There are no grand buildings with marbled floors and piped-in music to welcome you, none of that flattering lighting that makes anything you try on in the fitting room look good, no sampling bars, and certainly not a hint of aromatherapy in the air to manipulate you into parting with your money. Yet the global e-commerce space is expected to rake in a whopping US$1.77 trillion in sales by the end of 2015, and some US$680 billion of that will come from Asia-Pacific, making the region the biggest e-commerce market.

Not only has online shopping become a recreational activity much like catching a movie, greater security in online payments, quicker product delivery, busier consumer lifestyles, rapidly expanding online and mobile user bases in emerging countries and a host of other factors have helped e-commerce to take off in a big way. Chief among them is perhaps the rapid advances in mobile phone technology and the advent of m-commerce or mobile commerce, which virtually keeps our favourite stores in our pockets and purses all the time. In terms of customer relationships, it’s not going to get any cosier than this.

Here in Singapore, a number of e-commerce businesses have found comfortable spots in the virtual shopping sphere, but just as any entrepreneur in a traditional business will tell you, there is no such thing as overnight success. As e-commerce is still a new idea and with digital technology evolving so quickly, there are risks involved and sacrifices have to be made.

The people behind four e-commerce businesses based in Singapore share with Melissa Gail Sing how they turned their virtual business idea into a reality and what it will take to stay ahead in the digital shopping realm.

ROGER E. EGAN III
CEO, RedMart
Prior to co-founding online grocery service RedMart, Roger, who has a background in investment banking co-founded Integro Insurance Brokers. RedMart, which was started in Singapore in 2011, now has over 350 employees and an office space at Jalan Terusan.

What was the inspiration behind your e-commerce business?
When Vikram Rupani (RedMart co-founder and COO) and myself were students at INSEAD in Singapore, we were surprised by the relative lack of good online grocery offerings here.  So we decided to build one ourselves! People told us that it would never work, that Singaporeans would not use the service, suppliers would not be interested in working with us and so on, but after doing enough research we were convinced otherwise, and so far we seem to be right!

What were the start-up costs and what were some of the tools and knowledge you needed to start the business?
We needed several hundred thousands of dollars of seed capital to get the business up and running. However, since then we’ve raised over US$23 million more. Both Vikram and I had strong entrepreneurial experience before we started RedMart, but we quickly had to learn the “sole proprietor” mentality of doing whatever it takes, including doing most of the initial order deliveries ourselves.

What were some of the challenges you faced initially?
The front-end website part was fairly straightforward as there are plenty of “e-commerce in a box” services. However, finding suppliers, finding a warehouse, doing deliveries, customer support and accounting was a lot of work, and things which we faced for the first time.

What are some of the key milestones for the business?
We have been growing around 15% month-to-month for over two years in a row. And this year, we will be launching our first overseas location, which we will announce in a few months’ time.

Our priority is always to give our customers great value and experience. So, moving forward, we will be increasing our product range substantially, particularly in fresh food, and focusing most of our development efforts towards improving service levels and customer support. We’ll also be expanding to other markets, and other categories of products.

What are the pros and cons of running an e-commerce business compared to a traditional business?
The pros are that e-commerce businesses are extremely fast and agile, and so you can adapt to market or business conditions a lot faster.  And they usually can offer consumers better value − the combination of price, selection and convenience.

The cons are that e-commerce is still in its nascent years, so you are going after a much smaller market than your traditional peers. However the trend is only in one direction and will continue to accelerate, especially as “Generation Z” comes into their primary shopping years.

What will it take to sustain the business as more competitors enter the market from all over the globe?
Ultimately, having a superior service offering.  But our approach is not to look at current or prospective competitors and think about how we can be better; rather we innovate to delight our customers.  

What is the one thing that really helped e-commerce take off?
There are many potential answers but certainly one of those things was the launch of Amazon in 1995. They started a product that is one of the most obvious to sell online − books − and as shoppers got comfortable with this, they moved into more and more categories, to the point where now many shoppers are quite comfortable buying just about anything online, from fish to truffles, works of art, car, houses, you name it!

