Thai e-commerce enabler aCommerce eyes Vietnam, Malaysia foray via M&A route

aCommerce management team

Bangkok-based e-commerce enabler aCommerce seeks to expand its operations through the inorganic route in Southeast Asia as it carves out its growth plans beyond the boundaries of its home market, a top company executive told DealStreetAsia.

Going forward, it plans to foray into Vietnam and Malaysia where it’s eyeing consolidation with regional players, said Paul Srivorakul, Group CEO and co-founder at aCommerce. The company has set aside $30-50 million for M&A activities in these two regions.

The company is currently present in three Southeast Asian markets namely Indonesia, Singapore, and the Philippines, besides its home market, Thailand.

“There is an opportunity for us to consolidate some smaller players to expand our geographical reach,” Srivorakul said. “Despite high growth and buzz (in the e-commerce sector), it is still a hard business to get right and requires lots of investment, focus, discipline, and talent…A regional roll-up is interesting as there have only been a few consolidations in Southeast Asia, such as Uber & Grab or Lazada & Alibaba.”

aCommerce recently made headlines for its plans to rake up about $200 million through the IPO route next year – the company plans to undertake its expansion activities thereafter.

Consolidation with local e-commerce enablers in each country will help aCommerce strengthen its business in the regional market, added Srivorakul.

Road ahead for e-commerce enablers

With more consumers gearing up to buy online, e-commerce enablers are expected to witness significant growth. E-commerce enablers provide companies with whatever it takes to sell online.

“Brands are more aggressive in their online strategy and want to focus on direct-to-customers and other distribution channels, not just marketplaces. They have less worry about cannibalizing offline, which means full steam ahead with online. We also see exponential growth in social commerce, and the access to e-commerce data and analytics are increasingly important,” said Srivorakul.

Even as the fallout of the coronavirus pandemic has been looming large on businesses across regions, aCommerce claims to have witnessed an increase of over 50 per cent in its actual revenue in September 2020 from $226 million in September 2019. In terms of the bottom line, he claimed that the company remained EBITDA-profitable during both the second and third quarters this year.

Srivorakul attributes the growth to higher transaction volumes and the increasing AOV (average order value) which stood at an average of $38 for the company, which is reportedly higher when compared to SEA marketplaces that have an AOV of $10-15.  

The growth in this sector is directly proportional to the performance of the burgeoning e-commerce sector. According to Google, Temasek, and Bain’s e-Conomy SEA 2020 report, total e-commerce firms’ Gross Merchandise Value (GMV) jumped 63 per cent from $38 billion in 2019 to $62 billion in 2020. Going forward, it forecasts the number to grow to $172 billion in 2025 as consumers continue to shop online post the COVID 19 pandemic. 

Srivorakul expects aCommerce’s revenue to touch around $240 million this year, a 50 per cent increase from last year. He expects the company to see similar growth and positive net income in 2021 as well. 

“We can easily grow faster than this, but the difference is we do not need to raise any external funds to grow at this rate – we also focus on cash flow and profitability,” he added. 

Founded in June 2013 by Srivorakul and co-founder Peter Kopitz, aCommerce helps brands such as Samsung, L’Oreal, and Unilever sell their products online across Southeast Asia, thereby providing services from web store design, distribution, and marketing to warehousing and delivery.

To date, aCommerce is understood to have raised a total of $119 million. In early 2020, the company raised $15 million from Singapore-based investor Indies Capital Partners. Its other backers include KKR’s Emerald Media, Australia-based Blue Sky Ventures, DKSH, Inspire Ventures, Indonesia’s Sinarmas, MDI Ventures, and NTT Docomo.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.