Creative Idea Powerhouse

Platform2u.com was established in October 2008 by a team of young and ambitious technopreneurs. The company was formed with the vision to provide a complete end-to-end e-commerce platform to the Asia industry by easily setting up online-businesses and trading in the global marketplace. In a short span of three months, we have obtained the MSC status from Malaysia Government in early January 2009 to recognize for our innovative research and development efforts in e-Commerce era. In April 2009, when Platform2u.com was just seven months old, we are proud to launch our brainchild, SMILD(S), the fourth generation e-commerce solution to the public. Being young and energetic, SMILD(S) was well received and we were pleased that in a glimpse; our community grew to several hundred merchants and still growing.

Platform2u.com’s mission is to become the Pioneer and Enabler as well as a being a professional Service Provider in a brand new Business-to-Business-to-Consumer-to-Consumer (B2B2C2C) platform in Asia Internet Retailing industry. It has been our vision to be the Top 5 Internet Retailing platform in Asia Pacific Region and to build our very own Malaysian brand and make a stand in Asia. As our motto says “We will definitely make it happen!

Erick @ Techcrunch posted an article today cited the predictions on Tech industry for Year 2009 pertaining to emails he received from Wall Street Analysts. Two companies analysts, J.P. Morgan’s Imran Khan, for instance, predicts Yahoo and Microsoft will finally strike a search deal, video advertising on the Web isn’t working, retail bankruptcies could actually help e-commerce companies, and that M&A activity will pick up in the second half of 2009 (but the IPO market will be dead until 2010). Barclays’ Doug Anmuth believed that both Yahoo and eBay will make major strategic moves this year to try to right their businesses, distribution wars in search will break out between Google and Microsoft, and there will be consolidation among the 300-plus ad networks out there. Both believe that performance-based advertising will continue to rise in importance, good luck to Facebook and wish the company can finally turn the entire e-marketing model.
Erick also reveals six of the ‘make believe’ predictions he received and listed below:

Imran Khan’s 2009 Tech Predictions (J.P. Morgan)
1. Potential search deal likely between Yahoo! and Microsoft
2. Net Neutrality should become an important mainstream issue
3. Challenges in monetizing video advertising should persist
4. Mobile usage should continue its strong growth momentum, but mobile advertising will likely be challenging this year
5. Possible bankruptcies in brick-and-mortar retail should create opportunities for eCommerce companies
6. M&A consolidation activities could potentially resume during 2H’09 (IPO market is dead until 2010)

Doug Anmuth’s 2009 Tech Predictions (Barclays Capital)
1. Yahoo and eBay will make major strategic decisions
2. Performance-based advertising will be more important than ever
3. Increased Competition For Search Distribution Via Toolbars, OEM Deals, and Partnerships
4. Proliferation of Smart Phones Will Drive The Mobile Internet
5. Small Strategic Acquisitions Will Re-Emerge
6. Ad Networks To Consolidate

Personally, due to my nature of business background, I am particularly interested in Imran’s prediction on Retail industry. I will share out my opinion on this in later post, but I believe that the traditional Brick-and-mortar retail will still survive, for at least another 2 years, but the retailers need to take immediate action to revisit their operation and profit model. The ‘look alike prediction’ will be there will be many new e-commerce store comes online, which caused the e-retailing industry to continue blossom and enjoy steadily growth for the next 5 years. More technologies will be invented to focus on how to convert visitors from online portal to become consumers. Social commerce will be a big hit also if Apple Apps, Facebook and other social networks implement their online micropayment model. Best wishes for e-Retailing in 2009!

I’ve been following on the local e-commerce growing and path-making landscape. Personally I found it is easy for any supplier, corporate or merchant to built a virtual store-front, and announced that they are in e-Commerce and selling to its potential 1.5billions consumers online. It is so amazing that these people have a mindset that once their portal, store front are listed on the search engine like Google or Yahoo, the next thing there will be millions of people clicking through their store and make orders. Yes, it is so simple as 1-2-3 to be listed in Google, and any SEO company can give you value added services to be on first 3 page ranking too, with little investment you willing to pay. However, that’s just the marketing talk and to be very honest, I get the response from many virtual store owners feedback, it doesn’t sell.

