Southeast Asia’s ecommerce market represents a huge opportunity for international brands: annual sales are expected to reach $230 billion by 2026. But the sector can also be intimidating – brands need help navigating local nuances, from product certification to deals with fulfilment partners, whether they’re selling through platforms or directly to consumers.
Ecommerce specialist etaily markets itself as the enabler that can help businesses overcome those anxieties – and investors are backing its vision. The company is today announcing it has completed a $17.8 million Series A funding round as it targets annual revenues of $100 million by 2025.
That would be a meteoric rise for a business only founded in 2020. But etaily’s has already onboarded a string of marquee names, including Crocs, Levi’s, Skechers and Fila, all of which see it as a short cut to success in Southeast Asia.
“So many brands want to break into this market,” says Alexander Friedhoff, the German founder and CEO of etaily. “But while they see the region’s fast-growing middle class, its very large number of younger consumers, and its high levels of internet penetration, they also recognise the challenges of getting into a number of different markets, each of which have their own characteristics.”
Friedhoff therefore launched etaily as the engine that can drive these brands’ ecommerce growth in Southeast Asia. The company has developed its own proprietary technology, through which it provides what Friedhoff describes as an “end-to-end ecommerce solution”.
In practice, that means etaily can help brands do everything from develop their presence online in the region to distributing their products once sales have been made. The solution can sit behind both third-party ecommerce platforms and brands’ own ecommerce sites; it can also link with brands’ offline retail operations – so that inventory can be delivered from stores, for example.
The idea is to take the pain out of launching and running an ecommerce site in Southeast Asia. Friedhoff explains: “Our ecosystem spans the entire customer journey, from development of lifestyle products through in-house branding capabilities to delivery to a local and regional customer base from etaily’s asset-light warehouse network.”
It’s a value proposition that gained traction quickly. The company made sales of just £200,000 in its first year, but Friedhoff says it is on course to top $30 million in its latest trading period.
One major success factor has been the profile of etaily’s investors to date, many of which have been able to introduce it to the brands it wants to attract. “Our capital table has been huge for us,” says Friedhoff. “We already count four of the region’s largest conglomerates among our investors.”
The company’s Series A round should provide further support of this kind. “It’s not just about raising finance,” Friedhoff adds. “We’re also bringing in investors who can help us grow.”
The financing is led by the Chinese and Taiwanese private equity firm SKS Capital and Singapore’s Pavilion Capital. It also features the Magsaysay Family, Gokongwei Investment, Kaya Founders, Japan’s SBI ICCP Fund, the Chan family and Foxmont Capital.
These investors join existing backers such as the Philippines’ oldest conglomerate Ayala Corporation, which owns mall operator Ayala Malls, consumer goods manufacturer Century Pacific, department store chain Landmark Philippines, and a number of angel investors with experience in the ecommerce sector.
etaily is headquartered in the Philippines, now expected to be the fastest-growing economy in the region this year according to the World Bank. Across Southeast Asia as a whole, consultant Bain & Co has forecast that the number of digital consumers will rise from 370 million today to 402 million by 2027; it picks out the Philippines, Vietnam and Thailand as the fastest-growing ecommerce markets.
Jack Chen, founder of SKS, believes etaily is well-placed to capitalise on these trends. The business “offers significant prospects for incorporating advanced omnichannel technology solutions into brand operations,” says Chan. “This will enable substantial growth in the near future.”