iPrice Group raises US$10mil Series B, aims to deepen its value proposition
By Tan Jee Yee March 2, 2020
- Aims to enable more partners in region, especially super apps
- Looking beyond price towards transparency, quality merchants and products
E-commerce aggregator platform iPrice Group has announced a US$10 million Series B investment led by ACA Investments Pte Ltd, a Japanese private equity fund based in Singapore, alongside participation by Daiwa PI Partners and returning investors LINE Ventures and Mirae Asset-Naver Asia Growth Fund.
Kickstarted in 2014, iPrice is among the most prominent players in the Southeast Asian e-commerce market, listing about 1.5 billion products from more than 1,500 merchant partners across Indonesia, Vietnam, Thailand, Philippines, Singapore, Malaysia and Hong Kong.
“The e-commerce industry in Southeast Asia is at its emerging stage and we see its huge potential. iPrice Group will play an important role, especially with its comprehensive coverage of markets in Southeast Asia. It’s the prime gateway to online shopping,” says ACA Investments Pte Ltd Chief Investment Officer Tomohiro Fujita.
In 2019, iPrice’s platform recorded five million transactions and garnered more than 20 million monthly visitors. Considering the rosy outlook of Southeast Asian e-commerce – which is predicted to be a US$150 billion GMV industry by 2025, according to Google and Temasek – the Kuala Lumpur-based startup is set to continue its upward trajectory.
Being the prime gateway is essentially what iPrice is aiming for. Or, at the very least, to be the “best online shopping companion”, notes iPrice Group cofounder and CEO David Chmelar (pic).
To do so, iPrice has expanded beyond price comparison, and provides customers more opportunities for product discovery. On top of giving a list of the most popular products, iPrice provides professionally produced reviews and in-depth information about sellers, not to mention curating the best bargains and coupons for users daily.
This new round of funding, Chmelar says, is to continue deepening the value proposition to their users. iPrice essentially serves not just to provide the best price, but also as a means to untangle the mess deriving from e-commerce platforms housing thousands of merchants and products.
“Pricing is important, but if you get a cheap product that is eventually part of a scam, or is broken, or is an unoriginal product with no warranty, you’ll be distressed,” Chmelar tells Digital News Asia.
“These are all information which are important for users to make the right decision. So we started being much more attentive to the rating of sellers, and showing how those without reputations are risky to buy from, and exposing high-rating sellers. We enrich the content with professional reviews of those products and so on. Helping users make the right call is the key area.”
The new round of funding is also to connect iPrice to the specificity of the market. Chmelar says that e-commerce in the region is increasingly going mobile – in fact, 96% of their traffic in Indonesia is on mobile.
This creates new challenges for e-commerce, especially in the way you access these platforms and services. On mobile, users face a plethora of apps when they access the Internet for specific services.
“To pursue our next journey, we need to be where the consumers are. We need to engage users directly on our platform, continue our strong presence on Google as it remains a vital starting point for many shoppers, and enable partners across the region, such as media platforms, social media apps and all the emerging super apps, to provide e-commerce content for their audience,” Chmelar explains.
Being an e-commerce enabler for super apps is a key aspect. Their partnership with Japan-based mobile messaging app LINE is a primary example. LINE users can access the app’s shopping tab and gains access to a marketplace, where listing is powered by iPrice. Basically, iPrice is enabling e-commerce content within LINE, providing their curated list of deals and products.
Standing with competition
Chmelar says that conversations with various regional super apps are ongoing and they’re certainly open to work with more super app partners.
[Ed: An earlier version made specific reference to a regional app which was incorrect. The error is regretted.]
Joining hands with super apps is one way iPrice stands out from a growing slate of competitors within the region, especially around affiliate marketing, which is iPrice’s business model. While affiliate marketing has taken a dip since its initial boost from platforms like Zalora and Lazada finding value in it, Chmelar observes that affiliate marketing has grown in the last few years and is changing for two main reasons.
Firstly, there are new, emerging players that have fully adopted towards a mobile-only world. These platforms, for example, are reaching customers and gaining traffic through channels like mobile games. “This is good for us – the more affiliate guys there are, the stronger the signal will be to merchants that it makes sense to invest in affiliate marketing and the technology behind it,” Chemelar notes.
Additionally, merchants and users alike are growing wary of the big tech companies dominating online marketing, namely Google and Facebook. “We see a clear trend from big marketplaces looking for alternatives,” he adds.
While the space will get increasingly crowded, iPrice has a way of standing out. Their wide reach across the Southeast Asian region is already a big advantage – similar players like PriceBook and PriceArea are more centred around their specific countries. “For our biggest partners (namely Shopee, Lazada, Zalora and international players like Farfetch), the regional presence is critical,” says Chmelar.
But it’s their ability to filter out quality merchants and products, as well as add layers of transparency to the online shopping experience is its key differentiator. Some price aggregators may focus primarily on the best prices and deals, but run the risk of offering problematic products. iPrice, on the other hand, aims to provide high-quality leads of their partners and claims to have “limited or non-existent” occurrences of fraud.
The question now is how much iPrice can help e-commerce merchants. Sure, affiliate marketing has its strengths – merchants basically get to market their products on high-traffic areas that drive sales.
But there are notable concerns, especially when it comes to branding. A merchant may have spent time building their online brand, but sometimes that brand is swallowed by the importance placed on price when it comes to aggregator services like iPrice.
iPrice is hoping that technology could help solve that. Running behind the scenes is sophisticated machine that looks through 80 to 90 parameters in evaluating and learning which product and merchant to feature on the top spots of iPrice’s list for buyers.
Since this takes into account user ratings and reviews, the attention has been shifted away from merely price and bargains, and into the quality of the seller as well.
With the funding, iPrice is also growing in size. Chmelar was speaking to Digital News Asia from a swanky new office in Bangsar South. The headcount of 200 employees went up by 15% today as he welcomed 30 new staff during the first day of their office opening.
Chmelar says that focusing their employees in one office helps enable cross-country, cross-function learning and collaboration at a faster pace. Yet the goal isn’t to pack the office to the brim.
“Yes, we’re expanding. We will need more people for sure. But what we’re targeting isn’t in having a lot of people – we’re targeting great business and value for users. If we need more people for that, we will ensure we do. But the goal is to stay a compact, functional team to bring that value,” he explains.
What’s next for iPrice whose main business unit, offering price comparison for electronics and health & beauty accounts for 50% of revenues, is operating at a 30% EBITDA (earnings before interest, taxes, depreciation, and amortization) margin. The challenge is to grow the other two parts of the business – product discovery for fashion and home & living; and coupons across all verticals – to match the same level of profitability within the next 2 to 3 years, the company notes.
With the e-commerce boom in Southeast Asia, the price, as they say, is right.