E-commerce has been one of the brightest spots for Southeast Asian startup economy, with hot money has been flowing to players such as Tokopedia, Lazada, and Shopee.
In the interim, traditional social networks – the likes of Instagram and WhatsApp – are not to be left out in the new tide. They have also started to double up as platforms where users can buy and sell. This convergence, however, is really nothing new.
Taking the case of China, for example, Alibaba has been persistently adding on social media-like features as it seeks to increase user stickiness, hoping to boost revenue per user; Tencent is also investing into the e-commerce space, eyeing greater monetisation opportunities.
The benefits are clear. On one hand, social media giants struggle in their search for monetisation avenues. Ads do pay but they also irritate the users. E-commerce players, on the other hand, find themselves unable to retain their customers. Together, e-commerce and social media can work together to explore greater synergies and opportunities.
This fast-growing social commerce boom in Southeast Asia has led to some doubters; worry has set in whether this can continue. A recent PayPal report says otherwise. Southeast Asia’s massive social commerce growth is showing no signs of stopping.
Against this backdrop, KrASIA sat down with Juliette Gimenez, the founder of the Hong Kong-based Goxip to talk about the journey and growth mojo for the company. Incepted in 2016, Goxip sees itself as an enabler to transform fashion social media platforms by providing discovery and payments solutions to complete the entire online shopping process for this niche market. Combining its network with a large collection of fashion and beauty products retailers with image recognition technologies, Goxip aspires to become the place to be where consumers can enjoy a seamless luxury shopping experience with a peace of mind.
Acutely aware of the perils of intense competition, Gimenez has chosen the fashion vertical to launch her startup. She believes that fashion and woman usually would go hand-in-hand. Being a woman herself, she is able to understand the various nuances and can constantly go one step ahead to improve the user experience, allowing online fashion shopping to be an enjoyable affair. More than that, luxury goods tend to sell at higher margins which goes against the grain of other competitors out there who are constantly seeking to undercut in prices to gain market share.
The Unique Fashion Vertical
The fashion vertical is rather complex. There is no real need and there have to be innovative ways to spike up the number of purchases. Constantly being able to engage the high-end customers are also more challenging than other products. Image recognition technologies have been employed by Goxip to allow high-end consumers to imagine how they will look in those products, spurring greater conversion.
In addition to using artificial intelligence to generate the ‘right’ content to keep users hooked, Goxip has identified a market gap – the key opinion leaders (KOL). Previously when it comes to global brands, KOLs remain uncertain on the number of sales they generate as the figures are kept with the brands. On Goxip’s platform, that figure becomes transparent and KOLs can be assured of getting paid according to the number of purchases made via their influence.
Goxip is careful to only onboard top tier KOLs, adding another form of monetization engine that leverages of these leaders’ influence and appeal. People tend to like mimic or usually believe the words of influencers and might just be more inclined to make the next fashion purchase that is tagged by a KOL.
On another note, through learning from big-time players such as Lazada and Shopee, she is well aware of the importance of having sufficient funding if the plan is to burn money. Taking full control of the whole e-commerce cycle from inventories to deliveries, in addition to offering perks like free shipping require huge sources of funding – is not always an available option for new startups.
Thus, opting to be a simple marketplace, essentially running an e-commerce platform without stocks on hand, Goxip can free up more capital to do the more needful marketing that’s highly necessary to boost user numbers in the luxury vertical.
Yet, one pertinent problem could remain and that is the issue of counterfeit goods on e-commerce platforms. As a simple marketplace without its own storage like JD.com, Gimenez circumvents the ‘lack of control’ by ensuring that only authenticated merchants – either legitimate distributors with licenses or designers and partnering with big merchants and conglomerates.
Goxip’s Expansion Strategy for the region
While Goxip operates in Hong Kong and Thailand, the bigger plan is the entire Southeast Asia region. As a realist, however, Gimenez’s core belief behind her strategy is always to begin by targeting low hanging fruits. Only after it works in one additional market, she will then see how to replicate similar plans in other markets.
One illustration can be seen in its choice to expand to Thailand first. To Gimenez, Hong Kong’s market is similar to Singapore while Thailand is more like a combination of Indonesia and Malaysia. If sufficient traction is reached and the plan worked, the next move will then be to launch into other SEA markets.
On a separate note, sustainable expansions have to balance with cost control and keeping costs low is another factor close to Gimenez’s heart. This is highly relevant as Goxip is now in Thailand, a highly competitive market.
Nevertheless, life in the startup world is never certain, Gimenez said she’s always open to new ideas. She sees the value of house Goxip’s own logistics, as having a local storage presence will speed up deliveries that will help to boost service quality. However, just like Amazon, there is no real rush now, but that could just be the next step if Goxip grows large enough.
Editor: Ben Jiang
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