In Taiwan or Japan, if you would like to be successful as a B2C or C2C merchant, there is a set of detailed courses for you to go through. The course cover from front page design, product photo appearance design, product keywords design, SEO, how to gain consumer’s trust … and they have a stack of facts and statistic to guide you on what consumers look for when come to online, and this value on education is what I see lacking still in local market. Even there are people giving talks, sharing knowledge on their personal experience, there is still lacking of environment that value these knowledge. We are still in the learning path where suffcient sacrifies and wastage investment in e-Commerce is needed until the industry is mature. Should I say this. Again and again I asked myself, which is the successful e-commerce site you aware in Malaysia that is really making big bucks? Yes you can blame that the Malaysia consumer market is relevant small where economic of scale may not be sufficient to kick a big brand, or our internet penetration rate is low, or even because our retail outlet rental rate is lower compare to Japan or HK or Taiwan causing that there are still many stores out there for people to have choice and perfer physical experiencial touch. Yes all these reasons are valid, valid enough for people to stay away from this big piece of cake. ASEAN market having more than 500mil people, an open untap market, high young generation that are ready to enter the market and soon to be the largest spending machanism to continue growing the countries’ GDP.

The challenge for e-Commerce not ready in Malaysia due to IT or penetration issues? For credit card, the 3D authorisation method is good enough and strong to protect merchants and consumers, the broadband infra is ready (in fact I don’t see how fast you need your broadband connection to be to place an online oder), we have high penetration rate for internet access, and yes, 3G and Wimax does help, e-commerce technology and platform, webpage design service is available widely and cheaply (in fact you can hire a part time freshie to get you a page for very very Reasonable cost to invest, with full shopping cart function, payment gateway etc.). If the government will put some effort to enforce cyber law and take real action to follow through the online trading fraud, and create a trustable trading environment, will this help?

By far, this is just the first step e-Commerce challenge for B2C. There are still many more challenges await ahead for those who are study for potential investment into this 1.5bil consumer market. Logistic, payment gateway, security, IT infrastructure scalability, and many more issues still remain a challenge to explore. Take an example on logistic challenge, Amazon announced its 14th record holiday season, with 72.9 items ordered every second, up from 62.5 last year. How many resources are needed to be in placed to process this huge orders spike during holiday season? nearly 73 orders coming in every one second when the clock tick once. The entire supply chain, the IT capacity to process all these, and payment gateway to verify, QC to ensure right item is shipped to the right person with lowest error (imagine 1% return rate due to human error in a day will cause more than 63,000 items rejected and the cost of this error in logistic itself will result losses of $630k a day)

The day that orders peaked was on December 15th, when 6.3 million items were placed into Amazon’s checkout carts. That number was up 17 percent from the peak order day in 2007 (December 10). With five fewer shopping days this season, orders shipped peaked at 5.6 million on a single day, up 44 percent from last year. Some of the best-selling items this year included Eyeclops night vision stealth goggles, the Nintendo Wii, Razor scooters, Samsung 52-inch LCD HDTVs, The Dark Knight DVD, and the Twilight Saga books by Stephanie Meyer. Amazon says it was able to ship 99 percent of all holiday items in time for Christmas.

How does this year compare to seasons past? Barclays analyst Doug Anmuth provides the following comparisons:

Peak items ordered on a single day

2008: 6.3M
2007: 5.4M
2006: 4.0M
2005: 3.6M
2004: 3.6M

Items ordered per second

2008: 72.9
2007: 62.5
2006: 46.3
2005: 41
2004: 32

Peak items shipped on a single day

2008: 5.6M
2007: 3.9M
2006: 3.4M
2005: 2.7M
2004: 2M+

For the young entreprenuer, elevator pitch seems challenge, especially you need to sell your idea in less than 1 minutes. Just imagine you are the guy who going to pitch the investor who going to invest in your company for millions, and you have this golden opportunity of less than 1 minute (about the time for elevator to go from Ground Zero till you walk out from the elevator with smiling face). Every phrase and word you use will decide the chances of you winning the interest of your big investor to further look at your BIG PLAN.

