Malaysian startup Kaodim has announced that it will cease all operations on July 1, 2022. Co-founder and CEO, Choong Fui Yu, stated this in a post published on Kaodim’s official blog yesterday.
Briefly, Kaodim is an established Malaysian online home services marketplace which launched in 2014. Its platform links everyday people with service providers such as handymen, general contractors, personal trainers, and more.
When we interviewed them in 2015, Fui Yu reported that Kaodim was able to fulfil over 150,000 transactions back in 2015, leading to its expansion in Singapore, and subsequently, Indonesia, and the Philippines.
“We became the leaders in the home services space and were privileged to be backed by some of the best regional and international investors,” Fui Yu wrote in his latest blog post.
With a heavy heart, he reflected:
We created job and business opportunities worth hundreds of millions for our service providers. Crucially, we did so by empowering and helping them improve their craft, so they could in turn deliver better services to customers. This is something that we will always care deeply about. We hope and believe that these improvements will endure with them, even after Kaodim.
Choong Fui Yu, co-founder and CEO of Kaodim
What went wrong?
The prolonged lockdowns brought upon by COVID-19 halted the home services industry, as individuals feared welcoming outsiders into their homes, mitigating the possible spread of the virus.
Fui Yu explained that Kaodim’s decision to shutter its doors now was due to the pandemic, which lasted for over two years. This resulted in operational disruptions, labour shortages, and high running costs, which have greatly impacted both its business and quality of service.
He added that the company’s situation continued to worsen due to ever-rising costs and inflation.
“This has affected customer demand, service provider fulfilment, margins and in turn, our earnings,” Fui Yu wrote. “Ultimately, we feel that we can no longer grow the business meaningfully for the long term, in line with our mission and ambitions.”
Validating the above observation, commenters on Facebook have also claimed that the high cost of service providers listed on Kaodim are priced higher than the market rate for similar services.
Another commenter pointed out that service marketplaces face one major challenge, in that customers are able to get in direct contact with the service providers, hence mitigating the need for transactions via a third-party platform.
When I reached out to ask Fui Yu if Kaodim had ever considered a pivot before shutting down completely, he declined to speak to Vulcan Post at the moment.
Honouring stakeholders
The CEO further stated in his blog post that Kaodim will honour its obligations to employees by providing notice and severance payments.
Addressing the company’s customers, service providers, investors, and partners, Fui Yu disclosed that ceasing operations was a better call than compromising on the level of service the team has upheld all this while.
He iterated that the quality service they’ve striven for has been the driver of Kaodim’s growth, reaching up to US$17.6 million in total funding after major successful funding rounds in its heyday.
As noted in Kaodim’s updated FAQ page, all accounts and data registered under the company will be deleted after June 30, 2022.
Furthermore, bookings between customers and service providers will no longer be managed by the platform after June 30. It also made clear that all payments must be made directly to the service providers via cash or inter-bank transfer.
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Kaodim operates in a highly competitive space, as consumers have plenty of choices to choose from. Not to mention the above point where both parties can establish direct communications without the need for an outsourced bookings platform.
The list of options is endless, some of them including Recommend.my, ServisHero, TheLorry, with more mushrooming over the years.
Operating in such a highly competitive industry does have its challenges. No matter the service consumers are looking for, there’s bound to be a platform already filling the gap, whether Malaysian-established or not.
It’s always sad to see a Malaysian startup whose journey we’ve been following from the start depart from the scene, but we wish Fui Yu and the rest of the Kaodim team all the best in their future endeavours!
- Read Kaodim’s official statement here.
- Read Recommend.my’s farewell letter to Kaodim here.
- Read about other Malaysian startups here.
Featured Image Credit: Kaodim
