Soldgers, a Singapore startup operating penny auction sites Sold.sg and Sold.my, has expanded to the Philippines through a licensing partnership with IP Ventures, a public-listed internet, mobile, payments, and online games company.
Together, they operate Gamers.ph, a penny auction site selling game titles, gaming gear and equipment at up to 80 percent off the retail price. One of their key suppliers is X-Play Online Games, an IP Ventures subsidiary and a video games publisher and distributor.
The site is scheduled to go live today.
To bid on Gamers.ph, users must buy tokens using real cash, although for a limited time the company is offering free starting tokens for users that sign up.
All auctions start at PHP 0.00, with every bid increasing the price by 15 cents and the timer by 20 seconds. The last bidder when the countdown hits zero will have the right to purchase the item, which the company says is usually above 60 percent off retail price. The website makes money whenever users buy tokens or pay for the items they won from an auction.
Delivery, which is free nationwide, will take 3 to 5 days if within Metro Manila and 5 to 7 days elsewhere. Users can pay using GCash, SmartMoney, debit with BancNet, PayPal, cash on delivery, and over the counter.
According to Qiuyan Tian (LinkedIn), co-founder of Soldgers, the company chose to enter the gaming vertical because they have noticed that hardcore users on the auction model are also gamers.
“It caters to the whole gaming psyche,” she says.
Their decision to launch in the Philippines after Singapore and Malaysia was due in part to the IDA iStart program, an initiative by the Singapore government to introduce business partners. Through the program, they met IP Ventures, which they compatible in terms of chemistry and objectives.
While many penny auction sites have opened in the Philippines, most of them are no longer active. Pinoy Tiangge appears to be the most popular, and while Happy2bid amassed quite a following, its Facebook page is no longer active.
Generally, the credibility of penny auction sites have taken a hit due to the number of complaints that have been made against them. It is possible that because of its pay-to-play nature, users may end up paying lots of money for tokens but fail to win any auctions.
“In Europe, this type of business doesn’t have good reputation. There’s a history of scams and huge track record of complaints, for example, ‘amazing’ delivery costs billed to the winner,” says Frederic Levy, CEO and founder of CashCashPinoy and VP of the Digital Filipino Commerce Association.
He adds that because of the dubiousness of these businesses, such activities are strongly regulated in France. Consumers are not protected as most of these sites are based overseas, which means they should be extremely careful about participating in penny auctions.
As it expands, Soldgers will need to work on winning the trust of consumers, and having local partners like IP Ventures will help. The startup also has mechanisms in place that might dent possible criticisms.
Like eBay, Sold.sg has a ‘buy now’ button that lets users to purchase the item immediately and regain any tokens that were spent on bidding for the product. It has also expanded into direct e-commerce, making it less reliant on the penny auction model.
The company was started in Singapore in 2010 by Qiuyan and Angeline Tham, both former investment bankers. Since then, it has raised USD 0.77M in funding and was expected to hit USD 2M in revenue in 2012. It is now seeing revenues split evenly between their Singapore and Malaysia sites.
Beyond the Philippines, Soldgers is exploring Indonesia as an expansion market, and is looking to raise a Series A round to accelerate it growth.