E-shopping goes viral

The optimistic projections of local e-tailers make Singapore appear like a boom town for e-commerce. It has drawn many new e-stores to the local scene in the last three years.

Many claim they are selling millions of dollars worth of merchandise and doubling their sales every year.

Luxola, a Singapore-based online cosmetics retailer, said it hit its first $1 million in sales within two years of its April 2011 launch. But its most recent million-dollar revenue was achieved in under two months, said its founder and chief executive, Ms Alexis Horowitz- Burdick.

She said she expects its annual revenue to hit $100 million by 2016.

Sosoon, which launched its website last December, said it expects sales to hit $1 million a month within six months. It said that for the full year, it expects sales to reach $20 million from selling apparel, household appliances, consumer electronics and baby products.

Even e-marketplaces that represent individual sellers and retail entrepreneurs claim to be going great guns.

Singapore-based Qoo10, for one, said transaction volume on its site grew from under $100 million in 2012 to $150 million last year and it expects this to double to $300 million this year.

Online marketplace STClassifieds.sg has also seen significant growth in its ad listings, from 30,000 in 2009 to more than 180,000 last year.

Cheaper, better variety online

E-tailers say the reasons for their online success are better prices, greater variety and a fuss-free experience.

Customers agree.

"The variety online is just amazing," said Ms Kismet Heng, 42, a sales support manager. She buys clothes for her three children from e-marketplaces such as Qoo10.

Ms Shirley Kin, 33, a quality test specialist, said: "Diapers, milk powder and baby clothes are at least 20 per cent cheaper online and it is convenient to pay by credit card."

Housewife Sakura Siow, 40, said she has no time to run to the malls. "It is easier and, often, cheaper to shop online as I know what I want," she said.

Euromonitor International, a British-based market research firm, predicts that consumers here will spend more than $1 billion online this year on purchases such as clothes, consumer electronics and media products.

This will be 9 per cent more than the $960 million they spent last year, which, in turn, was 12 per cent up from $855 million in 2012.

Mr Kelvin Chan, Euromonitor International's head of research here, said greater access to the Internet via mobile devices is a key contributor to more online buying.

"Consumers are able to compare prices easily," he said.

Strong consumer confidence here has drawn more e-commerce players to target the local market.

Last September, Taobao Marketplace, owned by China's e-commerce giant Alibaba Group, opened its South-east Asia headquarters here to get a piece of the action.

It also created a local website and customer hotline for its 280,000 registered users here.

Two months ago, Japanese e-marketplace giant Rakuten launched its Singapore website to connect more individual buyers and sellers.

Mr Shingo Okamoto, head of e-commerce for Rakuten Singapore, cited Singapore's Web-savvy population and "sophisticated entrepreneurial culture" as key reasons for locating its South-east Asia headquarters here.

Rakuten has also partnered Toys 'R 'Us selling the latter's goods on its website. The toy store declined to be interviewed.

Like Toys 'R' Us, local brick-and-mortar store Planet Telecoms has also entered the e-commerce fray.

Last month, the mobile phone retailer launched its eplanetworld website to provide more brand owners with more space to showcase their full range of products - space which Planet Telecoms' physical retail stores may not have.

"E-stores are not constrained by shelf space," said Mr Raymond Lum, vice-president of business development at Planet Telecoms' parent company TeleChoice International.

Rent up, labour down

Another driver of the e-store boom here is rising rentals for retail space.

Mr Robert Van Lith, general manager of Sosoon's parent company Uitox, said it went online because "the viability of brick-and-mortar retail outlets is under pressure from rising rents and the labour crunch".

Rents for prime retail space in Orchard Road today exceed $35 per sq ft (psf).

In suburban regional centres, rents top $30 psf.

This is more than twice the 1998 average in the Orchard Road area. Rents in this area even plunged as low as $12.90 psf after the 1997 Asian financial meltdown.

The labour shortage is another factor. Said Euromonitor's Mr Chan: "Companies turned to Internet retailing to tackle the issue of difficulty in hiring service staff, as consumers are able to read up about the products online."

Digital Life takes a look at the hottest e-stores here.

