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Qoo10 in talks with malls to scale up online platform

SINGAPORE — Qoo10 is set to embark on an all-new strategy: The leading local online marketplace is forging alliances with shopping-mall owners and big retail chains to scale up its Web-based retail platform in Singapore.

Qoo10 country manager Hyun Wook Cho poses at Qoo10's office on April 20, 2015. Photo: Jason Quah

Qoo10 country manager Hyun Wook Cho poses at Qoo10's office on April 20, 2015. Photo: Jason Quah

SINGAPORE — Qoo10 is set to embark on an all-new strategy: The leading local online marketplace is forging alliances with shopping-mall owners and big retail chains to scale up its Web-based retail platform in Singapore.

TODAY understands Qoo10 is in advanced stages of talks with Paragon to include the mall on its online retail platform and it has also roped in big retailers such as Audio House and Parisilk. This is a huge leap from its earlier strategy of reaching out to small- and mid-sized merchants needing an e-commerce platform for online shoppers.

The move comes as brick-and-mortar retailers increasingly feel the heat from e-commerce, while they battle high rentals, rising staff costs and falling tourist arrivals. Among the more prominent casualties, Marks & Spencer and Cold Storage are shutting their outlets at The Centrepoint, while John Little is pulling out of Marina Square and Tiong Bahru Plaza. Meanwhile, Japanese fashion brand Lowrys Farm has closed its eight outlets across the island.

With 1.6 million registered users, Qoo10 draws a monthly revenue of S$26 million from the Singapore market, up 80 per cent on a year-on-year basis. It now processes about 45,000 transactions per day, up from around 40,000 in April last year. With its new thrust, the company is targeting around 200,000 daily transactions in the next two years.

Mr Hyun Wook Cho, Singapore country manager at Qoo10, said in an interview with TODAY: “As we tie up with mall owners, we automatically add their tenant retailers to our online platform. We are also tying up directly with big retailers. It is a win-win strategy for all. While we are able to enhance our platform, mall owners are able to ensure business for their retailers as in-store pick-up gets a boost with online presence.”

“This further allows brick-and-mortar retailers to focus on their core operations. We expect revenue from this segment to kick in over the next year and eventually pick up pace to account for 10 to 20 per cent of our total business by next year. This strategy is unique to Singapore,” Mr Cho added.

He declined to reveal the mall operators that Qoo10 is in talks with and did not comment on specific alliances.

As the Singapore online market continues to grow, Qoo10 will also be setting up three to four delivery and pick-up points for frozen food.

“For consumers, it will be a cheaper option, while it will be an effective marketplace for small local players that do not have access to big departmental stores for selling their products. Our first such delivery outlet will be at Tampines. We are in the process of finalising other locations,” Mr Cho said.

“We have seen our average transaction size in Singapore grow from S$11 to more than S$20 over the past three years. Singapore is our core strength market as we continue to grow our business across South-east Asia,” he added.

Besides Singapore, Qoo10 operates in China, Hong Kong, Indonesia and Malaysia. Qoo10’s South Korean parent Giosis is a joint venture between the firm’s founder Ku Young Bae, with 51 per cent, and eBay, with 49 per cent.

 

CLARIFICATION: A CapitaLand spokesperson said the company, including its subsidiaries, has not started on talks with Qoo10 on any collaboration. 

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