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Before we move on to discuss his current venture, we talk about the “wunderkind” success he has had in the past decade. Mr. Srivorakul, his two brothers and investors, managed to start and sell three businesses and in the process became millionaires.
As the 40-something CEO puts it: “My brothers and I arrived in Bangkok in 2002 for a vacation to visit family and friends. We were astonished to see that no one in Southeast Asia or Thailand was doing anything about the digital media space.”
He continues that after graduating from UC Berkeley, he ended up working at an Internet company called Ask Jeeves; his other brother was a technician at Apple. “It seemed natural that we go into business in Asia, where we could peddle our experience and knowledge from what we learned in the U.S.,” Mr. Srivorakul reflects.
The brothers used credit card debt to fund their first startup, aptly named Newmedia Edge, which they established in 2006. Later, that company went on to be acquired for about US$8 million. Even while running Newmedia Edge, they started a second firm, ad network business Admax, in 2007, selling it to an Indian agency, Komli Media, in 2012 for $36 million.
Mr. Srivorakul started a third venture, Ensogo, in 2010 after seeing the Groupon phenomenon in the U.S. Later, they sold that company to the U.S. social media firm LivingSocial in October 2012. Earlier that year, he had already launched Advent Capital in Thailand, to seed e-commerce firms around Southeast Asia, which sparked his idea to start aCommerce.
Five years later, aCommerce is now the leading e-commerce service provider in Southeast Asia, bringing brands and retailers online to reach consumers in the world’s fastest-growing markets in Southeast Asia. And in the most recent funding round, it raised more than US$65 million. Now the company boasts more than 1,000 staff across five Asian countries, with nine fulfillment centers.
When asked why he decided to set up a “one-stop e-commerce business,” he explains: “Well, when we sold Ensogo we received a total value of US$68 million, half of which was in stock in the company acquiring us and the other half was in cash. So we were fairly lucky to get out, because two months later that business basically bottomed out.” Timing, it seems, is everything.
With cash and investors in hand, the brothers thought about what other kinds of business they could start. “We realized that one of the biggest problems or bottlenecks in the e-commerce sector was logistics,” Mr. Srivorakul says.
Why logistics? “Simple. It was to try to help brands sell — once you saw the product on the website or the marketplace, we could warehouse the items, deliver them to homes and finally collect payment. No one was doing this. In the early days, we had to outsource that to local logistics players and no logistics companies actually understood B2C e-commerce fulfillment or logistics. And so that’s really how aCommerce was born.”
Why “aCommerce?” “Oh I get that question a lot. It means ‘any commerce,’ because we were doing everything. We believed that e-commerce was going to be omnichannel, online and offline,” Mr. Srivorakul explains.
Today, the company provides warehousing, product listing service, website maintenance and design. It also purchased a fleet of trucks to make deliveries.
The company also invested heavily in data analysis. But there was another wrinkle: money. As Mr. Srivorakul explains: “Imagine, cash-on-delivery (COD) accounts for about 60 to 70 percent of the market. If you cannot get the product to the end customer and collect the cash, there’s no point of sale. In Thailand, for instance, credit card penetration is below 5 percent. In other countries, other than Singapore, you’re still looking at maybe 10 percent. So most orders are still COD, and bank transfers come second. So this is why we built a logistics operation for the first three years.”
The CEO confirms that aCommerce has been successful to date, but the team also realized the logistics business was “really competitive.” Undaunted, he realized they needed to evolve the logistics business.
“So that's when we started to really invest in technology in our end-to-end platform. As a result, we can now allow a brand to do multi-location fulfillment. So whether they want to fulfill (an order) from our warehouse, from a DHL warehouse, or from a physical retail store, we’re able to do that,” he explains.
Mr. Srivorakul is keen to point out that aCommerce is different from other online retail giants like Amazon. He believes that while there are a lot of players such as Alibaba, Amazon and GD.com and Shopee, these companies only provide brands a channel for them to sell to their end consumer, but they don't share data.
“aCommerce shares vital data with its customers helping them improve their business, market penetration and sales,” he says. The passionate CEO went on to explain: “We use our multi-channel technology platform that allows a brand to have centralized inventory, but be able to synthesize centralized inventory pricing and content then manage a cost across multiple channels.”
When asked what are the positive aspects about working in Asia, Mr. Srivorakul replies, “I think it’s the pace of how our innovation has evolved. We are actually leapfrogging a lot of the models, whether they’re from Europe or the U.S. Learning from their mistakes and developing our own market has been as fun as it has been challenging. Basically, the sky’s the limit here in Asia.”
If the sky's the limit, what obstacles does he face in developing Asian models? “In a word, it’s regulation. Each market has its own rules and laws, and we have to fit into those requirements. Imagine six markets each with different rules! Indonesia, for instance, requires all sorts of licenses to do business in specific areas, such as medical, food, clothing, and so on,” he says.
Brick-and-mortar retail business are suffering around the world because of e-commerce. How will retail evolve in the future? “Good question. It’s true, traditional retail is under assault. However, I believe that retail is going to evolve into a more entertainment-type model. It will have more shopping experiences. You already see this transformation around the world. In the end they will survive but it will be different from what it is today.”
If e-commerce has shrunk the world because everything becomes the same, with everybody earning the same wages, what is our future? “Well, you know, what I find interesting is that I think that future industries are going to be built really centered around where their natural resources are. Manufacturing is going to stay somewhat commoditized, but with robotics and artificial intelligence it will level the playing field and promote more wealth, both locally and globally. The future is indeed bright. Technology is in the final analysis.”
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