Luxola

www.luxola.com

Launch date: April 2011

Offers: Beauty products

Cost of delivery: Free local shipping for orders above $10

As convenient and cheap as online shopping can be to the delight of customers, e-retailers may trip up on fulfilling orders - sometimes for reasons beyond their control, and often because delivery is outsourced.

So Luxola has acquired a fleet of 10 delivery cars and scooters to ensure that its customers get what they have bought and on time. "Our delivery service is a huge differentiator," said Luxola's founder and chief executive, Ms Alexis Horowitz-Burdick.

Such control allows the cosmetics and skincare e-tailer to offer same-day delivery here at a fraction of what Singapore Post and DHL charge.

The firm prides itself in going the extra mile for customers. For instance, its delivery man is supposed to text customers before arriving at a delivery location. The company also claims that it answers almost 90 per cent of e-mail queries in under an hour.

The online retailer also ships to Malaysia, Indonesia, Thailand, the Philippines, Brunei and the United Arab Emirates, but Singapore accounts for about half of its sales.

Ms Horowitz-Burdick said the company has expanded its range to 2,500 products. Many of them are hard to find and not distributed in Singapore, she said.

She said that customers' hot favourites include the Alpha-H skincare range from Australia and the Sigma Beauty make-up series from the US.

Luxola's business seems to be thriving since it was launched in April 2011.

Ms Horowitz-Burdick said Luxola took two years to sell its first million dollars' worth of products and claimed that its most recent million dollars was made in under two months.

To date, she said, it has raised about US$13 million (S$16.3 million) in funding from investors, including a Japanese-based venture capital firm Gree Ventures; Singapore-based venture capital firm WaveMaker Labs; and Singapore's National Research Foundation, a department within the Prime Minister's Office.

Luxola said it expects annual revenue to hit $100 million by 2016.

Qoo10

www.qoo10.sg

Launch date: June 2010

Offers: Fashion, beauty, IT and food products

Cost of delivery: Varies

When it comes to building its business, Qoo10 Singapore is banking on mobile devices to bring in the bucks.

Recently, it tied up with brick-and-mortar retailers to offer exclusive deals on its mobile app.

Through the Qoo10 app, Manhattan Fish Market is offering a set of two Fish 'n Chips and two Grilled Glory Dory for $15.96 (which works out to $3.99 a dish).

In the first three weeks, it sold 30,000 sets, Qoo10 said. The offer ends on Friday.

A new promotion lets customers exchange two Qoo10 loyalty stamps for an e-ticket that offers them free trial kits from The Face Shop.

They use the app to redeem the kits from the store's branches at VivoCity and Plaza Singapura. The company said when it last made a similar offer, 1,000 kits were given out within a day.

Qoo10 uses downloads of its app to attract potential customers, said its country manager for Singapore, Mr Cho Hyun Wook.

"Many Singaporeans use their smartphones when travelling to work and going home, which presents a huge opportunity for mobile commerce," he said.

Mr Cho said 40 per cent of its local traffic comes via the app and the rest from its website. It plans to boost mobile traffic to 60 per cent this year.

Qoo10 started here as a joint venture. Gmarket Korea's founder, Mr Ku Young Bae, and e-commerce giant eBay invested a combined US$20 million (S$25 million) to launch it in 2010. It now also operates in Malaysia, China, Hong Kong, Japan and Indonesia.

The site is popular for its timed sales and fashion products. The company said Singapore accounted for more than 40 per cent of its sales last year. Sales here hit $150 million last year and Qoo10 hopes to double the figure this year.

eplanetworld

www.eplanetworld.com

Launch date: Last month

Offers: Computing devices and peripherals

Cost of delivery: Free till end of this month and possibly beyond that

Black Friday bargains from United States online stores may have forced some local brick-and-mortar retailers to sit on the bench in the past.

But Singapore-based mobile handset store Planet Telecoms, which started operating more than a decade ago, now wants to emulate US e-tailer Amazon.

So last month, it launched its own e-store, eplanetworld, offering not just mobile handsets but a larger range of consumer electronic goods, including tablets, laptops, earphones and wireless routers.

It hopes to combine its retail savvy with a new online foray to reach out to local consumers who are increasingly Web savvy.

Today's buyers may do their browsing at brick-and-mortar shops, then go online to get the best deals, said Mr Raymond Lum, vice- president of business development at Planet Telecoms' Singapore parent, TeleChoice International, a systems integrator that is listed on the Singapore Exchange.

