2 local online shopping sites bag venture funding

THE e-commerce game is strong in Singapore. Homegrown platforms ezbuy (known formerly as 65daigou and which provides Taobao shopping services) and iFashion (a new roll-up play which targets online fashion sites) have raised US$20 million and S$1 million respectively in venture capital, amid a competitive landscape.

On Wednesday, ezbuy - an aggregator shopping site that connects Singapore customers directly to overseas online merchants from Taobao (China), the US and Taiwan - announced its Series B round led by Vision Knight Capital and joined by existing investors IDG Ventures and CGC Capital.

With the new money, the 2010-launched platform intends to introduce new source markets, global brands and product choices to its customers, and expand its regional team.

Co-founder Wendy Liu told The Business Times: "Back in 2010, to shop from overseas, customers needed to liaise with various online merchants and international logistics in different languages, and make payment in foreign currencies to have their purchases shipped to them. We consolidated this tedious, unfriendly shopping process into a hassle-free, seamless shopping platform."

There was "almost no e-commerce" in Singapore before 2010, Ms Liu added. Home delivery had cost S$15 on weekdays and S$30-40 on nights or weekends. "We believed that to boost online shopping, the delivery cost must be very affordable. Thus we broke the market rate - setting delivery cost at just S$5, and even creating other free collection methods for customers."

To date, ezbuy has reportedly served over 600,000 shoppers here, and grown to eight offices in South-east Asia.

On Monday, newly launched collaborative platform iFashion announced its first round of funding from Singapore-based Rimu Group. Backed by corporate venture builder Fatfish Internet Group, iFashion is a roll-up play that targets online fashion and lifestyle startups that are 3-5 years old and looking to grow.

"iFashion is not an e-commerce site," a spokeswoman noted. "The brands that we acquire will continue running as independent brands. By being part of the iFashion group, they can benefit from operations support, access to capital and new markets, economies of scale and mentorship."

Roll-up play (a company built primarily through the acquisition of smaller companies with common services) is not a new business concept, said iFashion; it's been done by the likes of Kraft, Asahi and Yello Mobile. Like those, iFashion will earn from revenue share; the brands it acquires will do an equity share swap.

The spokeswoman added: "This will work in South-east Asia because the fashion and lifestyle online industry here is very fragmented. Many brands are operated by small teams with limited resources. Most brand owners do not know how to scale their business beyond a certain size."

Meanwhile, the developments of iFashion and ezbuy come at a time when e-commerce platforms here are competing for market share and to stay afloat. The key reason venture capitalists would fund such companies in the early stage is to help them grow faster or penetrate bigger markets, said Samuel Lim, co-founder of luxury sales site Reebonz.

He told BT: "Profitability is secondary (at their time of funding)."

jaccheok@sph.com.sg


This article was first published on March 24, 2016.
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