The spirit of group buying has always lived in Singapore’s culture.
From kampung to HDB days, neighbours pool orders for items ranging from fresh fruits, meat and even electronics, and consolidate them into single bulk purchases.
Prices of group buy items are often cheaper than retail prices off the shelves with savings being the main reason why people engage in community purchases.
With the rise of social media, group buy groups have since thronged social media platforms such as Telegram, Facebook and Instagram.
While everyone was stuck at home during the circuit breaker, they turned to group buys to get their hands on highly-coveted products.
Think musang king or D27 durian, the famous banana cake from JB or even Haidilao’s self-heating hotpots.
With that, we speak to Vincent Xue, co-founder and CEO of WEBUY to find out how he decided to create a startup to drive the social e-commerce market in SEA.
Fanning The Social Buying Craze In S’pore
The group buying market is highly lucrative in China and dominated by Chinese e-commerce giant Pinduoduo, which counts Alibaba’s Taobao and JD.com its rivals.
Revenue from community buying is expected to triple to 89 billion yuan (S$18.1 billion) this year from 2018, global research firm Kantar Group Ltd. estimates.
Market consultancy AskCI Consulting Co Ltd said more than 500 million Chinese consumers were using online group buying platforms as of the end of June, almost double the figure from two years ago.
Also biting into the pie is China’s largest on-demand service platform for online deliveries, Meituan. They were testing a new group buying function earlier this year.
Inspired by China’s e-commerce movement, Vincent Xue, co-founder and CEO of Singapore-based social e-commerce startup, WEBUY, aimed to bring this concept to Southeast Asia’s F&B e-commerce scene, where the region’s consumers are driven by influence and the thrill of bargaining.
The idea came from one of my investors who is also an early investor of Pinduoduo and a community group buy platform in China.
– Vincent Xue, co-founder and CEO of WEBUY
In September 2019, WEBUY launched with their first batch of group leaders.
Vincent had earlier co-founded international shopping platform ezbuy where he was chief strategy officer.
On why he decided to make the leap to creating his own startup, the 38-year-old Singaporean said that he has “always had a strong belief in social e-commerce”.
As a result, he decided to venture into the industry to value-add to what is available for a new generation of shoppers.
Eyeing a gap between traditional suppliers and the modern consumer, the social e-commerce platform gives both merchants and consumers an opportunity to source for and provide novel F&B items, while also helping SMEs across Asia expand their business opportunities.
In December 2019, they had successfully sold 4,000 cans of abalones in 4 hours — setting a new record for them.
Social Commerce In The Time Of COVID-19
In February, when Covid-19 was prevalent, they began importing face masks from Indonesia to support all of their group leaders.
We also launched a home delivery service to help customers get daily necessities without having to go out.
We created a web tool to allow customers to book a collection slot from our group leaders to ensure social distancing is implemented.
We provided training and live broadcasts to help the group leaders market the products easily.
– Vincent Xue, co-founder and CEO of WEBUY
Food suppliers also rose up to the increased demand during Covid-19. For example, one of their suppliers, KSP Food used to primarily provide premium meats and seafood to prominent Chinese restaurants before joining the platform.
Amidst the global pandemic, they pivoted their business to include everyday consumers in order to survive the lockdown, expanding their client pool.
Another example is Umamill Co. Ltd.’s curation of unique and authentic Japanese products on WEBUY, which allows customers to imitate the experience of travelling through the random alleys of Nippon, but within the comforts of their homes.
These flavours from Japan’s prefectures are crafted by SMEs in the nation, with preorders for the artisanal Hokkaido-style Ramen by Mochizuki Noodle Factory Co. and the popular Japanese cream rolls by Shinkinedo Co. are oversubscribed.
Jumping on the yearly tradition of durian-feasting, they also successfully sold 2 tons of Bentong old tree durians within a day in the midst of the circuit breaker.
On the back of their popularity, they also expanded to Malaysia and Indonesia this year. Currently, WEBUY supports 3,000 group leaders and 100,000 consumers across Singapore, Malaysia and Indonesia.
In October, the startup also successfully raised a Series A investment round of US$6 million (S$8 million) led by Wavemaker Partners of which the funds will be used to further expand its regional footprint in SEA.
WEBUY plans to expand into Vietnam and the Philippines in 2021.
We plan to recruit a batch of global venture builders and send them to different countries to kick start the business.
We plan to invest US$1 million into our tech team to create a better user experience for all our customers and group leaders.
– Vincent Xue, co-founder and CEO of WEBUY
They have also inked a partnership with TikTok’s owner Bytedance to improve WEBUY platform’s capabilities for the SEA region in Q1 2021.
Convincing Merchants To Onboard Their Platform
However, to convince group leaders to join them at the start was quite the challenge.
Housewives were worried that the WEBUY platform would just take advantage of their resources, and once the business has been set up, we will bypass them.
– Vincent Xue, co-founder and CEO of WEBUY
As a result, they had to visit the group leaders from time to time and share their vision and long-term plan with them.
We showed them how our system is designed in a way that group leaders are crucial to the WEBUY platform and community. We also hired influencers among the group leaders to work full time for us to build the trust and relationship.
– Vincent Xue, co-founder and CEO of WEBUY
Group leaders typically earn a commission that ranges from 5 per cent to 30 per cent depending on the product.
As the group buying model is not all unfamiliar to Singaporeans, they were eventually able to convince them to onboard as group leaders.
Furthermore, the storage and transportation of fresh produce and products also met with challenges for a young tech startup like them, as they “had no traditional knowledge and experience”.
Vincent said that the team had to visit the Jurong fish port late at night just to speak to the seafood distributors in their free time and learn how to keep and pack prawns from them.
How Social E-Commerce Drives Business
As mentioned, the group buying model is not a new phenomenon to Singaporeans as they have engaged in group buying in the last few decades.
Social e-commerce is driven by social interactions among friends and family.
When friends and family share social commerce stores or products, customers are more inclined to trust their recommendations and make a purchase, shortening the customer journey.
Pinduoduo used group buying promotions to incentivise customers looking for good deals. Customers who pulled in friends and family to purchase a product would receive a steep discount as a reward. The new customer would also receive a discount as well.
In fact, by building a relationship based on trust, it helps to bring the community together and customers see group leaders more as a friend than the middleman collating their orders.
Furthermore, group buys offer economical prices, constant discount notifications and pick-up time flexibility through group leaders.
With this, group buying is set to grow in Singapore and SEA as consumers constantly seek out savings, especially in tough times.
It can also be a side hustle for people looking for alternative income streams in times like this as well.
More people will onboard the group buying model as WEBUY drives the SEA market.
With the benefits that come with it, social e-commerce is definitely set to grow in Singapore and SEA in the next few years.
Featured Image Credit: WEBUY