E-commerce is a bogeyman for many retail stores. While big players like Walmart and Costco have the resources to invest heavily in e-commerce, the bulk of the retail landscape — consisting of smaller retail chains that eke out a small profit — have no such luxury.
Then there’s the problem of showrooming: Where consumers visit retail stores to compare prices, and then end up buying the item from a rival e-commerce store.
For frustrated retail companies, Singapore startup Anchanto has a solution. It has been working on Ship.li, a tool that takes the complexity out of e-commerce and lets shops go online while focusing on what they do best.
“Think of it as Amazon Sellers with the goal of 99 minutes delivery”, said Vaibhav Dabhade, co-founder of Anchanto. To be absolutely clear, Ship.li’s ambition is still something it’s working towards, and they would start by offering the service only to premium items such as branded handbags.
As a classic two-sided platform, Ship.li is envisoned as a massive online storefront selling anything from groceries to fashion items to electronics. It offers consumers the choice of either delivery to their doorstep or pick-up at the retail stores.
It is also a self-serve, free-to-list platform where brands get their own Ship.li webpage and receive an integrated tool to digitize their inventory. Think of it as a portal into Anchanto’s own logistics backbone.
The promise of 99 minutes delivery is unprecedented in Asia, which doesn’t exactly have the most e-commerce-friendly logistics companies.To make it possible, it has developed a logistical tracking system to monitor the status of its delivery fleet, orders, and inventory. It is even exploring the idea of crowdsourcing some of its deliveries by engaging delivery assistants who would be paid to move goods in their free time.
It’s an idea that Silicon Valley startup Instacart is perfecting, and it has in the process raised Series A funding of USD 8.5M from top venture capitalists.
“In the future, we could potentially bring delivery times under 60 minutes,” said Vaibhav.
But before it can work on speed, Anchanto needs to prove that it can sign up merchants in bundles and keep them on its system.
Anchanto’s off to a good start. It secured its first big customer, traditional Chinese medicine brand Eu Yan Sang, for FACO — a platform that, unlike Ship.ly, caters to the bigger international retailers. Currently, it is processing about 430 orders a month, and the startup will increase its capacity soon.
Ship.li is currently in closed beta, with 12 retailers and about 150 brands on board. Merchants will be charged on a per-order basis, while consumers will enjoy free same-day deliveries. The company aims to launch the platform to the public in early September.
Logistics is an obsession for Anchanto right now. ”There’s no point doing e-commerce in Singapore if you don’t own the logistics,” said Vaibhav, an approach that sets it apart from eBay, Qoo10, or ShopAbout.
He is convinced that delivery in under 99 minutes is currently impossible through partnerships with couriers. Developing its own system would mean there’s no need to integrate with third-party systems.
Whereas working with a partner would restrict its primary contact point to the account manager, having its own system lets Anchanto gain control, full visibility behind the process, and the ability to pick up orders immediately with less delay. It could train its delivery team to exacting standards and quickly make corrections should things go wrong.
Current delivery service providers in Singapore are just not in tune with the needs of today’s e-commerce companies. They’re not flexible enough when it comes to size, weight, and timing restrictions, which runs counter to an online department store’s variety of items of various shapes and sizes.
“For e-commerce companies, their single point of face-to-face interaction with the customer is through the delivery person. Why outsource that?” said Vaibhav.
While rising in visibility only recently, Anchanto has actually been around since June 2011. Vaibhav, the CEO, has a logistics family business in India. He is joined by co-founders Shafique Muhammad from Pakistan, as well as Shivanand Kokate and Abhimanyu Kashikar, which hail from India.
The company has experienced its fair share of challenges. With a team that is split between Singapore, Pune in India, and Canberra in Australia, it initially developed a prototype that failed to gain traction. To make ends meet, it developed software for clients out of India, while at the same time devoting time to its own products.
By October 2012, Anchanto launched its e-commerce platform, and five months later set up warehousing and logistics operations in Singapore. In May 2013, it announced a six-digit fundraising round involving Chang Sau Sheong, director of Cloud Computing at HP Labs and ex-director of Engineering at Yahoo!, as well as Akshay Mehra, principal at Innosight Consulting and formerly a marketer at P&G.
Anchanto decided to focus on the Singapore market due to its high web and mobile penetration as well as controllable logistics and e-commerce costs.
The startup is seeking to raise another round of funding to expand its infrastructure and grow regionally. It is finalizing a partnership with a regional logistics and shipping company to open in Brunei, a neighbouring country in Southeast Asia. The partner already has logistics operations in the oil-rich Sultanate.
Brunei is certainly an unconventional choice for startups due to its small population of about 400,000. But Viabhav says the lack of competitors makes it a compelling option.
“People in Brunei are cash-rich but choice-poor.”
Regional expansion notwithstanding, Anchanto is about to undergo another test: Gaining traction amongst consumers in an increasingly-crowded e-commerce landscape. It’s absolutely crucial for the startup’s success, since a retailer’s willingness to stay on the platform and manually digitizing its own items largely depends on its ability to sell on Ship.li.
End-users are bombarded with options that meet their online shopping needs, ranging from familiar brands to online indie stores hosted on blogsites and Shopify. Rocket Internet has even jumped into the storefront platform game with Lazada Marketplace, and they already have a high-volume logistics set-up in place.
Anchanto is betting that Ship.li can stand out with a superior experience and what it hopes are faster delivery times. But with competition rising in tandem with demand for online shopping, the company’s success is no sure bet.
We are living in heady times for e-commerce with unprecedented money pouring into the region. As a result, it’s not just enough to sell online, but to do it with top-notch customer experience.
Anchanto is part of a new breed of startups that wants to make e-commerce more of a delight.