CollectCo makes e-commerce convenient again
By Anushia Kandasivam May 24, 2017
- 800 collection points and partnerships with 15,000 merchants
- Plans to expand further into region by next year
“IT IS inconvenient to shop online,” says founder and chief executive officer of Malaysian collection service startup CollectCo Services Sdn Bhd Dylan Wong.
CollectCo officially launched on March 22, introducing its network of 800 physical collection points in Malaysia that offer parcel delivery and collection services to e-commerce merchants and customers.
Wong was referring to the fact that consumers often experience failure of delivery – they are not home to receive parcels – forcing them to go to the courier outlet where they face limited time and long queues. Returning goods to merchants is an equal hassle.
For merchants, the big issue is ensuring parcels reach their customers reliably and on time; consumers often attribute failure in delivery, and inconvenience in returning parcels, to the merchant and not the logistics company, a negative perception that any merchant will want to avoid.
CollectCo enables customers to pick up or return parcels at 800 collection points across the country. This kind of flexible pickup and delivery option has, according to Wong, low maturity levels in Malaysia, allowing CollectCo to step into the gap.
“Customers must be given additional delivery options for their convenience. If service providers are not able to keep up with growing consumer demands they will eventually lose their competitive edge.
“We live in the age of the consumer where consumer-centric strategies are in every company’s corporate playbook for them to remain competitive in their respective industry. The power of the consumer must not be trifled with,” he says.
CollectCo is working with 15,000 merchants, including international marketplaces Lazada and Zalora and major local marketplaces Lelong.my, Hermo and Sally Fashion. Besides e-commerce platforms there are SMEs and mom-and-pop stores.
Collection points across Peninsular Malaysia include Mydin, Senheng, Caring Pharmacy, Fotokem, Happy Mart, CNI and more. Collection point partners receive a commission for the service; Wong declined to reveal how much.
Another incentive is that online traffic is driven to these offline stores, giving them the opportunity for cross-marketing, says CollectCo technology lead Lee Xin.
Collectco also works with logistics companies SnT, Line Clear and SkyNet, as well as electronic payment service providers ePay and iPay88.
The startup has designed clear checkpoints for all partners to ensure security and requires all collection points to have CCTV coverage and secure storage areas for parcels. Lee explains that there is a clear handover process for parcels and CollectCo ensures there is a clear chain of responsibility throughout the supply chain.
Training is provided to collection point staff; CollectCo provides training at the headquarters level so that the company is then able to train its employees efficiently. “That’s the good thing about dealing with retail chains. It’s a one-time cost that’s definitely worth it,” says Wong.
Wong and Lee say that getting the partners on board was initially a challenge but this was tempered by the fact that having collection points is something every e-commerce company will head to.
The number of partnerships and what has been achieved with them is quite impressive for a startup seven months after beginning operations and it must be noted that CollectCo company director David Wong, a seasoned tech entrepreneur, is also founder and CEO of logistics company SnT.
CollectCo is leveraging on these partnerships to give it a competitive edge. The startup’s major competition in this space are parcel lockers such as In Post, but Wong says that these players have not been able to keep up with the numbers while CollectCo is a lot more scalable and operates at lower costs – cost is a main concern for locker players because the lockers are not cheap to install.
Other points CollectCo has over the locker players are security and ease of use. According to Lee, while lockers may be easily vandalised and consumers may get confused about how to use them, the “human touch” CollectCo provides is better.
“One of our key advantages is that we provide end-to-end solutions. We have our own logistics arrangement, a strong network of collection points, are operationally more efficient and we have oversight throughout the whole supply chain,” says Lee.
When it comes to competing with established players overseas – CollectCo has long-term plans to expand into Asean – Wong says that there is still plenty of room in this space in the region so competition will only be healthy.
“Our first option is to look at establishing partnerships with them,” reveals Lee, explaining that working with already-established players may be the way forward, though CollectCo is willing to work things out for itself if partnerships do not materialise.
CollectCo secured CIP 500 funding from Cradle Fund in April – RM500,000 (US$ 116,293) – and its market traction, especially the number of partnerships already secured, was a major factor in sealing this deal.
“They already have 800 collection points and good partnerships established, which impressed us,” says Cradle Croup CEO Nazrin Hassan, who was at the launch.
“With e-commerce, you have to make it easy for the consumer. That’s what CollectCo has done – made it easy,” he continued, adding that the startup has a lot of growth potential.
CollectCo is now only in Peninsular Malaysia but will be activating another 50 – 100 collection points in East Malaysia by the end of the year. The startup plans to expand overseas by next year with Singapore being first on its list.
The startup is only using funding from Cradle and, according to Wong, this funding will last it for the next 12 months.
According to Wong, CollectCo is experiencing 70% month-on-month growth and the startup has put action plans in place to ensure this trend continues throughout the year. He declined to say when the startup is looking to reach profitability but emphasised that it is currently concentrating on growth. It plans to have 10,000 collection points across Asean by 2020.
Wong and Lee are both young entrepreneurs both in age and experience but Lee says that his corporate background – he was formerly with Sime Darby – has helped in planning and managing the startup.
“It feels good to have ownership over your work,” adds Wong. “To be honest, I don’t really see myself as an entrepreneur, just someone who is out there solving a problem.”