SINGAPORE: Wendy Liu cuts a diminutive figure. You would hardly notice her in a crowd, much less realise that she is a co-founder and CEO (Singapore) of ezbuy, a successful e-commerce platform.
In 2010, she and three friends decided to make their foray into the then-nascent e-commerce industry and started ezbuy, which they now describe as Singapore's largest global online shopping platform and leader in cross-border e-commerce in Southeast Asia.
In 2016, ezbuy.sg was the 9th top search term in Singapore according to Google’s Year in Search ranking.
The platform allows consumers to shop for items directly from online stores out of China, Korea, Malaysia, Taiwan and the US. Singapore consumers enjoy access to millions of products worldwide while paying “the least in itemised costs”.
In May this year, it raised US$17.6 million in its latest round of funding, which it intends to use to "offer quicker and more reliable modes of localised services".
But for all her business success, Ms Liu, who is originally from China, seems very nervous during our interview. At first, she hesitates to answer even the most straightforward questions such as why and how she ended up in Singapore.
After some cajoling, she reveals that she came here at the age of 17 to further her studies at her mother’s insistence.
To listen to the full interview, click here.
“I was quite a little princess at home. In China, every family has only one child. My mother just felt that I was quite dependent. My mum works in government and her job is related to the education system. She just felt that maybe an overseas educational system was more advanced. She also hoped that I could be more independent. She hoped that I can explore more things outside of China.”
Now a Singapore citizen, she holds a Master’s degree in Industrial & Systems Engineering from the National University of Singapore and is a First-class Honours graduate in Electrical & Electronics Engineering with a minor in Business from the Nanyang Technological University (NTU).
When she says that she has learnt a lot and gained more than she can expect from studying and working independently in Singapore, I ask what precisely she has learnt.
But this question is met with hesitation and nervous laughter.
We soldier on despite the difficulties. To be fair, at certain points, she does come across as a confident businesswoman.
At one point she declares, “I think in the near future, we are going to be the only profitable e-commerce platform in this region.”
But when I ask why she is so confident, I am again met by a pause and a heavy sigh, before she says, “I can’t really share.”
I wonder why she would make such a statement but then decline to elaborate.
She then answers the question.
“We have now expanded to countries outside of ASEAN region. That is why we need this latest round of funding. And with expansion in other countries, we are able to work towards breaking even.”
THE PUBLIC SPAT WITH TAOBAO
One thing is for sure.
ezbuy’s public spat late last year with Chinese e-marketplace giant Taobao and its owner Alibaba still makes her uncomfortable.
Her company was forced to stop offering some of its services after more than 1,000 of its accounts were blocked by Taobao.
Alibaba had said that ezbuy’s practice of creating accounts to buy items from Taobao and reselling them was an act of scalping.
At the time, ezbuy had said that they were “simply giving customers a more curated selection of products”.
That was how their “China Buy-For-Me” service was positioned from the start.
When I ask Ms Liu about whether there have been any developments on this front today, she is visibly agitated and seems unwilling to address it.
Eventually she says there have been “no further developments” on that front.
“I’ve no further comments on that. But, to be very honest, for the past eight months, we’ve been working even harder to bring more and more sellers to join us and sell directly to customers. You know in China, there are millions of sellers. Those sellers are our working partners. There are also others from other parts of the world who are already on our platform. So, we are trying our best to get more sellers to join ezbuy and help them to sell to local consumers directly.”
Thankfully, she grows more confident as the conversation progresses.
It was two years ago that ezbuy was rebranded from a third-party proxy platform to a direct marketplace which she says has “really made the huge difference”.
When I ask her about Alibaba’s allegations of “scalping”, she categorically denies it.
“What does scalping mean? It means you buy something at cheaper cost and sell at higher cost. But that’s not what we were doing. For example, the shipping fee we can offer to consumers is the lowest in the industry and the consumer is not paying higher. Scalping literally means that you gain huge profits from selling certain things. But we are not gaining huge profits. Otherwise we wouldn’t need our venture capitalists to invest in us.”
WILL PRICES INCREASE AFTER MARKET SHARE IS ACHIEVED?
Indeed at this point, she says ezbuy is not profitable even after 8 years, but she expects to achieve profitability “soon”.
She admits that the focus for the past eight years has been market share.
I wonder though whether once they achieve market share, their prices to sellers and buyers would increase.
Could e-commerce go that way too?
She assures me that this is not their plan.
“Once you get enough market share, you are able to get some profit because you have the economies of scale, you are able to manage your costs, you are able to help your sellers to have more efficiencies so that they can sell things cheaper to your customers,” she says.
“Competition is very important. You need to have more players in this industry in order to maintain competitiveness to offer consumers a better price. Mergers and acquisitions may work against that. The Government must make sure that there is fair competition in this industry and we should not tolerate a monopoly in any of the industries because then, consumers will suffer.”
At this point, one way they keep their costs down is by consolidating deliveries in order to manage transportation fees. They also made a deliberate attempt early on to take control of the delivery process.
“In 2010, when we first started, if you wanted to do a night delivery or delivery over the weekend, local logistics companies would charge us maybe about S$30 to S$40. So in the end, we decided, why not do this ourselves.”
Like some other logistics companies, they’ve also introduced hundreds of collection points for customers to pick up their parcels on their own, thereby reducing costs further.
STARTING UP WHEN NO ONE ELSE HAD
She remembers a time when she had to deliver parcels to customers on her own and how underdeveloped the local market was.
