Despite economic doldrums, 11street bullish on Malaysia
By Goh Thean Eu February 1, 2016
- End-2015 had more than 13K sellers on board, had targeted 11K
- Hopes to become preferred e-shopping platform by developing sellers
ALTHOUGH Malaysian consumers are likely to experience a decrease in spending power this year, online marketplace 11street remains bullish with regards to the e-commerce industry’s prospects and its own business opportunities in the country.
“In Malaysia, the commerce market in general will see a decrease in spending power. However, we expect that e-commerce will continue to see growth,” said 11street Malaysia chief executive officer Hoseok Kim (pic above).
“This year, we foresee up to 33% growth for the e-commerce market, with the key drivers being mobility, better Internet [connectivity] and logistics, and security,” he told Digital News Asia (DNA) via email.
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According to Kim, the weakening of the ringgit will also play a role in the growth of e-commerce, as consumers will begin to slowly move towards online shopping as an alternative for cheaper and more convenient purchases.
The 11street online marketplace in Malaysia is hosted by Celcom Planet, a joint-venture company between Celcom Axiata Bhd and South Korea’s SK Planet, and was launched early last year.
Today, the portal boasts an inventory of more than five million product listings, and has become one of the top 30 websites in Malaysia, claimed Kim, citing data from Alexa.
“In 2015, 11street successfully brought over 13,000 sellers on board, which was 18% more than our initial target of 11,000 sellers,” he said.
“This has made it possible for us to serve local shoppers well, with a wide variety of products and services provided by our sellers,” he added.
Kim said he expects 11street’s seller base to continue to climb this year.
“We aim to grow our number of sellers to 20,000 by year-end.
“We are also looking to place more importance in bringing existing local online sellers to the next level.
“While the number of sellers continue to grow, it is more crucial that we further educate and support the current sellers to sustain their businesses online,” he declared.
“We also aim to significantly increase our investment in seller training and development programmes,” he added, without giving specific figures.
Need to stand out
The e-commerce space, including online marketplaces, is getting increasingly crowded in Malaysia, with both local and international players vying for a piece of the pie. The need for differentiation has never been more stark.
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According to Kim, 11street is aiming to differentiate itself from both the buyer and the seller perspective.
For buyers, for example, it offers “lowest price guaranteed deals” under its ‘Shocking Deals’ section.
“This is possibly the first of its kind deal in the online retail market, where customers will be refunded with a price difference of 110% if the purchased product under this section is offered at a lower price on other online shopping websites,” he claimed.
“Also, since 11street started in South Korea, we bring to local consumers the latest, most popular and fashionable products from the overseas market, especially South Korea,” he added.
Like many other online marketplaces, 11street also protects its buyers by releasing payments to the seller only when customers receive their items in good condition.
For sellers, last March, 11street built its ‘Seller Zone, an education centre and support facility located at its office in KL Sentral in Kuala Lumpur, that provides free e-commerce business coaching, training and development programmes.
“The Seller Zone is also equipped with professional photography studios, training centres, and a simple yet stylish public lounge for networking, relaxation and refreshment,” said Kim.
The preferred marketplace
There already several big players in Malaysia’s e-commerce scene, from international giants like Germany’s Rocket Internet-owned Lazada to Japan’s Rakuten.
The homegrown players include newcomers like GemFive and big players like Go Shop, a joint-venture between pay-TV giant Astro Malaysia Holdings Bhd and South Korea’s GS Home Shopping Inc.
The entry of so many players is not surprising, given that the online retail spend is a very small proportion of the total retail spend in Malaysia, as it is with many of its South-East Asian neighbours too.
A BCG Analysis in September 2014 revealed that less than 5% of total retail spend in South-East Asia came from online. Malaysia’s online retail spend only represented about 0.5% of its total retail spend.
But Malaysia’s online portion is expected to grow to 5% by 2020, and 7.9% by 2025.
Add to the mix other trends such as its growing smartphone and broadband penetration rates, and growing middle-income group, it is only a matter of time before the Malaysian e-commerce space explodes.
For his part, Kim is aiming to position 11street as the preferred online shopping platform over the long-term.
To do that, it would need to further strengthen its seller base, not just in terms of quantity, but also in terms of quality, he declared.
“In 2016, we plan to offer more advanced e-commerce training courses to equip our existing online sellers,” he said.
“These courses will guide and enhance online businesses, with experts from 11street sharing their experience from grooming mature sellers in advanced e-commerce markets such as South Korea,” he added.
11street will also roll out a remote seller’s community programme this year, starting with sellers based in Penang, Johor and Ipoh.
The company’s outlook for the next five to 10 years is based on the fact that it believes that the Malaysian e-commerce market will grow by more than 700%.
“For now, it is still at an early stage and there is plenty of room for development,” said Kim.
“This is becoming evident as more local businesses utilise an omni-channel strategy to maintain consumer relationships, and to drive more sales significantly,” he added.
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