ShopSpot, a graduate of the inaugural 2012 JFDI Asia Bootcamp accelerator, has announced a pair of significant updates after revealing that it has extended its seed funding round and pivoted its C2C marketplace — available via an iOS app or the Web — to a B2C model.
ShopSpot is incorporated in Singapore but was founded by seven young Thai entrepreneurs and has an office in Bangkok. The startup initially raised an undisclosed seed funding round, put together by a group of Thai angel investors, in April 2012. Now it has revealed that the total has been increased to SG$779,000 (approximately US$630,000) with the addition of investment from Jungle Ventures — via the Technology Incubator Scheme (TIS) of National Research Foundation, Singapore — and SingTel Innov8.
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The additional capital comes from Jungle Venture’s $10 million ‘super angel’ fund announced in October, and the $150 million fund from SingTel’s Innov8 investment arm. In addition, the company has welcomed Thomas Clayton, CEO of Bubble Motion, to its board of advisers. ShopSpot CEO and co-founder Natsakon Kiatsuranon tells TNW that the US entrepreneur — who runs the ‘Twitter for voice’ service that has 25 million users and is backed by Sequoia Capital and others — has already had a big influence on its plans.
Kiatsuranon reveals that the new additions to the round were actually finalized last year, but the process was held up by administrative delays from the NRF. He further explains that ShopSpot had spent the past few months working on a pivot since its C2C e-commerce mobile app was “not as popular in Southeast Asia as the model is in the US”.
Indeed, neither eBay nor any similar sites are not mainstream in the region — due to various reasons, such as culture and payment gateway issues — so ShopSpot is taking its cue from the rise of ‘unofficial’ social commerce on Facebook and other sites. It aims to provide a central ‘marketplace’ that gives merchants a platform to reach customers, and buyers a wide choice of items.
“There is huge demand for an alternative to Facebook shops, from both merchants and shoppers who want a proper experience on mobile,” Kiatsuranon explains.
Initially, the service is available in Thailand only, which Kiatsuranon says will serve as a “test bed” ahead of a potential wider Southeast Asia rollout. Merchants are not charged a cent (or Thai baht) to use the service, which does not include in-built payment support, meaning payment must be arranged between seller and buyer: cash on arrival or bank transfer being the most popular.
Once the revamped service has been going long enough in Thailand to provide insight, the team will look to introduce a payment option, and monetization possibilities. The site will remain free for merchants at the most basic level, but will include an option to pay to highlight their store or products through advertorial, or using more traditional ad spots.
The original ShopSpot service — which aimed to make e-commerce as simple as a tweet — was an interesting one and though the app was well polished, it always seemed to lack a wide range of quality content for sale. It’s interesting to see that issue addressed but there is a big challenge to succeed as a mobile commerce marketplace.
Thailand has already seen an explosion in ‘unofficial’ social commerce as small merchants and e-tailers reach out to customers using word-of-mouth services like Facebook, Twitter and popular chat app Line. Typically, a transaction sees a buyer notify a seller of their wish to buy product X, after which the merchants provides their bank details and payment is transferred before the product is later dispatched.
The existing system is fairly convoluted and not particularly reliable, but it works for many since it goes through social channels that they use daily — Facebook has some 18 million registered users in the country while Line has passed 10 million downloads there.
That level of growth is in ShopSpot’s wildest dreams, but the service will need to gain decent traction between sellers and buyers if it is to turn what is a good idea into a valuable service.
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