings of more in-demand products. This allows retailers to optimise profitability – balancing product supply and demand while leveraging pricing polarity as a competitive advantage.

For example, local alcohol retailer The Liquor Shop witnessed an above-average increase in sales volume from partnering with Ezbuy during the pandemic.

Before that, alcohol sales remained stagnant until the platform connected the merchant with a new pool of customers, especially when physical interactions were not possible.

E-commerce platforms also allow retailers to incorporate better time-sensitive promotions, including hourly, based promotion codes and flash deals which can help convert leads to customers. When leveraged correctly, discounts can effectively translate to improved bottom lines.

Elevating the customer experience

In an increasingly experience-driven economy, retailers need to focus on satisfying customers. But developing a great customer experience is only possible if retailers know their customers inside out.

Also read: How your shopping habits are shaping the future of retail in Singapore

As customers’ needs evolve, a greater emphasis must be placed on onboarding merchants effectively to drive faster transactions and reduce waiting times.

As customers go mobile, retailers must adopt a mobile-first strategy to improve customer access to their services. Tapping on the capabilities of e-commerce platforms such as Ezbuy is a simple yet cost-effective way for retailers to expand their market reach in line with keeping up with the shift from desktops to mobile devices.

Consumers will continue to crave the human touch. Driving long-term sustainability in the omnichannel retail value chain means humanising and personalising the shopping experience while ensuring consistency and convenience throughout the customer journey.

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Kenanga Investors Berhad (KIB), a wholly-owned subsidiary of Malaysia’s Kenanga Investment Bank Berhad, has launched a frontier fund.

The “Kenanga Sustainability Series: Frontier Fund” will invest primarily in equity securities of global cutting-edge, innovative companies with long-term sustainable growth potential or are on the cusp of IPO. It will also back companies that have developed/will develop products and services linked to technologically-driven innovations.

Also Read: Kenanga Investors announces the return of unicorn fund, collaborates with Ericsenz Capital

Kenanga focuses on the next-gen or forward-looking innovations currently shaping the future industries, such as the space economy, the metaverse, healthcare, fintech and cybersecurity.

The frontier fund will allow investors to capture the sustainable value generation of these companies, which were previously exclusively available to institutional investors.

According to Kenanga Investors CEO Ismitz Matthew De Alwis, the aim is to reshape Malaysia’s existing private equity space by addressing the lack of available gateways for investors to access investment opportunities in prominent, hard-to-reach early-stage startups.

“Since 2016, emerging digital companies have won over the “old economy” by being among the top five most valuable corporations. Given the constant development of new technologies, it is unsurprising that new technology companies are sprouting. We began bridging the gap between prominent players of the new ‘Big Tech’ and our investors back in 2019,” he said.

“The resulting outcome has been fulfilling for our investors in many ways; from portfolio diversification to the exploration of a new investment universe beyond the traditional investing realm, and so, demand for similar offerings has risen. We are glad to introduce the Fund to the market where investors who were not able to participate previously will have an opportunity to do so this time”, he said.

In his view, frontier tech represents many opportunities in boosting the development curve of the future. The opportunities include utilising technologies to reduce carbon emissions, new medical discoveries to propel patient empowerment, and the democratisation of financial services.

Also Read: Malaysia’s Kenanga Investors launches fund for investing in unicorns

The fund feeds into the Ericsenz Frontier Fund (a VC and PE firm) and is suitable for sophisticated investors with a medium to long-term investment horizons. The initial offer period is from October 27 through December 3, 2021. It is available in both MYR and USD classes so that investors can invest in their preferred currency.

In June 2019, Kenanga Investors launched Kenanga Global Unicorn 1 (KGU1), which aims for medium-term returns by investing in unicorn companies.

Early this week, Bursa Malaysia Securities publicly reprimanded JAKS Resources and its principal adviser Kenanga Investment Bank Bhd, for contravening the exchange’s Main Market Listing Requirements, a Malay Mail report said.

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Investree, a digital lending platform for MSMEs in Indonesia, has received US$10 million in funding from the Swiss asset manager responsAbility Investments.

Accial Capital, a tech-focused investor in fintech lending portfolios, also partnered with responsAbility in the round as an institutional Lender on Investree’s platform. 

Jakarta-based Investree will use the funds to finance its borrowers’ (MSMEs) projects that have significant economic, social and environmental impacts on life, especially during the recovery period due to the pandemic.

