After social ecommerce’s success in China, Webuy tests the waters in Southeast Asia

A new batch of social ecommerce startups are looking to steal the thunder from traditional ecommerce marketplaces.

While Pinduoduo has captured the imagination of millions, new ecommerce players that have their own way of leveraging social networking apps have emerged in China. Among them are group-buying platforms that rely on local community leaders, who are paid commissions to pool orders via messaging apps in order to get discounts on bulk orders. They also manage customers, handle marketing and order deliveries.

Photo credit: Webuy

One entrepreneur is confident that this model, which has worked in smaller cities in China and India, will take off in Southeast Asia. Vincent Xue, co-founder of shopping platform Ezbuy, launched Webuy in Singapore and Malaysia about six months ago.

“Most social interactions between people are taking place via chats rather than over the phone or a face-to-face discussion,” Xue tells Tech in Asia. “These [chat apps] cover a majority of the population and that’s what we want to tap into.”

Singapore-based Webuy has just received a multimillion dollar round of seed funding from investors including Global Founders Capital, the venture capital arm of German startup builder Rocket Internet, as well as a local family fund. Tech in Asia understands the exact funding size is less than US$10 million.

Webuy plans to hire well-connected individuals within their own communities to operate WeChat and WhatsApp chat groups. Group members – typically friends and neighbors – are recruited via word-of-mouth referrals. These so-called group leaders wield significant influence, each heading teams of 200 members on average, with some managing up to 1,000 people by operating multiple chat groups.

Webuy currently has a network of 200 leaders in Singapore and 50 in Malaysia. Group leaders earn a commission that ranges from 5% for standard products to 20% for new products that require a greater marketing effort.

Xue describes Webuy as a hybrid between Pinduoduo and Chinese group-buying platforms such as Shihuituan and Xingsheng Youxuan.

“The idea was first brought up to us by an investor who invested in the early stages of Pinduoduo,” he recalls. “We saw that we could do something with social ecommerce in Southeast Asia.”

Pinduoduo, which translates to “together, more savings, more fun,” encourages users to pool together purchases to qualify for group discounts. But Webuy’s similarities to Pinduoduo stop at order pooling.

Group-buying models like Webuy and Shihuituan are novel partly because they’re organized around local neighborhoods. Unlike Pinduoduo, Webuy doesn’t handle last-mile delivery to its end users. Instead, it delivers items to group leaders, who organize pick-ups at their own homes. Webuy has also strategically roped in minimart operators as leaders to facilitate pick-ups.

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