Flash sales start-up to target Southeast Asia

Indonesia’s VIP Plaza, a fashion flash sales site, has secured funding from Yahoo Japan Capital to launch a Southeast Asian roll-out.

Tesong Kim, co-founder of VIP Plaza, says the new funds will be used to strengthen the eCommerce store’s marketing activity and help VIP Plaza reach more consumers across Indonesia. VIP Plaza is looking to expand globally, starting with a brand new office in Malaysia that opened recently, and initially focussing on Southeast Asia.

TechInAsia.com reports that the funding round marks Yahoo Japan’s first investment in Indonesia and further strengthens Japan’s status as the most aggressive foreign country feeding cash into the country’s start-up scene.

Indonesia’s “Negative Investments List” – a set of rules that blocks or limits foreign investment in certain local industries, including eCommerce – does not apply to this deal because VIP Plaza is classified as a marketplace portal, one which does not hold stock of its goods. This was also the way that SoftBank and Sequoia Capital were allowed to fund Tokopedia to the tune of US$100 million last year.

Furthermore, that ban doesn’t apply to VIP Plaza, Kim confirms, as the start-up is in fact registered and headquartered in Singapore, not Jakarta.

VIP Plaza’s first expansion market is Malaysia. Kim credits the mature market and cultural similarities between Indonesia and Malaysia as the two main reasons that make it the most logical place to expand to.

“We are going to expand to all the large markets in Southeast Asia in a few years,” says Kim. “By our unique concept, we will be the number one online discount mall for branded fashion and lifestyle products in the region.”

VIP Plaza starts new fashion brand sales every morning at 10am. Kim claims the flash sale strategy has attracted a critical mass of daily visitors from Indonesia, resulting in a 70 percent return visit rate for the site.

“Also, we have been attracting the brands by selling a significant volume of their inventories within short periods of time,” explains Kim. “The result is that 400 international and domestic brands have joined VIP Plaza within a year.”

The increased spending power of Southeast Asia’s middle-class coupled with rising smartphone penetration in the region are the two things that encourage Kim the most about VIP Plaza’s future. Kim says his site currently gets around 3.5 million page views per month, but he did not comment on the number of active customers VIP Plaza currently serves nor its revenue details.

VIP Plaza currently employs 120 people and hires someone new every two days, according to Kim. The company’s hiring rate has increased since September, when Tech in Asia reported the firm was hiring a new person every three days. Kim adds that VIP Plaza will also be increasing its focus on mobile, as 80 per cent of the site’s transactions are made on mobile devices.

* Republished with permission of Tech In Asia. For more news about eCommerce and technology across the Asia region, visit TechInAsia.com and subscribe to their daily news email.

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