Philippine digital startup CashCashPinoy is planning to get people to experience online shopping. For this, one of the company strategies is introduce the option of cash-on-delivery, shortly.
Funded recently ($2 million) by the Singapore-based PE firm Hera Capital, the mobile e-commerce platform plans to use the funds to strengthen talent as well as marketing, which will enable its local expansion.
In an exclusive interview with DEALSTREETASIA, CashCashPinoy CEO and Founder Frederic Levy shared the plan that will let the company implement some of its new business strategies and spoke in detail about the local startup community.
How did CashCashPinoy began?
We opened our site in September 2010. We’re three French guys who have long digital experience in the Philippines and have a network of contacts in a lot of brands. We started the company when we saw that online users were growing. Initially, we invested ourselves then later on some business angels, mainly foreign nationals from UK, US, and France invested in the business. This was followed by a couple of investors -entrepreneurs in the Philippines. Our first seed funding was in 2012 at $1.5 million and the last one in 2014 at $2 million.
Also read: CashCashPinoy raises $2m from Hera Capital
How is CashCashPinoy running right now?
It’s good. It has 120 plus employees and keeps on growing. We are really trying to cover everything, from sourcing to logistics and everything in the middle. The company even has a photo studio taking pictures of all our items, including a team of writers, among others.
Our market is 99.9 per cent in the Philippines. We roughly have around 1.5 million members and we’re closing 13,000 to 25,0000 transactions per month. In 2014, over 63 per cent of previous customers have done repurchases. So a big bulk of the people are redoing it; it will be one of my key KPIs this year.
We have an after sales survey sent to all our buyers, to get their feedback, service experiences, and about 94 per cent are extremely satisfied.
What are your business targets this 2015?
Our main idea is to keep on growing and that’s why we went to look for cash last year. CashCashPinoy is focused on the local market; we will also get more involved in provinces. Around 85 per cent of our transactions are in Metro Manila and there’s a huge space for us in the provinces.
We’re also planning to convince more people to experience e-commerce. For this, we are launching the cash-on-delivery this month.
We are not a traffic website, but are number-based. People choose to subscribe to us like a club. We have to take care of them as number. So the goal is to keep on improving the number experience of CashCashPinoy.
How many investors do you have and what are your plans in using your funds?
Right now, we have two groups as our main investors – angel investors and a private equity fund. The big part of our funds is dedicated to marketing and visibility. Originally, we grew organically — mainly due to word-of-mouth.
Now we have decided to get more deals, and re-establishing our product aspect, which represents 80 per cent of our revenue. We want to reinforce our number one position on the product flash sales aspect.
Another thing would be on infrastructure. When you grow, a lot of your team has to grow too. The company wants to expand its sourcing team. A significant amount of money has been spent to ensure quality sourcing. For example, we have a team dedicated to just checking of the items.
If you’re not validated by our sourcing team, if you do not have a meeting with them etc – you cannot open an account with us. We reject 90 per cent of the merchants who contact us- mainly, because they do not meet our standards.
On other sites you can post the pictures you want, the text you want, it can be misleading. Here, we control all the content. So picture, text, everything is done by us.
We are big on authenticity. We are one of the few sites that is covered by authenticity guarantee. That means when you buy an item on CashCashPinoy and you have a doubt, you don’t have to explain, justify. We have a no-questions-asked-refund policy.
How much do you spend on R&D?
We have developed our own platform since the very beginning. We don’t have a team dedicated to R&D, but we are developing our own tool, when it makes sense.
Do you have plans for overseas expansion?
Not yet. Every country is really different, the market, the payment system, importation aspect is extremely different. Customer behaviors, and most especially the language too. For me, it is very tricky to consider that, and besides we have a strong knowledge in the Philippines. There is plenty of opportunity here.
What is your strategy to achieve your goal in capturing the provincial market?
Number one to consider is the specificity of the province market. The launching of the cash-on-delivery is part of that, and communication with more people in the provinces. We are also going to deeply analyze the products that have traction in the province market. Hopefully we’ll be able to find the right recipe.
How do you see the startup environment today in the Philippines?
It’s really getting interesting. There’s a lot of young but experienced people who are considering startups. There are more and more projects and that is good, but there is still lack of maturity on some of the projects.
The country’s infrastructure is challenging. There are a lot of challenges when you launch a digital startup in e-commerce. The startup environment also needs cash to grow and there is obviously a lack of funding in the Philippines. If you are talking about small fundings, there’s a couple but not a lot, but as soon as you look for bigger amounts, it’s extremely complicated.
Many investors are not aware about the Philippines. So you must first convince them about investing in the country before they invest in your business.
Still, today is definitely a much better environment compared to four years ago.
What do you think should be the right attitude of a startup founder?
There is no benchmark, even for mistakes that you should avoid, there’s none. There’s a lot of opportunity but again it is not as challenging as a mature market would be . As a CEO, I consider myself as ‘Chief-Everything-Officer’. You really need to be good in everything, not excellent in something in particular. You need also to consider that you will probably have to work more and also do a lot of things in-house as it’s pretty tricky to outsource when it’s a pioneer market.
Related story: CashCashPinoy cleared of fake goods sale charge