Also read: Border-crossing and financial inclusion: The story of fintech in ASEAN

Founded in 2016, Investree aims to use technology and data to make loans more affordable and accessible for MSMEs. 

A Financial Services Authority of Indonesia (OJK)-licenced company, Investree specialises in supply chain finance, with a focus on client acquisition through an ecosystem of large and reputable payors.

One of the best cases of Investree is to distribute business loans for unbankable women in the Gramindo ecosystem. Gramindo is a savings and loan cooperative that focuses on super-micro financing in Indonesia.

Investree also has a presence in the Philippines.

According to the International Finance Corporation (IFC), SMEs lack easy and fast access to financial services to support business growth. IFC estimates that that 65 million firms, or 40 per cent of formal MSMEs in developing countries, have an unmet financing need of US$5.2 trillion every year, which is equivalent to 1.4 times the current level of the global MSME lending.

The pandemic also adds to the mix, generating greater hurdles in eliminating poverty and creating jobs to absorb the growing workforce.

“The credit provided by the investment partnership is also timely because we, through our digital solutions, continue to support SMEs in the country to survive, recover, and grow stronger in going through the difficult times caused by the pandemic,” said Investree co-founder and CEO Adrian Gunadi.

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Indonesia-based aquaculture tech company DELOS today announced that it has raised an undisclosed seed funding led by Arise, a collaborative fund from MDI Ventures and Finch Capital.

The funding round also included the participation of MDI Ventures; Number Capital; iSeed Asia; Irvan Kolonas of JAPFA, one of the largest shrimp feed and seed producers in the country; and Hendra Kwik of fintech firm PayFazz.

DELOS planned to use the new funding to reinforce and scale its shrimp production software which forecasts and recommends actions to improve farm profitability and productivity. It will also be used to develop value chain integrations and onboard new DELOS farm partners.

The company was founded by Guntur Mallarangeng, Bobby Indra Gunawan, and Alexander Farthing in 2021. It was founded with the background of the potential growth of Indonesia’s shrimp industry which was hampered by challenges such as low adoption of technology, sub-par management practices, and poor access to financing.

“These factors have created a bottleneck within the midstream of the value chain, and are throttling the output of downstream processors to an average of 40 to 60 per cent capacity,” the company wrote in a statement. “This productivity gap is what is keeping a US$2 billion industry from fulfilling its latent potential and becoming a US$4 billion industry. The value chain is ready for farm productivity to increase.”

Also Read: How South Korean startup Aqua Development is mimicking aquaculture for sustainability

DELOS aims to tackle these challenges with its full-stack farm management system, built to help increase the productive capacity and output of existing Indonesian shrimp farms by 50 to 150 per cent – creating value for farmers, increasing national export volumes, and growing Indonesia’s reputation as a world-leading aquaculture nation.

The startup has teamed up with Dewi Laut Aquaculture, a local aquaculture company, and Alune Aqua, a leading aquaculture fintech firm, to accelerate the development of in-house technologies.

“Classic challenges in the multi-layer value chain, low productivity, and lack of financing hinder the archipelago’s untapped shrimp industry that makes up 77 per cent out of the overall fishery output values. DELOS tech-enabled solution has managed to immerse the tech and the ops into local farmers’ culture and infrastructure while bridging them with the incumbent stakeholders. It leads to higher FCR (Feed Conversion Ratio), SR (Survival Rate), and Harvest, making it such a killer flywheel,” commented Aldi Adrian Hartanto, Partner of Arise.

DELOS is the latest Indonesian aquaculture startup that has raised external funding, apart from eFishery, Jala, and Aruna.

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Fintech, IT, startups, and venture capital hardly come to mind when one mentions Central Asia (CA). Comprising Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, the region is more often associated with its history – traders of the Silk Road, the defunct Soviet Union, and the peoples’ previously nomadic way of life.

If the association goes further, then modern-day tourism is usually where the conversation ends.

Why Central Asian businesses deserve to be on the radar

Beneath the quiet, though, insiders watch the region’s startups intently. Despite the low internet penetration rate overall, it is heartening to note that according to World Bank data, those of Kazakhstan and Uzbekistan average at around 80 per cent, which is higher than some European countries.

This has enabled the rise of young, ambitious businesses in the region. They are helmed by aggressively driven founders who lead highly competent teams comprising, but not limited to, IT architects and developers.

Because these startups lack adequate access to global venture capital compared to developed markets and developing Southeast Asian (SEA) economies, they are not valued nearly as high either.

