The company enjoys strong support from SME merchants but Amazon may soon give it a run for its money.
Singapore’s e-commerce market is tough nut to crack but Korea-based Qoo10 easily beat out e-commerce giant Amazon and Lazada in garnering the patronage of the reluctant Singapore market for surprisingly simple reasons.
Qoo10 offers the lowest prices compared to its main competitors which are also frequently lower than retail prices, Thibault Ricbourg, director at Simon-Kucher & Partners told Singapore Business Review. Such focus has enabled the platform to tap and enjoy the patronage of SMEs which are an often overlooked demographic as most retailers scramble to gain and maintain the attention of consumers.
“From Qoo10’s strategy, we can learn that e-commerce platforms need to adapt their service to the local markets to achieve success. This focus must not only be for consumers, but also on merchants,” Ricbourg added.
Even Qoo10's CEO has affirmed this niche focus as possibly one of the platform’s greatest strengths over rivals who come with much more advanced technology and logistics networks.
"We are much more optimised for small and medium enterprises (SME) merchants to do the e-commerce businesses, whereas the other companies are intrinsically favorable to the bigger guys,” Qoo10 founder and CEO Ku Young Bae was quoted in a local media report. “Our platform and programmers, and the dynamics we are trying to create, are optimised for SME merchants."
And this has paid off as Qoo10 now accounts for more than a third (32.6%) of Singapore’s e-commerce market, effectively beating e-commerce giant Amazon and Apple which only have 11.5% and 11% e-commerce market share, according to Euromonitor data.
It helps that Qoo10 has been in the Singapore market longer than its main competitors. First launched in 2010, Japan-based Qoo10 had more than enough time to learn its way around the local e-commerce landscape before Zalora (2013), Lazada (2014), Rakuten (2014) or even Amazon (2017) came along.
“Having already established itself just before the internet shopping “revolution” is taking hold in Singapore, Qoo10 was in a prime position to take full advantage of the boom in internet retailing, what more with the lack of serious competition in the early internet retailing space,” Chayadi Karim, research analyst from Euromonitor International said in an earlier interview.
Qoo10’s highly localised offerings reflect its long experience in the Singapore e-commerce scene as opposed to companies who are just tapping on the lion city as a strategic gateway for their Asian expansion. This is evident with their eight different payment methods as well as its Express Shop which promises delivery of a wide array of products from groceries to electronics within a span of three hours, said Ricbourg.
“Through its localised strategies, Qoo10 has provided greater convenience and savings for Singapore’s consumers, which some other players lack,” he added.
With Qoo10 combining multiple models with the same platform including Group Buy, Express Shop & Auction, consumers are also spared the hassle of navigating to other sites whilst volume consolidation is able to prices down. Gamifying the shopping process by rewarding users with Qpoints and a lucky spin use also boosts customer interaction with the platform, adding a fun twist to the retail experience.
However, Qoo10 needs to think fast to cement its leadership as a growing number of retailers like Shoppe have been rolling out similar gamified features like Daily Check-in and Spin and Win to replicate the market leader’s success, Ricbourg noted. It also has reason to fear as Amazon and Lazada have been ramping up efforts in recent months to incentivise purchases in their respective platforms, in effect luring Qoo10's users away.
“The prospect of two of the world’s largest e-commerce players firming up their commitment towards to Singapore market would no doubt threaten Qoo10’s current dominance,” Karim said. “Qoo10 might find it difficult to maintain the same level of dominance that it currently has.”
Do you know more about this story? Contact us anonymously through this link.