WHAT do you do if you love retail and you love the Internet? You get into e-commerce, of course. And that’s exactly what Adrian Oh did after getting a computer science degree from a local university.
He signed up with OYL Manufacturing to undertake a special project set up by the founder of the company that aimed to sell a special air-conditioner online. The air conditioner was affordably priced and designed for customers to instal themselves without having to call up specialists.
“It was a flop,” recalls Oh before adding: “But it was a great experience for me!”
Undaunted, he stuck with his decision to be involved in e-commerce in some manner and went on to found webShaper (webshaper.com.my), an e-commerce platform designed to help brick-and-mortar retailers get online in a no-hassle and super easy way. “I wanted to prove that we can be equally good, if not better, at building software and tech products that can really add value to people’s lives,” he says.
Oh talks to Savvy about the local e-commerce scene and shares his views on what online-only retailers as well as hybrid ones (those with offline and online components) must do to succeed in this scene.
WASN’T IT ALREADY SOMEWHAT CROWDED WHEN YOU ENTERED THIS SPACE?
It was but isn’t that the case with coffee shops too? You don’t avoid going into business just because competitors exist. The fact is, for every software product, there are always alternatives including free ones. In our space, we have both local and international competitors but we believe in competing in a free market. We just have to out-innovate the rest and provide clients with great customer service.
IN THIS SPACE, DOES IT MAKE A DIFFERENCE WHETHER THE SERVICE PROVIDER IS LOCAL OR FOREIGN?
Yes, it matters. Local know-how and support is very crucial. Our strong partnerships with local payment partners, marketplace partners and logistic partners matter a
lot. We allow our customers to build their own branded stores and yet provide them with the functionality to sync their inventories to top online marketplaces like 11street, Lazada, and Lelong, etc. None of the foreign providers are offering this dual capability.
HOW MANY NOTABLE LOCAL COMPETITORS ARE THERE?
There are about five that we compete with at our level but as I said, it’s not about whether competitors exist or not. I’m not obsessed about who my competitors are, I’m obsessed with delivering value for my customers.
WHAT WOULD YOU SAY ARE YOUR THREE STRONGEST POINTS AS AN E-COMMERCE PLATFORM PROVIDER?
We take great pride in our designs. If you check our e-commerce store templates, which are mobile friendly, I’m confident you’ll find that our designs are absolutely world-class. We also have great localised features such as 1-click shipping for Poslaju and support for local payment gateways such as e-GHL, iPay88, MOLpay and Maybank2uPay.
We’re also the first e-commerce platform in Southeast Asia to invent an iPad Point-of-Sale system that synchronises your online and offline inventory. Basically when you sell one product at your physical store, the product inventory for your online store gets updated too.
WOULD YOU SAY E-COMMERCE HAS BY NOW BEEN COMMONLY ACCEPTED BY LOCAL CONSUMERS?
Yes and no. Yes in terms of buying behaviour which has slowly but surely shifted online. Lots of young people buy things online. But even so, e-commerce sales are estimated to be about five per cent of total retail sales. So, we have a long way to go.
What’s heartening is that even those who don’t buy online will definitely research the products online before going out to buy the items from a physical store. With such people, it’s just a matter of time before they become online buyers.
What holds some people back is still fear of online transactions. They think it’s just not safe. I guess this is normal when something is still relatively new. Think back to the time when ATM machines were first introduced in the early 1980s. It took a while for consumers to overcome the fear of using them. But rest assured, over time more and more consumers will buy products and services online. There won’t be a decline in uptake. You’ll only see faster and accelerated growth in this space.
FOR A VENDOR, WHAT ARE THE MAIN CONSIDERATIONS TO OPEN AN E-STORE?
To be honest, there are not many challenges to going online for physical retailers. There are lots of ready-made e-commerce solutions to choose from. But I do have one piece of advice to succeed online: Designate at least one full-time person to manage the e-commerce site, from updating product descriptions and answering queries to fulfilling orders. If you want to be serious about making e-commerce work, you have to dedicate resources to it. You can’t afford for the e-commerce store to be an afterthought.
WITH MEGA ONLINE MALLS LIKE LAZADA AND LELONG, WILL INDIVIDUAL E-STORES HAVE A CHANCE?
Of course, they can exist alongside the Big Boys. Did you know that one out of three vendors selling on eBay has their own branded webstores? Successful merchants care about building their own brands, owning their own customer database and being in full control of their own site. But at the same time, to help with sales, it makes sense to sell via other online marketplaces like Lazada and Lelong. I think every merchant should adopt an omni-channel strategy.
AS AN INDUSTRY OBSERVER, DO YOU THINK AMAZON WILL EVENTUALLY SET UP A MALAYSIAN VERSION?
Certainly. Some people think Amazon is already too late in the game but for such a behemoth, it’s probably never too late. Amazon Prime video has been available here since last December. And there’s also unverified news that Amazon will be stepping into the Southeast Asian market, starting in Singapore this year although that looks like it’s being delayed for some reason. Eventually they’ll come in. What they have already done is to make more products available to the Singaporean market and to offer free shipping there for purchases above US$125 (RM537). I suspect that’s what they’ll do too for Malaysia in due time.
YOUR SERVICE IS DESIGNED FOR SELLING PHYSICAL PRODUCTS. WHY NOT DIGITAL PRODUCTS LIKE E-BOOKS, MUSIC, VIDEO, ETC?
The market share of such digital products sold by local content publishers is really too small. However, if your services can be packaged into a product such as webShaper, it lets you upload it as “services” thus avoiding the shipping fee calculation. Services like travel packages and classes might work well if all you need is a platform to easily update your offering and take payment from your customers.
WHAT ARE THE MAIN CHALLENGES FOR A PHYSICAL RETAILER WITH AN ONLINE STORE?
1. Cross-selling Getting foot traffic to go online, and getting online traffic offline, that is getting online-only customers to start buying some things at the retail outlet.
2. Pricing Do you price the offline and online products differently or should they be the same? Customers usually expect the online stuff to be cheaper but could you then be cannibalising the offline store if you do that?
3. Cultural and organisational challenges How do you get your brick and mortar team to support your online store?
WHAT ARE THE MAIN CHALLENGES THAT AN ONLINE-ONLY STORE FACE?
1. Traffic How do you drive more targeted traffic to your site and improve the conversion rate, that is, getting visitors to actually buy stuff?
2. Repeat customers How do you get customers to come back and buy more stuff?
3. Staffing Hiring the right people with the knowledge to run your online store is difficult as such talents are in short supply in Malaysia.