In Southeast Asia, Thailand’s WhatsNew thinks it can best Rocket Internet at ecommerce
Kotagrosir.com – Thailand’s rising ecommerce conglomerate WhatsNew Group has today announced the acquisition of one of Thailand’s top online lifestyle stores, MOXY, for an undisclosed sum. It will be Ardent Capital-backed WhatsNew’s fifth ecommerce store, joining its other holding companies Petloft, Venbi, Sanoga, and Lafema.
The acquisition will essentially “add a leading lifestyle vertical and expand its [Whatsnew] product selection beyond commodities,” according to a statement. WhatsNew CEO Thai Bounthay Khammanyvong explains to Tech in Asia that the decision to acquire instead of building on its own was made in the interest of rapid growth.
In emerging markets like Southeast Asia, supplier relationships take a long time to build and getting the quality and amount of inventory MOXY had already built would have taken massive time and effort […] The rapid growth of ecommerce in Southeast Asia has resulted in both internal and external competitive forces, with international players such as Alibaba and Amazon looking to enter the market. Unlike in China where Alibaba and Jingdong still largely enjoy a closed market, ecommerce players here have to move fast to stay competitive. Acquisition is the fastest and most strategic way to grow.
He adds that female-centric ecommerce – a US$970 billion market, according to MOXY founder Shannon Kalayanamitr – is by far the hardest vertical to build. In his view, MOXY makes for an excellent foundation to start with.
“Female content, community, and commerce is the future, and with the MOXY acquisition we are adding a strong woman leader with a female centric brand that encompasses the 3C vision,” Khammanyvong elaborates. “We acquired MOXY because of its women DNA, and that is a clear marker in the sand for our direction moving forward – applying technology to solve women’s problems.”
Kalayanamitr will become the Group’s chief marketing officer, and all three MOXY founders will maintain a stake in the company as a show of confidence in WhatsNew’s model.
“Many brands don’t want to put their products into online marketplaces for fear of cheapening their brand image,” says Kalayanamitr. “We joined forces with WhatsNew because they shared our vision in the rise of the boutiques and lifestyle [and] our mission to build a multi-million dollar internet company that tailors to this fast growing and highly influential demographic [women].”
Not Quidsi, not Rocket Internet
WhatsNew’s model is similar to Quidsi in the US, which was acquired by Amazon back in 2010 for US$550 million. Quidsi owned three ecommerce verticals when it was bought over – it today owns 10 verticals – and the question is whether WhatsNew is heading down the same path.
Getting acquired or going public, however, isn’t Khammanyvong’s primary focus – WhatsNew’s long-term growth is his main objective:
Our goal is to build the female economy, to make life easier for women. If we remain number one in the categories we are in, it would be stupid to sell. The path to IPO makes the most sense. But if we cannot win our category and have to battle it out with other players, then a partnership with a bigger player to win the market would be the best strategic play. If you’re number one, why would you sell?
He points out that Quidsi was acquired because it could not compete against Amazon’s baby-focused vertical, Amazon Mom. “It’s different in Southeast Asia, though, because the market is not dominated by one big player yet,” Khammanyvong explains. “We are on track to be number one, so let’s see what happens.”
Indeed, WhatsNew’s holding companies have seen a fruitful 2014. From May to December last year, they saw a combined 250-percent growth in revenue, according to Khammanyvong. “Most of the growth came from our partnerships with sites like [Rakuten’s] Tarad and Line,” he says. Such partnerships are what differentiates the ecommerce group from others.
“Unlike Lazada, we are not a solo player. We are able to make strategic partnerships that gain our products and brands key visibility in consumer touchpoints all over digital, whether it be mobile, social, or other platforms.”
The CEO does sees Rocket Internet as a close comparison. “Rocket Internet takes an aggressive ecommerce play throughout the entire region across multiple verticals and categories, and that’s where WhatsNew is similar,” he says. “We are planning to raise additional capital to expand our categories, markets, and invest in technology to enhance the consumer experience in 2015.”
The difference between the two groups lie in how they spend their money. “We’re going after sustainable growth. If Rocket Internet did not burn capital as they did, they would not see the growth they have,” claims Khammanyvong.
Kalayanamitr sees WhatsNew as different from Lazada, Rocket Internet’s lifestyle shopping site, for its emphasis on media and the buyer experience.
“We want to be like them size-wise, but not take the same consumer experience. Our company is the life destination for people to go to throughout their whole life cycle. I like the fact that as our customers grow up, WhatsNew will be with them through those important stages of their lives.”
The team plans to expand into Indonesia and Philippines next, as well as grow the number of categories that they have. To do this, they will start looking for their series A round of investment in February – and I fully expect it to be a huge round.
Source by : https://www.techinasia.com/thailand-whatsnew-rocket-internet-ecommerce/