There are plans, he said, to exploit cross-channel promotions such as e-coupons for redemption at the physical stores. Planet Telecoms customers may also get online discounts, he said.

At present, eplanetworld offers more than 1,000 products from 60 brands, including Asus, Samsung, Nakamichi and Yamaha.

The e-store's value comes from having an unlimited virtual shelf space. Brand owners can showcase their full range of products, said Mr Lum.

The e-store can even list the products of new or lesser-known brand owners, he said, adding that this is now a luxury in physical stores because of high rents.

StreetDeal

www.streetdeal.sgLaunch date: October 2010

Offers: Discount coupons for beauty services; discounted fashion apparel, beauty products and electronics

Cost of delivery: Varies

When it comes to discounts here, shoppers no longer need to hunt for them. They just go to streetdeal.sg.

The site offers discount coupons for services such as beauty treatments at a fraction of the usual price. It also sells beauty, fashion and electronic products at a discount.

StreetDeal opened for business in October 2010 here and has since expanded into Malaysia, Thailand, Indonesia and the Philippines.

Singapore is still its biggest market. StreetDeal said buyers here accounted for 62 per cent of last year's $11 million in sales.

It said a growing proportion, about 70 per cent now, comes from product sales on its site, with the rest from the sale of discount coupons for brick-and-mortar retail partners.

StreetDeal is boosting its e-commerce retail, selling more products than it does discount coupons. Product sales are "much more scalable", said co-founder and chief executive Gregory Costamagna.

So the company is placing more emphasis on product fulfilment.

In the past, retailers who sold products through StreetDeal were left to deliver the purchases.

Five months ago, StreetDeal set up a warehouse and outsourced delivery to a company called Aramex.

"In the past, it used to take weeks or even months to get your product, but now, it takes only two days on average," said Mr Costamagna, who co-founded StreetDeal's holding company Asia Deal Group with French business partner Olivier Michel.

He said its mobile app and mobile website account for 20 per cent of its sales last year. StreetDeal is hoping to boost this to 50 per cent this year.

Sosoon

www.sosoon.com.sgLaunch date: Last month

Offers: Household appliances, baby and mother products, and beauty products

Cost of delivery: $5.50 per order; free for purchases of $40 or more

Delivery within 24 hours. This is what Sosoon promises customers. It achieves this about 99 per cent of the time, claims Mr Robert Van Lith, general manager of Uitox, the parent company of Sosoon.

If it cannot make good on this promise, it compensates shoppers with $10 shopping credits.

Sosoon supplements a regular fleet from courier service Ta-Q-Bin with its own vehicle. Its own drivers will deliver on weekends or when a delivery misses the regular Ta-Q-Bin delivery cycle.

"In e-commerce, you are able to buy a product online instantly, but you have to wait days to experience it physically," said Mr Van Lith.

"We are plugging that gap. The compact size of Singapore is also perfect for our unique proposition," he added.

He said he expects revenue this year to hit $20 million based on current sales. He claims that it is on track to exceed a million dollars a month in sales within six months.

"We are also seeing 10 to 20 vendors a week approach us to list their produces on our site and place inventory in our warehouse," he said.

Sosoon's founder, Taiwanese businessman Vincent Xie, was with one of Taiwan's largest shopping stores, PCHome Shopping, before quitting in 2012 after he set up its e-commerce business.

He then set up e-commerce businesses under Uitox in Taiwan, China and Singapore.

Sosoon's best-selling items are diapers, cosmetics and home electronics. It is "on track" to offer a full range of grocery products by the middle of this year.

Other shopping sites here

Rakuten
www.rakuten.com.sg
Launch date: January
Offers: Electronics, fashion and beauty products
Cost of delivery: Delivery is free for purchases of $40 or more. Charges vary for purchases under $40

Reebonz
www.reebonz.com.sg
Launch date: March 2009
Offers: Luxury products
Cost of delivery: Free local and international delivery

Zalora
www.zalora.sg
Launch date: Early 2012
Offers: Fashion apparel
Cost of delivery: Delivery is free for purchases of $40 or more. Charges vary for purchases under $40

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