“When my friends and I started this business we had to do everything on our own. There wasn’t even an online credit card payment system in Singapore. We had to accept bank transfers. When we first started in 2010, customers needed to go to a desktop computer to shop online. It was in 2012 that we introduced our first shopping app in Singapore.”
She admits that starting such a business in such a market was risky, but says that she and her team were determined to make it work.
“Every decision has a risk factor. It’s all about how you are going to manage your risk and it’s about your determination, whether you want to be successful or not. I think in a country where e-commerce had not taken off, it really gave us a first-mover advantage. We were quite lucky that when we started in Singapore in 2010. There was no other player in the market and that helped us to actually accumulate a group of customers who are really tech-savvy and have a huge influencing power.”
Another reason for their success is that the retail scene here was “really not evolving”, she says.
“Things were still expensive and everything was imported from overseas, so it wasn’t difficult to come up with a unique selling proposition.”
Ms Liu’s drive to become an entrepreneur started in her university days.
“Since young, I was very good at subjects like mathematics, data and other computing-related subjects, so it was quite natural for me to choose engineering as my field of choice. I feel that engineers make significant and impactful changes for our society, leveraging on technology to re-shape our lifestyles.”
But while her fellow schoolmates stuck to the minimum core curriculum, she decided to pick up additional business-related modules.
She did this largely out of curiosity, but they ended paving the way for her career.
On a visit to China later, she realised the virtually unlimited product varieties on offer and decided to design a concept to allow customers from Singapore to shop globally with savings to boot.
Singapore, she says, is one of the best places in the world to start a business.
“I feel that the Singapore Government is really a very friendly government. There are so many policies to help startups. You just need to go online and apply, or ask some agency to help you and then you are able to open a business. In other countries, it could take weeks.”
Starting might be easy, but survival is quite a different matter.
“Our business model helps. We didn’t really need to pay upfront rental to run the business. We just needed a web site. But nothing is without a challenge. It may be competitive in Singapore, but the competition overseas is even more intense.”
While startups are all the rage in a range of industries – from e-retail to transportation – she acknowledges that recent experiences may have left a bad taste in customers’ mouths.
Referring to bike-sharing company, oBike’s sudden closure in Singapore recently, she says it’s an example of what not to do.
“I really think it was not responsible of them to do this. You have the trust from customers. You need to be responsible for everything. We are a local startup and our customers are largely Singaporeans. I think that really helped us to instill a trust factor in consumers’ minds.”
However, the e-commerce landscape will soon change.
We discuss a Goods and Services Tax (GST) that will be pegged to imported e-commerce services in 2020.
The GST will apply to overseas suppliers without an establishment here and will cover digital business-to-business services including marketing and IT services, as well as business-to-consumer services such as video and music streaming, apps and listing fees on electronic marketplaces.
E-commerce tax for goods that cost less than $400 will not be affected for now.
Ms Liu does not see the tax as a problem.
“I think it’s fair enough because in retail, customers are paying GST, so why not on e-commerce. I think it’s a fair decision as long as every platform is taxed equally. Fair play is very important in every industry.”
ARE BRICK-AND-MORTAR BUSINESSES DOOMED?
Considering the growth of e-commerce, I wonder if she thinks brick-and-mortar retail will soon be dead.
“E-commerce is developing, but if we look at the retail space in, for example, China right now, everyone is talking about 'new retail'. It’s all about how you are going to connect online retail to offline retail. We’re thinking about how we can help more offline retailers sell online and at the same time, how we can encourage consumers to go to retail stores to have a better experience.
"One way is to let customers for example, try on clothes in the store, but not waste time queuing up to make payments in the store. Let them make payments online and get their clothes delivered to their doorstep the next day."
Traditional retailers have to be “more open about innovating with online stores”.
Online stores “are not the enemy”, she says.
With technology such as Virtual Reality being developed to enhance the retail experience, she feels the sector is going to become even more vibrant.
THE IMPORTANCE OF HUNGER
But in order to succeed in any sector, she believes that Singaporeans need to be more “hungry”.
“Compared to people in the States and China, we are not that hungry. The government brings a sense of security to the population here. This is good, but also bad. This is why a lot of people don’t feel any threat of competition. However, the world is evolving so fast. We have to stand out.
“Nowadays, schools offer more interdisciplinary subjects to help students to explore different kinds of fields. University students and even adults are able to take up courses like virtual reality and blockchain technology. I think it’s all about how we can stay hungry and have the eagerness to learn new things.”
While today, Ms Liu seems rooted in Singapore, I wonder if she would consider going back to China.
"No, I love this country. During the best of my past 10 years, I’ve been here and I have seen a lot changes and I have been part of the changes. So this is something that I will never forget.”
She believes that if she had stayed in China, she may not have had the opportunity to be part of the industry.
“I was studying electronics engineering at NTU in Singapore and opposite my campus was Nanyang Business School. It was because of that that I made the decision to take a minor in business. I believe if I went to one of the universities in China, I wouldn’t have been able to do that. There wasn’t such set-up for students to explore when I was there.”
She currently sees her business as a way to “contribute to customers’ lives”.
She acknowledges that they receive bad reviews, which she tries to “investigate personally”, but she also makes it a point to spend time reading the positive reviews. Ultimately, it comes down to the little things.
“Positive reviews energise and motivate me. On our 5th anniversary, we had an event and invited a lot of customers to join us. Some who couldn’t show up sent me personal e-mails. Some said they had been shopping with us from the time they were in school, through to the time they got married and bought their first home and had to buy furniture for renovations.
"When I read these, I felt like my efforts have been worthwhile.”