Taiwan’s eCommerce market generated revenues of US$25 billion in 2013, according to data cited by the American Chamber of Commerce in Taipei. The island’s robust logistics network, bolstered by ubiquitous convenience stores, help make same-day delivery commonplace. Yip says that Hong Kong’s eCommerce industry lags behind that of Taiwan due to its smaller population and dense brick-and-mortar landscape.
Shopline eyes SE Asia rollout
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Shopline, the Hong Kong-based start-up that offers online tools for eCommerce vendors, is planning Southeast Asian expansion after closing a US$1.2 million seed funding round.
Investors include 500 Startups, Ardent Capital, SXE Ventures, East Ventures, and COENT Venture Partners.
Co-founder and CEO Raymond Yip says Shopline will use the funding to ramp up staffing and marketing. Once a team of three, the company has now increased its employee count to nine, and expects to get bigger as it targets expansion in Southeast Asia.
“We just started hiring a month or two ago. It’s definitely a big change for us, because the three of us were not getting paid for a time,” says Yip.
Shopline is an online platform that helps eCommerce merchants sell goods directly to consumers on standalone websites, as opposed to an eBay-esque marketplace. Similar to Shopify, the Ottowa-based startup that’s reportedly valued at over US$1 billion dollars, Shopline charges vendors a monthly subscription fee of HK$125 (about US$16) for access to a domain name and a customisable admin panel.
But whereas Shopify has entered Southeast Asia through a partnership with Singtel, Shopline launched specifically for Hong Kong and Taiwan – two markets its founders believe were under-served. To date, the company claims to have more than 15,000 merchants on its platform, 60 per cent of which have roots in Taiwan, while the rest are from Hong Kong. That’s a huge jump from the 4000 merchants it reported back in August.
Localisation has been a key factor driving Shopline’s growth. In Taiwan, for example, vendors have the option to ship goods directly to convenience stores – a standard practice for the island’s eCommerce industry.
“You have to understand the cultural part,” Shopline co-founder Fiona Lau told Tech in Asia. “If people want to pick up at 7-11, there’s different things you need to fill in – the store name, store code, and another type of store code. If you didn’t know that this was such a big deal and just put the address of the store, it wouldn’t work.”
“You have to understand the cultural part,”
“[In Hong Kong] when people think of eCommerce, they think of Taobao to buy things from the mainland because it’s cheap. But when it comes to buying normal things like a shirt, you wouldn’t really go to Zara.com you’d just go to Zara because it’s across the street. Whereas in Taiwan, geographically it’s bigger, so there’s more of a need, and it’s a little more mature.”
Shopline’s latest round stands out in particular due to Ardent Capital’s participation. The Bangkok-based venture capital firm invests almost exclusively in Southeast Asia eCommerce plays. Its management team also directly oversees aCommerce, a portfolio company that provides back-end logistics and services for eCommerce companies across the region.
Back in November, aCommerce’s Paul Srivokal told Tech in Asia that the store-in-a-box model might not be suited to Southeast Asia, as eCommerce remains in the early stages and merchants will hesitate to pay for traffic. That might make Ardent bet on Shopline might therefore seem counterintuitive. But Yip says that his team’s proven record in Hong Kong in Taiwan shows that Shopline can execute once merchant preferences evolve.
“There’s no question in my mind that eCommerce is going to mature in this direction,” says Yip. “When this does happen, we want to be at the forefront of it.
“We told them we’re going to go to Southeast Asia anyway, so we’d rather do it with someone who has the resources to help us. They fully agreed and they supported us.”
In addition to Shopify, Shopline faces a handful of other Asian competitors. Taiwan’s 91mai, which is founded by former team behind Yahoo Taiwan’s eCommerce channel, offers a similar product for eCommerce vendors, but through native apps rather than mobile websites. Uitox, another Taiwan company founded by an eCommerce veteran, lets vendors build websites free of charge and monetises through commissions on purchases and value-added services.
In Japan, Base is seen as the market leader for the vertical with more than 150,000 shops on its platform. All companies have ambitions to expand beyond their domestic markets.
Questions & Answers
Q.What is Shopline's business model and how does it earn revenue?
What is Shopline's business model and how does it earn revenue?
A.
Shopline offers online tools that help eCommerce merchants sell directly to consumers via standalone websites. The company generates revenue by charging vendors a monthly subscription fee of HK$125 (about US$16) for access to a domain name and a customisable admin panel.
Q.How has Shopline's merchant base grown recently?
How has Shopline's merchant base grown recently?
A.
The company claims to have over 15,000 merchants on its platform, which is a significant increase from the 4,000 merchants reported in August. Sixty per cent of these merchants are based in Taiwan, with the remainder from Hong Kong.
Q.Why did Ardent Capital's investment in Shopline seem counterintuitive at first?
Why did Ardent Capital's investment in Shopline seem counterintuitive at first?
A.
Ardent Capital, a venture capital firm, primarily invests in Southeast Asian eCommerce. One of their portfolio companies suggested that the 'store-in-a-box' model might not suit the region as merchants might be reluctant to pay for traffic in early stages of eCommerce development.
Q.What factors contribute to Taiwan's more developed eCommerce market compared to Hong Kong?
What factors contribute to Taiwan's more developed eCommerce market compared to Hong Kong?
A.
Taiwan's eCommerce market is more mature due to its larger geographical size and robust logistics network, including ubiquitous convenience stores for deliveries. Hong Kong's smaller population and dense brick-and-mortar retail mean people tend to shop in physical stores or use platforms like Taobao.
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