Shopping online with TrustedCompany
By Gabey Goh December 20, 2013
- New review platform for e-commerce sites aims to plug trust gap between buyers and sellers
- Eyes leadership position in South-East Asia as the go-to authority for e-commerce validation
IT took a spontaneous but ultimately futile effort to buy an ice-making machine online to spark a new entry in the region’s emergent e-commerce landscape.
In an interview with Digital News Asia (DNA), TrustedCompany cofounder and managing director Frederik Kraß shared that after moving to Kuala Lumpur from Germany earlier this year, he and his friends were looking for ways to help take the edge off Malaysia’s notorious heat.
“We went online looking for an ice-maker so we could make ice treats at home. We found one and bought it, but even after waiting a few weeks, it never arrived!” he said.
This bad experience, and the realisation that fellow online shoppers in the region had no real way of knowing whether an online merchant is dependable enough to bank on, led to the creation of TrustedCompany.
“You probably know the situation when you want to purchase any product or service online from a company you have no prior experience with. The price seems attractive and the company promises to deliver within a short time.
“However, you might ask yourself the following: 'Can I actually trust this company? Will they deliver in time? In general, how do I know this company is trustworthy and reliable?' In the end, you might decide to buy somewhere else or shop offline,” Kraß said.
This is where TrustedCompany comes into the picture, as an open review community for Asian consumers to identify trustworthy and reliable online companies to shop from and do business with.
Kraß, along with cofounders Philip Knuth and Adam Leow Kah Thong, created the platform on the belief that they were plugging a genuine gap and addressing possibly one of the last hurdles keeping South-East Asia's e-commerce industry from mass acceptance and usage.
It is a belief that has found backing in the form of funding via Asia Venture Group (AVG), a regional venture fund headed by Tim Marbach, which has also invested in financial comparison site iMoney. Kraß declined to share further details on the funding TrustedCompany is receiving from AVG.
Marbach, Kraß and Knuth had studied at the same university back in Germany, with Marbach successfully exiting from his startup KaufDa there before making Malaysia his new home.
Kraß shared that he and Knuth are first time founders and have different experiences in the international startup, corporate and consulting environment.
Malaysian Leow, on board as cofounder and chief technology officer, has several years of experience as a developer and freelancer, boasting a portfolio which spans South-East Asia.
Investing in a venture such as TrustedCompany was an easy choice for Marbach, who told DNA that its value proposition of validating online commerce sites forms a “missing piece” in South-East Asia's nascent e-commerce space -- a valuable space which consulting firm A.T. Kearney estimates to be worth US$6 billion to US$7 billion a year.
A recent study released by Rakuten of more than 2,000 online consumers across Malaysia, Indonesia, Thailand and Taiwan revealed that only 29% of Malaysian respondents were satisfied with goods they purchased online in the last 12 months.
Respondents ranked a secure website and transaction (83%) as the most important factor that influence an online shopping decision, followed by price (78%) and quality products with detailed photos (70%).
The study also found that 76% of Malaysian respondents never or rarely interact with merchants during the online shopping process and those who do, mainly preferred email over telephone or live chat.
Comparatively, in Indonesia, almost half (42%) the respondents frequently communicate with vendors, while Taiwan on the other hand showed the least interaction with only 10% communicating with merchants.
Commenting on the study’s findings, Rakuten Online Shopping’s president and chief executive officer Masaya Ueno said that consumers are “missing a beat here," spending time online and purchasing products without asking questions.
“Consumers should expect the same experience they enjoy from their favourite local shops, which means talking to the experts and building a sense of trust in the merchants and the products. The retailers that are smart will be able to offer this,” he added.
It is this need for trust or the demonstration of trustworthiness from online retailers which TrustedCompany hopes to play an active role in developing.
Kraß said the team sees good opportunities in emerging e-commerce markets such as Malaysia, Singapore, the Philippines, India, Indonesia, Vietnam and Hong Kong.
“Our vision is to fix this these markets, creating a value adding service for all participants, merchants and users. The unfortunate trust issue between consumers and companies offering online services is what we focus on,” he added.
According to Kraß, the current state of Asian e-commerce holds tremendous opportunities for solutions that tackle scam, fraud and other types of abuses, and the team strongly believes that creating trust through third-party verified reviews will help overcome these issues.
When asked about competitors, he noted that within its core markets in Asia, the team does not face any direct competition though internationally, similar services can of course be found.
However in his view, these competitors lack an important ability that the company has made as its unique value proposition – localisation.
“We believe that localising our service for each market is a must. Even though some similarities exist among these markets, they also differ from each other. While many international services do not seem to understand this, we are committed to creating a local product. TrustedCompany is based in Asia and built in Asia!” said Kraß.
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