Alas, there is a silver lining. Their high-quality tech-proficient human capital and lower valuation present a brilliant opportunity for investors seeking new horizons.

Increasingly, thanks to KASPI, Kazakhstani payment systems and e-commerce leader that was the first to have attained unicorn status in CA and serves eight million users as of mid-2020, CA venture capital and its resulting success stories are gaining interest and traction.

Also Read: Kazakhstan’s Clockster raises seed funding round, will expand to Southeast Asia

Synergies between Central Asian and Southeast Asian markets to capitalise on

CA startups are just as eager to scale abroad, and SEA has been a popular destination well able to help incubate business ideas and models due to structural and cultural similarities and familiarities.

Affluent economies and expanding enterprises in SEA also need new destinations for investment and exportation, and CA being a relatively under-explored frontier for either purpose means a new and exciting array of opportunities.

A sizeable number of digital trade services, e-commerce, and fintech startups growing in the region might be of great interest to SEA investors. Further, CA’s young and emerging middle class promises abundant commercial potential in but five years.

Because of these gaps and how each one bridges them for the other, the synergies between CA and SEA could mean favourable outcomes should businesses and investors choose to join hands. Already in pursuit of such profitable output is Singapore’s Quest Ventures.

In tandem with Kazakhstan’s state-owned QazTech Ventures, the two funds established an early-stage accelerator programme to foster a new generation of startup founders, propel them to succeed in their respective CA markets, and eventually scale to SEA.

Launched in 2020, the Kazakhstan Digital Accelerator (KDA) has already produced multiple batches of brilliant young companies. Among them are finalists already receiving investments.

Beyond KDA, Quest Ventures, and QazTech Ventures also witnessed a successful case that is Clockster, a Singapore-incorporated Kazakhstani startup that raised US$750,000 in a round led by Quest Ventures in 2020.

I lead-invested in their previous seed round. It has since successfully entered Indonesia and, in 2021, raised a game from 500 Global.

The partnership between Quest Ventures and QazTech Ventures is proving to be instrumental to advancing and growing the budding venture capital market in Central Asia, particularly Kazakhstan.

Also Read: These Kazakh startups are gearing up to dive into corporate innovation waters and beyond

A stellar example of a startup benefitting from synergies

As the techies in Kazakhstan celebrated KASPI’s IPO success in the London Stock Exchange (LSE) in late 2020, another Kazakhstani entity, a B2B inventory and logistics management and payment platform called Smart Satu, was striking a deal with British fund Sturgeon Capital.

It would become the first Kazakhstani project that Sturgeon Capital funds after the former had obtained US$6.8 million in private investment.

Aided by the fresh injection from an institutional fund, Smart Satu has continued to dedicate most of it to further R&D and expansion into countries dense with mom-and-pop businesses that would greatly benefit from improved infrastructure, cloud inventory, and integrated payment gateway, to name a few key features of Smart Satu.

To date, Smart Satu has seen a total of over 1,800,000 orders in Kazakhstan and Russia alone, and a turnover of over US$44.5 million since January 1, 2019. Smart Satu has served nearly 12,000 merchants in Kazakhstan and Russia in the same time frame and opened a company in Turkey.

It is in the process of setting up a shop in neighbouring Ukraine. In partnership with VISA, Smart Satu also became the world’s first B2B e-commerce payment gateway.

Closer to Asia, Smart Satu piqued the interest of VISA in Singapore, Dubai, Ukraine, and Turkey, and the two corporations are deep in discussion about partnerships with local banks, with the hope of providing 60-day interest-free corporate credit cards to small to medium merchants who decide to come on board.

For Europe, Smart Satu has an integrated system built-in in Kazakhstan that is ready for plug and play abroad. This system has been endorsed by METRO, a leading international player in wholesale trade.

METRO is now on board the system in Kazakhstan, enabling METRO to reach and transact with small mom-and-pop businesses with greater convenience, sans additional costs. METRO will efficiently employ this system wherever they have a presence, mainly Bulgaria, Germany, India, and Turkey. Beyond, Smart Satu is in the talks with potential partners in the US and UK to establish a presence there via pilot projects.

To investors and venture capital fund managers, I urge you to look to CA for some of the world’s most rapidly emerging tech startups armed with compelling solutions for the world. Propelled by state-funded nationwide digitalisation schemes such as the Digital Kazakhstan and Digital Uzbekistan 2030 strategy, they could be the bright, new horizons you seek.

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