How has the e-commerce industry evolved since you started your business?
In the little over three years now, mobile has become a much more important aspect of e-commerce.  Over 40% of our orders are completed via our mobile applications, and many more orders include some mobile touchpoint, such as adding an item to the cart.  We launched our iOS application more than a year after we launched, and Android six months after that, but any e-commerce service launching now would very likely need to launch their apps simultaneously with the desktop site, if not before.

The great thing about the Singapore and broader Southeast Asia e-commerce scene is that there are now a good number of fairly successful companies, and a lot of emerging companies that are really innovating. There are also numerous networking opportunities, so we really share as much information and advice as we can. In a sense, we are all in this together, even if we may be competing in some cases.

What’s your top advice for others contemplating an e-commerce venture?
First, think hard about the business you want to be in. There is as much variety in e-commerce as there is in traditional commerce, so it is less about the idea of e-commerce itself more about the fact that you happen to be “selling product X to market Y” online.  So make sure the X and Y are something you are passionate about and experienced with.

And second, as with any business start-up, there will be some highs, but also many, many lows.  So as we say at RedMart, “Never, never, never give up!” ~Winston Churchill

WILLY THOMAS
Director, FlowerAdvisor.com.sg
Indonesian entrepreneur Willy founded FlowerAdvisor in Singapore in 2007. The company delivers fresh flowers and gifts in more than 100 countries with same and next day delivery. It has offices in Singapore and Indonesia and annual revenues surpassing US$ 1 million.

What was the inspiration for your e-commerce business?
I wanted to bridge the distance for people to send flowers or gifts to their loved ones wherever they are, conveniently and affordably.

What were some of the challenges you faced initially?
Unlike traditional businesses, e-commerce businesses are not constrained by the geographical location of the business ,however, the challenge is in how you market your product to the mass market. And to market your product to the mass market takes a very high capital investment.

As we are building a global business, the challenges that we initially faced were the different cultures in the various countries we deliver to. We had to learn about the festivals in each country when flowers and gifts are traditionally sent and market accordingly. Because you are marketing your product globally, there is no one fixed formula. You have to adapt your strategy to different markets, so there’s a lot of trial and error involved.

What are some of the key milestones for the business?
In 2009, we established a base in Jakarta and we made our first million in 2011. We currently we have approximately 100,000 visitors monthly globally, and we process around 30,000 orders globally on a yearly basis.

We plan to set up local offices regionally in Southeast Asia soon in order to gain more market share locally. Our vision is to become the leading flowers and gifts e-commerce in Southeast Asia.

What are the pros and cons of running an e-commerce business compared to a traditional business?
The pros are that it’s convenient ie. people can buy anything anywhere with just a click and the item will be delivered to their doorstep; there is a low initial start-up cost compared to traditional businesses; and it is very scalable and knows no geographical boundaries unlike traditional businesses, which typically serve only their surrounding areas.

The cons are a lack of shopper trust because the customer does not interact physically with the shop as they would when dealing with traditional businesses where they can see the products directly; lack of brand loyalty due to the absence of personal relationships between the customer and the shop owner/staff as with traditional businesses; and fierce competition because of the low cost barrier to entry for e-commerce start-ups.

Moving ahead, e-commerce businesses need to provide the best product with the best level of services and prices. The only thing that differentiates one online business from another is the level of service. Online businesses must also constantly update themselves with the latest technology and trends so they will retain their competitive edge. The internet never sleeps so in order to keep up with the fast-changing environment, we have to keep learning and keep reinventing.

What is the one thing that really helped e-commerce take off?
Lifestyle changes and the infrastructure.

In this digital age, the first thing people see when they wake up is their phone or another electronic gadget and it is also the last thing that they see before they sleep. Apart from this culture change, people now lead busier lifestyles and value convenience, which e-commerce provides. There’s also competitive pricing. So, why go to a traditional store if you can get something cheaper and convenient wherever you are?

Meanwhile, significant improvements in the cost of internet access and the speed of internet connection have also helped.

What’s your top advice for others contemplating an e-commerce venture?
E-commerce is about building long-term value for the customer, and it’s a long-term investment. If you want to get rich quickly, e-commerce may not be suitable for you.

When building an e-commerce business, your goal should be to build something useful that can help the way people live. Only then will you succeed. Chase the vision, not the money!

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