All companies have not been spared the effects of the pandemic, but some certainly fared better and have even been positively impacted.
Thanks to the e-commerce boom in the second and fourth quarters of 2020, e-commerce fulfillment providers were among the players in the industry generating great returns.
Fadhli, founder and CEO of LetMeStore, told Vulcan Post, “We have seen MOM growth of nearly 20-30% in terms of the number of packages. Since March 2020 we have broken our record high for the number of packages per month almost every month. “
But even before the pandemic, the 4-year-old company recorded stable business growth. Compared to 2019, the number of onboard merchants increased by almost 100% and the year-over-year growth for the number of packages they process per month is almost 300%.
They serve 2 segments of traders:
- Corporate customers who are mainly established brands selling as official stores in major marketplaces like Lazmall and Shopee Mall.
- Online sellers in the social commerce scene who are often active on Facebook, Instagram and other social media platforms.
The latter is more of their main segment and LetMeStore benefits them by doing all of their compliance duties and letting the sellers focus on sales and marketing.
Not enough ecommerce fulfillment players yet
Since they have positioned the company strongly in the social commerce segment, they mainly work with merchants who use the stockist agent system. Hence, they need to take a different approach than dealing with Lazada / Shopee sellers.
“One of the biggest challenges is that merchants in this category typically don’t have a proper system to manage their orders and fulfillment. The only communication points are WhatsApp and Facebook, ”said Fadhli.
LetMeStore had to use completely different methods and tools to operate them and developed an e-fulfillment system that is specially tailored to their needs.
The team behind LetMeStore / Image Credit: LetMeStore
Many other ecommerce fulfillment providers have developed their own management systems for merchants as well, so this seems like a fairly common practice.
For someone outside the industry, the end-to-end ecommerce fulfillment sector seems to be saturated as well, while in Malaysia we have a saturation of ecommerce players.
But Fadhli disagrees. He said the Malaysia e-commerce market is growing more than 20% year over year, and research around the world has shown the pandemic accelerated the shift from physical retail experiences to e-commerce by 5 years.
“In my opinion, there are still insufficient players in the market to keep up with the growth,” said Fadhli.
“At this point, I think the cake is big enough for everyone. However, within this short period of time, we must quickly expand our competitive advantage, as the market will be saturated at some point in the near future. “
Partnerships are an integral part of growth
The decisive factor for their growth was MaGIC, which LetMeStore already managed in June 2016. “We would have almost closed the shop if we hadn’t been selected to participate in MaGIC’s GAP Cohort 3,” recalls Fadhli.
The resident mentor helped them polish their ideas, test them, and eventually convert the company to the current model.
Thanks to the MaGIC events, LetMeStore was able to enter into some partnerships with other startups that were also directly involved in e-commerce.
At one of these events they even met their first investor, Ganesh Kumar Bangah, founder of MOL Global and Commerce.Asia. Since then he has been her mentor and strategic partner.
Working with companies that provide e-commerce management services like the aforementioned Commerce.Asia and Bizapp has also had an impact on LetMeStore’s growth.
Having a similar customer base has helped lower marketing costs as the approach is more targeted and supported by existing data.
Next, they want to expand their services outside of the Klang Valley by partnering with camps that are currently underutilized.
Fadhli said: “With our technical know-how and our cloud-based technology, we could easily turn them into e-commerce fulfillment warehouses.”
“This could potentially help us grow our business at minimal cost by helping the other camps stay relevant. At the same time, it benefits our customers, who can store their products at multiple locations for shorter logistics times. “
To do this, they first need to ensure that their system is robust enough to accommodate the expansion and they are currently developing the expansion module.
- You can find out more about LetMeStore here.
- More articles on e-commerce can be found here.
Selected image source: Fadhli Tahar, CEO and founder of LetMeStore