SINGAPORE: Build it, and they will come. Or so the saying goes.
This appears to be the strategy e-commerce site Qoo10 is adopting as it looks to shake things up in the online shopping space.
The Singapore-headquartered online business is planning to officially launch its blockchain-based e-commerce site, QuuBe, in the new year. When it does, it said it will introduce a new way of approaching e-commerce as a business, removing the need for service or transaction fees usually imposed on online sellers.
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Founder and CEO Ku Young Bae told Channel NewsAsia during an interview ahead of the launch that adopting blockchain was the simpler, easier and more sustainable approach to commerce in general, not just in the online space.
New Qoo10 users will need to register with the company and set up a digital wallet that is needed to store its digital currency – Q*Coins.
One Q*Coin is equivalent to US$1. On the day Channel NewsAsia spoke to the CEO, one Q*Coin is worth S$1.38.
Shoppers can then use the currency to buy things on QuuBe, which lists prices of products only in Q*Coins.
“It seems like we’re taking a step back in adopting a prepaid digital wallet system, but this will help consumers in developing markets that do not have credit cards, for instance, to still buy online,” Mr Ku explained.
A blockchain is a distributed ledger system that records and stores transactions made between digital wallets that are safeguarded by tough-to-crack cryptographic algorithms. The information on these wallets can only be altered if one has the right key, and no change to the ledger can be made once the transaction has been verified.
As QuuBe was designed to be a private blockchain, users’ digital wallets and the contents will only be visible to their owners, the CEO clarified.
He added that beyond blockchain rules, Qoo10 designed its platform such that payments made are held in escrow until there is proof of a successful delivery – either by the buyer’s confirmation or an update by the logistics partner. This, he said, is an additional layer for buyers’ protection.
It also does away with the need for a third-party to verify and process the transaction, as is currently the case with online payments, thus eliminating another cost component for retailers who would hopefully pass the savings down to consumers, explained Mr Ku.
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With the elimination of the costs involved in processing payments and lowered spending on IT systems needed to maintain things like databases, Mr Ku said these cost savings are then transferred to retailers. Online sellers, for instance, no longer need to pay the 7 to 12 per cent service fees to Qoo10 when they list on QuuBe, the CEO said.
In turn, the higher profit margins mean sellers have more flexibility to lower their prices, which would potentially benefit consumers, he added.
A NEW WAY OF SHOPPING
The CEO shared that QuuBe was soft-launched in Nov 1 this year, with 100 retailers onboard offering about 500,000 products. Since then, about 10,000 transactions have been conducted, he added.
One merchant on the blockchain e-commerce platform is travel agency THK Tour. Managing director Erica Huang told Channel NewsAsia over email that the company signed on to Quube because of its past dealings and confidence with the online shopping platform.
“Previous sales we got from Qoo10 is pretty good,” Ms Huang said. “The marketing for sellers is also quite good and effective. (These) give me confidence for QuuBe.”
On the blockchain system QuuBe is built on, she said she understands all deals will be based on Q*Coins and it is a “new shopping platform or lifestyle” that people will be keen to get on board.
The fact that QuuBe will be removing transaction and listing fees was also a pull factor for the company.
“(This) means we are saving our business costs on e-commerce and be more flexible in our pricing,” Ms Huang explained. “We can even have more promotions for our customers due to the cost savings.”
Ultimately, QuuBe will not replace the main Qoo10 e-commerce site but act as a complementary offering, Mr Ku said.
He added that getting merchants and online shoppers to commit to a pre-paid digital currency method also helps to get people in developing markets that may not have easy access to credit or debit cards to engage in e-commerce.
The CEO acknowledged that other digital payments players such as Grab and Fave are also trying to address this hurdle through their respective mobile wallet offerings, but he is backing blockchain technology to be the decisive enabler for this.
It also helps to grow the e-commerce platform’s footprint in the Southeast Asia region.
The Business Times reported in April that it sold its Japanese assets to eBay to boost its coffers in preparation for a battle with other market players like Lazada and Shopee – both backed by deep-pocketed backers in Alibaba and Tencent.
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In figures by Malaysia-based online shopping aggregator iPrice showing traffic to these e-commerce websites up to November, Qoo10 was the most visited by Singapore-based shoppers with an average of 10.2 million visits. Lazada was next at 7.3 million, though it did briefly overtake the leader in November, which “might be hugely driven by the 11.11 (online shopping event)”, iPrice told Channel NewsAsia in an email.
However, Qoo10’s dominance here is not reflected in the other regional markets it is in, such as Indonesia and Malaysia.
The figures from iPrice’s third-quarter Map of E-Commerce showed that it is not listed in either Malaysia or Indonesia’s top 5 e-commerce platforms. Lazada and Sea’s e-commerce unit, Shopee, topped the list in Malaysia, while Tokopedia and Bukalapak were Indonesian shoppers’ platforms of choice.
So will QuuBe be the key to unlock the door for Qoo10 to be more than an also-ran in these regional markets? CEO Ku is optimistic its blockchain play positions it for future growth.
“As Southeast Asia’s many economies continue to grow financially and technologically, e-commerce platforms must be ready to welcome new users with vastly differing requirements,” he said in the press release on Thursday announcing QuuBe’s launch.
“With blockchain technology as QuuBe’s backbone, we believe that it is ideally positioned to build and nurture a truly global e-commerce community.