Founded in 2014, iPrice started out as a site for consumers to get vouchers and coupons. Eventually, the company became an e-commerce aggregator for shoppers to compare prices as online shopping picked up pace in Southeast Asia.
The startup also publishes a quarterly report ranking popular e-commerce sites in the region. With its recent Series B close, iPrice said it strives to connect super apps to e-commerce merchants and supply shoppers with useful content beyond price comparisons.
KrASIA met up with iPrice CEO and co-founder David Chmelar at the company’s headquarters in Kuala Lumpur to hear about the firm’s plans for the future.
KrASIA (Kr): Congratulations on raising Series B funding. iPrice is known as an e-commerce aggregator in Southeast Asia, allowing consumers to compare prices from different marketplaces. With the new cash, you plan to develop and offer new features. What does that entail?
David Chmelar (DC): The classical notion of an e-commerce aggregator is price comparison. You have a platform which allows you to compare prices. But the world has changed and Southeast Asia is very specific in a sense that you cannot just look at prices, because the cheapest product may come from an unreliable seller, without known warranty, with some products even being smuggled into the country.
Consumers want to understand and be warned about these factors before making a purchase. That is one area we want to continue investing in and it’s a huge job. A marketplace puts together hundreds of thousands of sellers from all around the world nowadays, and it’s one big mess. It takes a lot of time to sort it out and clean it up.
The second journey we want to invest in is to power super apps with our e-commerce content for their audience, such as professional product reviews and in-depth information about sellers, so that we can bring content to wherever the users are. These super apps could be providing e-wallet, social media, ride-hailing, or financial services. We also want to connect the audience of these super apps with e-commerce merchants.
For example, we work with Home Credit to connect users who can use Home Credit loans to buy products in the e-commerce world. iPrice is similar to a plumber, making sure that the pipes are connected. There are multiple connections here and there within the e-commerce ecosystem—and in the middle is iPrice.
Kr: Where do you see the strongest competition for iPrice coming from?
DC: In terms of e-commerce aggregation, we are the undisputed leader across the region. We want to convince marketplaces such as Lazada and Shopee to spend more money on us and less money on Google and Facebook.
Luckily for us, we have seen a huge trend in this region where marketplaces such as Lazada and Shopee want to get away from Google and Facebook, because they have eventually become competitors. So a marketplace spends money on Google, but in order to advertise on its sophisticated algorithms, you have to be subjected to enormous data exposure, such as pricing and product selection. It’s good for us as our e-commerce partners can use iPrice to bring in as much volume as possible, and they are happy to take it.
We don’t see any competition in the area of e-commerce enablement. When you speak about super apps, it’s not just Grab or Gojek, it’s also a telecom or a bank in big markets with tens of millions of people. We want to provide e-commerce content to them.
Kr: Why did iPrice raise a Series B round given that the company’s main business unit is already profitable at 30% EBITDA?
DC: The opportunity for e-commerce in this region is very huge. When we did our off-site retreat in Sumatra, Indonesia, we could see that the amount of goods people have in the offline world in the rural areas is very limited. Once we can overcome problems related to logistics, payments, and transparency—getting the right product at the right price from the right seller with the right condition—I am absolutely confident that this will become enormous.
We discussed our options: turn the company profitable and reinvest the profits with the limitation that we may not capture a big chunk of the market, or raise another round of funding and do more. And the decision was to do more.
Kr: In countries such as Vietnam, many people don’t completely trust online shopping. The market is also fiercely competitive, as many smaller players have shut down recently. There are also rumors that the biggest local players, Tiki and Sendo, might merge. How does this landscape affect your business?
DC: Indonesia and Vietnam are the two countries where local champions are very successful. In Indonesia, you have Tokopedia, Bukalapak; and in Vietnam, you have Tiki and Sendo in the front row.
It’s actually easier for us in the Vietnam market. There’s a stronger need for an aggregator platform, because you have more places you need to visit in order to be sure that you get the best deal. We hear about merger rumors all the time. Shopee and Lazada have enormous access to money, especially with Lazada having Alibaba as their bank. It maybe very difficult for local players to compete against that mount of money.
From our perspective, we’re always excited if there is more competition—if a potential merger of a few local players would make that player stronger and able to sustain long-term competition against Lazada and Shopee.
In terms of the trust issue, we want to elevate the trust among consumers by sharing information related to customer satisfaction or the rate of return. That transparency should help with the trust issue over time.