Indonesian flash sales startup VIP Plaza snags series A funding to start Southeast Asia expansion

Indonesia’s VIP Plaza, a fashion flash sales site, today announced a series A round of funding from Yahoo Japan Capital (YJ Capital), a venture subsidiary of Yahoo Japan. The amount is not disclosed.

Tesong Kim, co-founder of VIP Plaza, says the new funds will be used to beef up the ecommerce store’s marketing activity and help VIP Plaza reach more consumers across Indonesia. He also says VIP Plaza is looking to expand globally, starting with a brand new office in Malaysia that opened recently.

The funding round marks YJ Capital’s first investment in Indonesia and further strengthens Japan’s status as the most aggressive foreign country feeding cash into the nation’s startup scene.

Indonesia’s “Negative Investments List” – a set of rules that blocks or limits foreign investment in certain local industries, including ecommerce – does not apply to this deal because VIP Plaza is classified as a marketplace portal, one which does not hold stock of its goods. This was also the way that SoftBank and Sequoia Capital were allowed to fund Tokopedia to the tune of US$100 million last year.

Furthermore, that ban doesn’t apply to VIP Plaza, Kim confirms, as the startup is in fact registered and headquartered in Singapore, not Jakarta.

Tesong Kim (left), CEO, co-founder of VIP Plaza. Dita Fabiola (middle), VP of merchandising. Yoga Sades (right), COO, co-founder.

See: 10 things you need to know before investing in Indonesia

Starting with similar markets

VIP Plaza’s first expansion market is Malaysia. Kim credits the mature market and cultural similarities between Indonesia and Malaysia as the two main reasons that make it the most logical place to expand to. “We are going to expand to all the large markets in Southeast Asia in a few years,” says Kim. “By our unique concept, we will be the number one online discount mall for branded fashion and lifestyle products in the region.”

VIP Plaza starts new fashion brand sales every morning at 10am. Kim claims the flash sale strategy has attracted a critical mass of daily visitors from Indonesia, resulting in a 70 percent return visit rate for the site. “Also, we have been attracting the brands by selling a significant volume of their inventories within short periods of time,” explains Kim. “The result is that 400 international and domestic brands have joined VIP Plaza within a year.”