Spurring The Recovery Of SMEs Post Pandemic – iStore iSend

Tommy Yong (L) & Joe Khoo (R)

An interview with Co-Founders and Chief Executive Officer, Joe Khoo and Chief New Initiatives Officer, Tommy Yong of iStore iSend

BusinessToday: Your view on the current SME ecosystem in Malaysia?

A: As SMEs represent about 97.3 per cent of registered businesses and 65 per cent of total employment in Malaysia, the growth of SMEs is critical to Malaysia’s economic growth and is the backbone of our nation’s economic progress.

During the pandemic, the commitment to drive SME development is already visible through the government’s facilitative role in creating a more conducive environment for businesses to thrive, which include targeted financial support. Given these circumstances, the SME ecosystem in Malaysia has significantly and tremendously grown, compared to how it was a few years before the pandemic. On top of that, SMEs have received a platform that could have extensively aided the SME ecosystem, specifically in terms of promoting and empowering entrepreneurial activities. Hence, we have achieved a great deal thus far for our SME ecosystem that has contributed to the growth of Malaysia’s economy.

BusinessToday: What is your role as an e-commerce company in ensuring your business survivability?

A: Before we reached the sweet spot that we are currently at in the market, e-fulfilment and e-commerce were not as prevalent and prolific in the region as today. As e-fulfilment was a totally foreign and strange concept back then and it required a lot of effort from iStore iSend to educate the public as well as the target market on what e-fulfilment really is and how essential your product offerings are to the e-Commerce growth.

Ever since our inception, our goal is to provide all-round reliable logistical services. That is how we come out with the idea to help online businesses thrive, especially those who are just starting out and we are glad that we have the expertise to do that.

Due to this, as an unconventional logistics company, our business has evolved beyond logistics management to e-commerce management, and we also have some products in tech i.e. back-end assistance, channel management for companies that are just venturing into e-commerce, online store setup, onboarding of brands to online e-marketplaces, official online store management, growth and marketing campaigns management, listing and even customer services.

Meanwhile, we too adopt our proprietary system, ODiN to automate customers’ e-commerce operations. The system mainly comprises an order management system, a warehouse management system, and a transportation management system. We also provide online merchants with consultation services.

BusinessToday: Can you share your experiences and thoughts from observing how the logistics industry has transformed in Malaysia since when you first started the company?

A: iStore iSend had our first breakthrough in 2016 when we onboarded our first enterprise clients, LOréal and Levis. That was the start of a torrent of referrals from other prominent firms in the fashion, wellness, and beauty industries, to the household goods sector. We founded the company in a place where we truly want to help online businesses thrive, especially those who are just starting out and we are glad that we have the expertise to do that.

Now that we have platforms like Shopee and Lazada, as the adoption of e-commerce caught on, more businesses started growing in both volume of products and sales, and they were not able to cope with the growing number of sales orders. More SKUs in place could only mean a higher margin of error – let it be shipping out the wrong product or having a return of the product due to a wrong size. It has allowed our business to evolve beyond logistics management to e-commerce management. This has allowed us to also have some products in tech. We provide back-end assistance, and also support when online merchants are just venturing into e-commerce and require help in setting up the e-commerce division.

The evolution of e-commerce has also broken the ground for a promising future for the industry. This has not only aided the transition towards digitalisation, but also increased consistent product demands and unlocked doors for more e-commerce providers to eye for regional expansion, emerge, capture and penetrate other markets.

BusinessToday: How has the demand for e-commerce changed things in recent years, especially during the pandemic? How has the COVID-19 pandemic triggered the nature of the e-commerce business?

A: To compare with pre-pandemic days, the Covid-19 pandemic has definitely transformed the business ecosystem. Retailers who depend solely on daily sales were very much in the dark on when they will be allowed to re-open for business during the lockdown. In such foggy and uncertain times, many business owners were coerced to digitalise their businesses in order to ensure the businesses are still able to operate in restrictive times. The emergence of more adopters has accounted for the noticeable spike in e-commerce vendors on online marketplaces.

How these businesses manage their systems and operations plays such an important and huge role in determining the success of the business. This is also where it comes in handy – when we understand the trend, we can benefit from that and optimise the tools and services that further empower your business, both in terms of strategy and how you can leverage your strategy.

On a positive note, the evolution has also transformed the e-commerce sectors and shaped the way consumers connect with brands or vice versa. This transformation has also opened up business opportunities for retailers and has sped up the pace of the industry’s growth. This is because consumers now have access to a range of tools that help them gauge prices, find alternatives, locate stores and receive coupons.

As the industry evolves, the influence that tech-savvy shoppers have in the e-commerce sector is also growing stronger and faster. Consequently, this has also shaped how consumers connect with brands and the demand within the e-commerce sector for the past few years.

BusinessToday: As the demand for e-commerce is unlikely to cease and gaps in the logistics system have been exposed, what do you think needs to be done? How can technology help and what should industry players do?

A: The acceleration of technology has undoubtedly transformed the e-commerce and logistics sectors, especially due to Covid-19. This transformation has also opened up business opportunities for retailers and has sped up the pace of the industry’s growth. This is because consumers now have access to a range of tools that help them gauge prices, find alternatives, locate stores and receive coupons.

How these businesses manage their systems and operations plays such an important and huge role in determining the success of the business. This is also where it comes in handy – when we understand the trend, we can benefit from that and optimise the tools and services that further empower your business, both in terms of strategy and how you can leverage your strategy.

We have seen many e-commerce businesses rise and fall during all these years. As an e-fulfillment solution provider and industry player, we believe in continuously assisting our customers to shift their business online effectively so that digitization can open more doors for opportunities and widen customer base.

As logistics have to adapt due to the increasing demand for Business to Consumer (B2C) logistics, more robust technology is required to provide B2C logistics. This includes real time status update, fulfilment process that could cater to uneven daily volumes, picking accuracy as error margin to consumers is extremely small as well as being able to accommodate special picking for direct to consumer such as Gift with Purchase, Purchase with Purchase or even Virtual Bundling. Hence, this is why our system ODiN is built to handle such requirements for e-commerce fulfillment.

BusinessToday: The government has stated before that it wants Malaysia to become an e- fulfilment hub for the region.  Do you think that is possible? Why or why not? What needs to be done?

A: We feel that it is possible for our country to become an e-fulfillment hub in the region. Simply because the government have set up numerous initiatives in terms of educating SMEs on the transformation or how the e-commerce industry works as many are not aware of what to do.

We feel that this would help educate SMEs to understand the distinctions in online business. However, there needs to be an investment into it; it’s not just a simple matter of launching a website. This is something that many SMEs cannot afford, along with the uncertainty of whether they will even succeed in the first place.

On the same note, in order to further unlock Malaysia’s potential as an e-fulfilment hub, we also need to reach out to SMEs that are currently in the e-Commerce area to grow their operations and unlock additional growth in the global marketplace.

Many Malaysian SMEs, for example, are perplexed with export shipment details and are unable to get low shipping rates seeing as they are new to global e-commerce. Hence, this would necessitate a more in-depth understanding of the challenges they faced and the solution to overcome them. Similarly, we also need to provide comprehensive guidance to businesses who are new to e-commerce on how to set up their businesses online with digital marketing techniques such as coordinating pilot programmes to help these potential businesses thrive.

As the industry is much more complex now since it has turned competitive, creating a space like this where upcoming entrepreneurs are able to understand e-commerce business better is not only a good measure, but it could also lead towards the creation of the next successful venture in Malaysia.

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