HK startup taps AI to cut return costs for online retailers

Hong Kong-based Return Helper, which offers cross-border ecommerce return services for online retailers, is integrating AI following its recent fundraise.

The company has secured US$1.8 million in new capital, bringing its total pre-series A funding to US$3.3 million. The round was led by Hirac Fund, a seed fund operated by Japanese VC firm Money Forward Venture Partners, which Return Helper credits with aiding its expansion into Japan.

With the new funds, the startup plans to pilot an AI-powered feature that will provide online retailers with insights on the most cost-effective options for handling return requests.

Return Helper co-founders Roy Wan (left) and Paco Wong / Photo credit: Return Helper

Founded in 2019 by CEO Roy Wan and CTO Paco Wong, Return Helper helps cross-border ecommerce firms streamline the return process and reduce associated costs. For example, it can consolidate returned items and ship them back, or collaborate with partners to resell or recycle them.

Currently, about 8% of its clients are based in Southeast Asia. It expects this number to grow as more sellers in the region target cross-border markets.

The company says that its clients can save up to 50% of the costs typically associated with traditional cross-border return processes. Notable retailers working with it include Cupshe from China, SaturdayClub from Singapore, and Casetify from Hong Kong. 

Return Helper is also planning to develop a carbon footprint calculator, which it says has been driven by growing demand from clients seeking to reduce their environmental impact by locally recycling returned products.

“Some of our clients really want to achieve a certain ESG milestone, so we’ll provide them with data points and a calculator to let them quantify how much carbon footprint they can save by using our services,” Wan tells Tech in Asia in a recent interview.

The startup operates on a pay-as-you-go business model, charging clients logistics and processing fees for each return request. Its revenue comes from the price difference between what it charges customers and what it pays to partner logistics and warehouse providers.

Return Helper says it works with over 40 logistics companies and around 15 warehouses worldwide. Currently, it processes approximately 70,000 returns per month, and Wan expects the total number of returns to reach 1 million by the end of the year.

In 2023, the company reported nearly US$7 million in revenue, doubling its earnings from the previous year. Wan anticipates another 100% revenue growth in 2024.

Return Helper is not yet profitable, but its CEO notes that the company expects to break even by the fourth quarter of 2025, with profitability anticipated the following year. With its latest funding, the startup has about 15 months of runway.

“We have the money to sustain us all the way to profitability,” says Wan.