WearYouWant advises start-ups to add profitability to execution strategy

WearYouWant, Thailand’s leading online fashion and beauty marketplace is advising start-ups to have a clear strategy toward profitability as investors are now demanding it and that the e-commerce space in SE Asia is currently experiencing an exciting time.

At the Last Mile Fulfilment Asia (LMFAsia) Conference & Exhibition 2016 held in Singapore last month which brought together  retailers, e-commerce businesses, logistics and parcel industry professionals, CEO and Co-Founder of WearYouWant Martin Toft Sorensen said there was considerable discussion on how start-ups should focus beyond just team, product and market to become successful.

“Start-ups should have a clear path and strategy towards achieving profitability by scaling the business without forgetting the life time value of the customer versus cost per acquisition,” pointed out Sorensen.

“If e-commerce businesses simply follow a desire to climb user acquisition heights quickly without keeping an eye on the ROI, there is a higher risk of a greater fall. Penetration from online platforms can go far, wide and deep but the trajectory needs to be based on running a business that brings money for investors, shareholders and other stakeholders in the near future.”

Echoing this advice is Thailand’s e-commerce guru, Pawoot Pongvitayapanu, CEO and Founder at efrastructure inc. and Managing Director and Founder of TARAD.com, who also attended the business platform event. 

Sorensen advises that in addition to creating a viable business model that balances cost of acquiring customers with the ability to monetize the lifetime value of a customer, start-ups should also be creative in how to attract and keep customers. 

While many e-commerce sites are reporting high sales growth, the reality is that they may not be showing any profitability, said Sorensen. 

“In Thailand, we have yet to see any e-commerce companies proving they can scale and yet become profitable.

The recent acquisition of Rocket Internet’s fast growing, yet loss-making e-commerce site Lazada by Chinese e-commerce giant Alibaba, and Zalora (Thailand and Vietnam) by Central Group, has definitely created waves in the e-commerce industry”.

 

Sorensen says that while Lazada will pave the way for Alibaba to penetrate into SE Asia in a market leader position, it remains to be seen whether Zalora’s acquisition by a traditional offline retailer will kick start true omni-channel experiences in Thailand.

 

Sorensen adds that this is an exciting time particularly for e-commerce companies and start-ups in general, as well as for investors.