Inside aCommerce’s plan to become profitable by 2020

In November 2017, aCommerce closed its US$65 million series B round led by Emerald Media-KKR – an important milestone for the company. Since this financing, however, the Thailand-based startup has had to go through a painful shakeup.

Over the past 12 months, aCommerce has shed more than 200 jobs – roughly 21% of its total workforce – and has continued its transition to being a “brand commerce” enabler.

“We discovered the brands’ need for an end-to-end service when they were asking us for help on driving demand generation such as marketing, social commerce, web development, store operations, and data and analytics,” co-founder and CEO Paul Srivorakul tells Tech in Asia.

This transition has meant the winding down of what was a core part of its business: providing single services such as fulfillment and delivery to clients – an area that the company had invested in for a number of years.

In Srivorakul’s mind, such moves were much needed. Like many venture-backed companies, aCommerce has ambitions to launch an initial public offering (IPO) at some point. Continuing to invest in increasingly commoditized logistics services was not the way to build a highly valued, defensible business.

Hence the company has been executing a restructuring plan it dubbed “aCommerce 2.0” in a recent blog post. This plan involves several key pillars but is centered around the company sharpening its focus to only target enterprise brands.

Fast starter

ACommerce launched in 2013, riding on the back of Southeast Asia’s fast-expanding online shopping sector. Having exited a number of businesses in Southeast Asia, including daily deals site Ensogo in 2011, Srivorakul and his co-founders saw gaps in talent and various areas of the ecommerce supply chain.

The initial clients they targeted were mature offline distributors and retailers seeking to go online. Though as the team quickly discovered, launching an online store was not the toughest nut to crack for those clients at the time. It was areas like warehousing, fulfillment, shipping and delivering parcels, and facilitating payment options like cash on delivery.

“It doesn’t matter what you sell – if you can’t get the product to the end-customer and collect payment, what’s the point?” says Srivorakul.

Thinking the market potential was too big to miss out on, aCommerce went ahead and offered a whole gamut of logistics services to bring goods to consumers’ doorsteps. It kicked off with a bang, landing clients like Central Group in Thailand, Store Specialists Inc. in the Philippines, Indonesian conglomerate Lippo Group, which was about to roll out MatahariMall.com, and Japan’s Line, which had a huge base of users for its popular shopping service in Thailand.

Also in 2013, top regional ecommerce player Lazada was on the cusp of a new business model. From purely owning inventory, it was adding a marketplace akin to Alibaba’s Taobao that would allow third-party sellers on the platform. As such, it made sense for Lazada to team up with third-party service providers in giving sellers a menu of services they could choose from to manage their entire journey on the marketplace. Not one to get left behind, aCommerce made the list of Lazada’s earliest delivery partners. As Lazada was making strides, more and more companies jumped on the ecommerce bandwagon. Sea Group’s Shopee, which would eventually become Lazada’s archnemesis, entered the fray in 2015.

As the ecommerce scene got crowded, so did the battlefield for logistics firms, which were aggressively undercutting each other on price to woo clients.

Back to the drawing board

Turning to technology

Hard sell

Fiercer competition