Retaily wants to help startups take those ‘on the edge’ customers and convert them into sales
When it comes to e-commerce in Southeast Asia, Indonesia makes investors drool with its large population, the Philippines and Vietnam have rapidly growing macro-economic trends and the industry is leading internet growth in Thailand.
And yet, according to a recent report from Research and Markets, Malaysia may be leading the pack. The global market research firm predicted the industry will make up 5 per cent of the nation’s total retail industry by 2025 (a growth rate that leads the region).
There is a lot to like — from the creation of the Digital Free Trade Zone, an ever-growing interest from Alibaba, and successful big-time companies like Lazada and 11street — Malaysia’s e-commerce industry has a lot going on.
And yet, according to Charles Tang, the Founder and CEO of Penang’s Retaily, there is no middle class.
“[It is] top-heavy in the sense that all the big guys — like Lazada, Zalora, 11street — when people want to buy something, they go there….On the lower end, you get a lot of Facebook stores. A lot of them just do a few hundred dollars, a thousand dollars a month. But there are a lot of them,” he said in an interview with e27.
Tang hopes Retaily will be positioned as a market leader to facilitate the success if/when Malaysia’s e-commerce middle-class begins to take off.
The startup is a machine-learning re-targetting company that helps SMEs re-engage customers, help push visits into sales and build a long-term consumer base.
Retaily uses big data analytics, push notifications and other marketing tactics to get people to click that ‘buy’ button.
According to Tang, the average conversion range for an e-commerce store is 0.5 to 4 per cent. So for every 100 people that enter the site, they can expect about one-half to four people to make a purchase.
Tang says Retaily can help to grow that number by 30 to 40 per cent.
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The SaaS service charges a monthly fee according to the number of users they have and Tang says Retaily takes about an hour for a company to set up.
Retaily targets the middle-class of e-commerce because the Facebook re-sellers are rarely growing a ‘startup’ but rather augmenting their day-job with an additional revenue stream. The big boys like 11street can afford to build their own internal data analytics tools.
Retaily fits right in the middle. Targeting more niche e-commerce startups that need analytics but don’t want to spend the big bucks to build or outsourced expensive analytics tools.
Big Data made easy
A lot of small business owners are fairly aware of how analytics can help them increase conversions. Yet, the step from awareness to action is difficult because finding valuable information in a sea of data is time consuming and for many small business owners, frankly, a waste of time.
“We like to say Retaily is Big Data made easy. Because a lot of people, when you hear about Big Data, they get all kinds of possibilities. But you know, the reality is, to get it to work normally is pretty difficult For you to make use of the data, there are a lot of things that need to happen in the background,” said Tang.
One of the key ways Retaily leverages data is through a heat map that helps push potential sales into conversions. The startup tracks user actions on a website — how long they dwell, their return-rate and actions they take.
This is then curated into a heat map to let e-commerce firms, via Retaily, take actions on said customers. On a scale from one to ten, the system is designed to ignore the ones, twos, nines and tens (Basically the guaranteed sales and the lost-causes).
The heat score then determines what kind of messages are shown via push notification to help convert them into sales.
The example Tang used was a person visiting an e-commerce site to buy a pair of shoes. While they are on the site, Retaily can tell the user when the last pair was bought, what kind of person bought the shoes and if they leave, the service re-targets them with offers.
A history of bootstrapping…but not this time
Tang is not new to the entrepreneurial journey. As he said it, he was starting companies online before the word ‘startup’ became popular in the lexicon. He started as an ‘Online Entrepreneur’.
He got his start selling mobile phones and the original playstation online and found he was making a significant chunk of change. That experience motivated him to start eSolved.com in 2001 — a solution that allows users to quickly set up e-commerce websites.
eSolved.com eventually led to Tang founding Instantestore.com (a similar company but can be called the ‘next generation’).
The interesting thing about these two experiences is both companies were bootstrapped, and while he found success, he has no intention of repeating the model for Retaily.
“Back then, none of our competitors were funded and we were profitable for some time, so we thought, ‘why would I want to take in money?’ So, we turned them all away.
“And that’s when some of the competitors like Shopify raised a lot of money. And when they did that, it made it very hard for us to compete,” Tang said.
Retaily raised a seed fund via the Khazanah Cornerstone Programme, programme similar to other government accreditation services.
Cornerstone vets startups and gives them a ‘stamp of approval’ in an effort to help Angel investors find trustworthy companies (Singaporeans can think of Accreditation@IMDA). Cornerstone will then co-invest in the startup in a 1-for-1 scheme to further incentivise investment.
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Retaily is now working to position itself for the scaling process and at that point will seek additional funding.
Tang’s experience as a bootstrapper led to some good advice for startups:
“Don’t raise for the sake of raising. But if you see a good product-market-fit, definitely raise and scale it up quickly. Do not rely on organic growth because sometimes a competitor will come out of nowhere and jump over you.”
Moving forward, Tang is pursuing a rapid-growth strategy and said if we spoke in a year he hopes to be talking about 10x growth.
Malaysia’s e-commerce industry seems to be on an upward trend, and if a rising tide raises all ships, Tang and Retaily are positioning themselves to build the engines.
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