Paris-based Zlio.com is a white-label online store for anyone, working with partners including Tesco, Apple, Littlewoods and Play to allow people to set up their own shopfronts.

The site launched in France in 2006 and in the US recently. The site deals with the complexities of the online payment system, and members take a share of the products sold through their site. One average, members make around $300 per month but the biggest users have been earning $3,000.

Zlio has 18 full-time staff and has had funding from two German business angels and from Mangrove Capital.

Founder Jeremie Berrebi explains how it works.

• Explain your business to my Mum.
“With Zlio you can open your own store even if you have nothing of your own to sell. You pick from products offered by our name brand merchants to populate your store, and sell anything you’re interested in online.”

• How do you make money?
“We generate sales for our merchant partners and take a percentage of these sales.”

• What’s your background?
“I’ve been in the internet industry since 1994, when I started working with Compuserve. After that I worked in a number of internet-related companies including managing an online forum for the Tour de France and acting as online manager of EMME. For about a year and a half I wrote for ZDNet France and then, founded a first company called Net2one, a news search engine which sold to TNS in 2004, and started focusing on the concept of Zlio in July 2005.”

• How many users do you have now, and what’s your target within 12 months?
“Right now there are more than 200,000 stores on Zlio.com and we work with 350 merchants worldwide. By the end of the year I hope that has increased to 1m Zlio shops.”

• What’s your biggest challenge?
“Our biggest challenge right now is transforming Zlio into a global business. Currently 75% of our users are in France and we’re starting to see a lot of interest from other markets, including the US and UK, but we’d like to see our worldwide distribution grow as quickly as possible.”

• Name your competitors.
“Amazon aStore is really the only other company out there offering something close to what we do.”

• What’s the weirdest business experience you’ve had so far?
“In my last company I was trying to motivate the team and told them that one day we would take a company trip to Euro Disneyland. A few months went by and I had almost forgotten about this promise, but one day I had 20 upset employees storm into my office and demand the trip. They were ready for the rides!”

• If you had £10m to invest in another web business, what would you invest in?
“I would invest in Stardoll. I like that they sell virtual goods for real money and have proven it can be a successful business.”

• Are we in the middle of a new dot com bubble?
“I don’t think we’re seeing the same environment that we did in 2000. The difference is companies have now figured out how to make money with online businesses. However, I do think certain industries are seeing a heightened level of activity like the photo-sharing and social network categories. This is the natural result when a new industry is forming; you always have a lot of people trying to do the same thing in hopes of being one of the few winners.”

• Where do you want the company to be in five years?
“Our vision is to create the largest digital sales force in the world. We want people to be able to sell products all over the world from online catalogues.”

• Are you the next big thing?
“We haven’t seen any real revolution in the e-commerce area since Amazon and eBay. While it seems a little over-eager to say that we’re the only next big thing, I do think that Zlio is the company that will drastically change the e-commerce landscape for the first time in a decade.”

I have finally complete the base case study on Rakuten Inc, and also its largest retail mall Rakuten Ichiba.
The company currently claim that they have exceed 40million registered members, and more than 25,000 merchants stores using their platform to sell online. Its e-commerce business unit achieve sales of 14.2bil Yen in Q1 08, and 15.4bil Yen in Q2,08 respectively, which turn to be approximately US$100mil per quarter. The group financial reports US$1.7bil net sales in 2007, with US$304mil in Net income during the same period (17.2%) which is an interesting figure for a e-Commerce company in Asia. In early 2008, Rakuten Ichiba joint ventured with Taiwan’s President Chain Store to found Rakuten Ichiba Taiwan as its first attempt to bring its cybermall business oversea. The JV formed a NT$174million giant and successfully captured 440 shops signed up and 160k members registered. The formation also help Japanese merchants to ‘export’ their products to Taiwan members, which claims to be a strategic move for Rakuten Ichiba global expansion.
However, when we compare these figures with Amazon.com, it is really interesting to know that Amazon is currently having 78mil active members, and gross sales of US$14.8bil. during the same Y2007 financial report. Amazon also has seller group (merchants) of 1.3million worldwide.