When Fiona Lau, a former retail investment analyst at Goldman Sachs, and Tony Wong, a software engineer and entrepreneur, met for the first time at a startup event in Hong Kong in 2013, they discussed the numerous problems small and mid-sized enterprises (SMEs) face when digitalizing their business.
Shortly later, the two decided to launch Shopline, a platform that provides software solutions for SMEs to create and manage online shops. The firm’s software allows merchants to quickly set up an online platform with a centralized inventory and order management system, thanks to a selection of drag-and-drop design tools. Shopline also assists companies in starting social e-commerce operations, as well as with advertising and marketing strategy design.
“SMEs constitute about 70–80% of the economy of Southeast Asia. They usually want to go online, but most of them do not have the necessary expertise and resources to do something really comprehensive online,” said Jeff Lim, formerly of Lazada and Zilingo, and now Shopline general manager for Singapore.
The startup was part of the tenth accelerator of Silicon Valley-based 500 Startups in 2014. Fast forward to 2021, the firm has grown to provide services to over 250,000 SMEs in seven markets across Asia, including China, Malaysia, and more recently, Vietnam, Thailand, and Singapore. “We considered international expansion from as early as 2014. After all, in our increasingly interconnected world, it only makes sense to think about cross-borders,” Fiona Lau, Shopline chief operating officer, told KrASIA.
“Our team members are spread across Asia. Having a diverse team helps us work a lot faster in every market. It is a lot easier when you speak the same language,” Lim added.
Besides SMEs, Shopline also works with large companies such as Fujitsu, Durex, and Superga.
As the COVID-19 pandemic has pushed merchants to adopt digital solutions, Shopline experienced fast growth in the last year. “We are looking at triple-digit growth year-on-year for both merchant count as well as gross merchandise value,” said Lim. “More importantly, this pandemic has also boosted digital financial services, as consumers and SMEs become more receptive towards online transactions,” he added.
Shopline charges clients a monthly subscription for its software as a service platform, while it also provides marketing and consulting services for additional fees. The firm is backed by Nasdaq-listed Chinese livestreaming platform Joyy Inc., which invested USD 20 million in January 2020. Alibaba Hong Kong Entrepreneurs Fund, a not-for-profit initiative of Alibaba Group, and CDIB Capital Group are also investors.
New business models spur e-commerce growth in the region
SMEs usually face “significant barriers related to access and use of digital technologies that prevent them from achieving their full potential,” a 2019 study by the Organization for Economic Cooperation and Development highlights.
The same report explains that the growth of e-commerce in Southeast Asia has been driven in part by the “emergence of new business models that allow SMEs to sell directly to consumers, typically on mobile-first platforms,” such as Lazada, Shopee, and Tokopedia.
Lim doesn’t see his company as a direct competitor to Lazada, as the two firms have different marketing positioning. “It is tough to build a brand on Lazada, as companies have to fight with millions of other products. That’s why many brands prefer to use their own ‘brand.com’ to slowly build that kind of mindshare and branding,” Lim said.
“Companies willing to create their own e-commerce platform can build better brand loyalty with their customers instead of just running sales,” he added. Shopline can assist SMEs in their business decisions by providing extensive data and analysis about customers’ behavior through the firm’s customer relationship management software, Lim explained.
Livestreaming and social e-commerce are two main areas where the company is redoubling efforts to support SMEs in their online venture. “We saw that the growth of social e-commerce by GMV in Southeast Asia was over 300% in 2020. We realized that about 40% of this total engagement in e-commerce happens through live commerce, basically livestreaming,” Lim said.
The company has recently established cooperation with Facebook to allow customers to sell their merchandise on Facebook Shops and Instagram Shopping. “As social commerce grows in popularity, with the pandemic pushing small and medium enterprises to not just go online, but to be multi-channels, the integration with Facebook will be one of our key focuses to better enable merchants to sell via social media,” Lau said.
Whether via B2C marketplaces like Lazada, or powered by B2B services like Shopline, a growing number of small businesses are selling online to respond to soaring demand amid the pandemic. In 2020, the e-commerce market in Southeast Asia reached a value of approximately USD 62 billion, while it is projected to hit USD 172 billion by 2025, per a joint report by Google, Temasek, and Bain & Co.
According to research by Bain & Co. and Facebook, shoppers in Southeast Asia will likely continue buying groceries and other essential items online even after the pandemic ends.
Shopline has also been working with local governments on different digital programs. The firm has recently partnered with the Singaporean government’s Digital Resilience Bonus initiative, which aims to support enterprises in the food and retail sectors by providing a bonus of up to SGD 10,000 (USD 7,560) to companies adopting digital solutions. SMEs using Shopline’s services could be eligible for the payout provided by the Singaporean authorities, the company announced in a recent press release.
Going forward, Shopline plans to continue its market expansion in Southeast Asia while boosting its social commerce offerings. “We’ve seen the high growth potential of Southeast Asia social commerce, with a strong resilience on mobile and social platforms in the region,” said Lau.
Lim also revealed that the company is working on establishing point-of-sale system retail solutions across the markets where it operates, as well as an in-house online payment service for digital shops.
When asked about new fundraising plans, Lau said the firm is open to new funding opportunities, but for now, the focus will remain on business development.
This article is part of KrASIA’s “Startup Stories” series, where KrASIA writers speak with founders of tech companies in South and Southeast Asia.