How 3 Ngee Ann Polytechnic Alumni are digitising B2B e-commerce with Eezee

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The digital transformation of the Singaporean economy is set to contribute an estimated US$10 billion to our GDP and increase GDP growth rate at 0.6% annually by 2021 (The Business Times, 2018).  While B2C ecommerce tends to take the spotlight in discussions on digital transformation, B2B ecommerce is actually vastly larger; by the end of 2017, the B2C ecommerce market size was USD 2.14 trillion while B2B ecommerce was USD 7.66 trillion (Shopify, 2018).

To learn more about the B2B market; I had the pleasure of speaking with Logan Tan (CEO), Jasper Yap (CTO) and Terrence Goh (CMO) of Singapore’s leading online market place for industrial goods and supplies; Eezee.

A former project manager of a construction company, Logan experienced the inefficiencies in the procurement process and set up Eezee as a solution. Looking for tech expertise, he approached the Ngee Ann Polytechnic incubator and was introduced to two students; Jasper and Terrence who were running a software consultancy. At that time, these students were looking to shift away from their consulting model as they found little joy in pouring their efforts into a project and then selling it away. Convinced by the viability of Eezee’s business model and more importantly; Logan’s conviction, the two students asked for a stake in the company, which Logan happily agreed to.

Coming a long way from being a “blog-shop”, Eezee now makes purchasing and sourcing a breeze for users and is also a convenient platform for traditional industrial product sellers to integrate e-commerce and online marketing into their business models with just a few clicks, at a fraction of what external consultancies charge.

Trends in the region

When he was handling procurements at the construction company, Logan saw that the market was lacking in transparency and fraught with confusing intermediaries. For example, he could buy a glue gun at a significantly lower price from one supplier but pay a significantly higher price for nails from the same supplier. Therefore his role required him to constantly monitor which suppliers were offering the lowest price for certain products. Given the lack of a common market place to compare suppliers and differentiate between the source and resellers, this task was frustratingly difficult. This is a common problem and according to a global Deloitte CPO Survey, 2018, only 6% of Chief Procurement officers have full transparency of their entire supply chain.

Logan also sees that B2B sellers in Singapore are increasingly setting up online stores, following the digital transformation trend in North America where 94% of B2B executives see ecommerce as critical to business and also that direct web stores are the most common type of B2B ecommerce (Emarketer, 2018). However, this trend has had limited effect on making procurement easier since individual web stores follow the niche of the physical store for example in areas like personal protective equipment and power tools. Therefore it is still up to the procurer to visit different sites and compare prices, much like the traditional process; just done on a computer.

Furthermore, each web store is only able to sell as much stock as it has in its inventory which tends to be inadequate for big projects; since there are cash flow issues in holding high levels of stock. This once again requires procurers to visit different sites to find multiple stores that can suit their needs.

Riding on the trends

To increase transparency and provide a convenient one-stop platform for procurement; Logan set up Eezee to be an online B2B Industrial Marketplace. With this platform, procurers can search for the items that they need and easily compare the different prices offered by different suppliers.

In addition, Eezee is not limited by inventory levels since they do not hold inventory given that they are simply a marketplace for industrial products and supplies. Instead they are able to pool the inventory of all their sellers to offer procurers a plethora of options for their sourcing needs.

Furthermore, Eezee is able to offer better service to both procurers and sellers since they gather a larger amount of transactional data compared to direct sellers. For example, Eezee has historical data on which periods are certain items especially in demand and can predict future demand which can then help sellers plan how much inventory to hold. In the Empowered by analytics| Procurement in 2025 report by EY, 2015, data analytics has been identified as the most disruptive change dimension for procurement in the next decade as it will enable procurers to make decisions using historical, real-time and predictive information. Being an online market place, Eezee can consolidate transactional data from a myriad of sellers and this places them in a good position to benefit from continual advances in data analytics technology in the procurement space.

Challenges

Growth comes from spending, but unlike behemoths like Grab, most of Eezee’s funds come from the founders, which thus requires wisdom in spending; only pursuing opportunities that will yield maximum growth for each dollar spent. Logan gives the example that as an online platform; a sure way to grow their offering is by paying traditional hardware store owners to list on their platform. No seller will turn down free money, but such a strategy is not sustainable in the long term given their limited pool of funds. While this is a challenge, Logan sees this bootstrapping experience as a way to train them to be creative in finding the best use of their funds.

The two talented but young students also face a uniquely Singaporean conundrum; National Service. When both of them bought into the business, they were still schooling and thus could commit time to grinding for long hours at the office. However, enlistment would significantly restrict their schedule. In the face of this, Jasper and Terrence still hold onto their passion for Eezee and have developed succession plans to temporarily pass on their tasks to interns that they have trained.

Challenges also come at a personal level. Singapore is ranked 21st globally in “innovation and entrepreneurship” and this poor ranking has been attributed to our fear of failure (The Straits Times, 2018). In building Eezee, overcoming this fear was a challenge. Jasper recalls that in the first four months of joining, he spent 12 hours every day coding with little to show for his effort. However, he was encouraged by seeing his team members putting in their best as well and he did not gave up. At a certain point, he felt like he was living on auto-pilot; working day after day without expecting much. As a result, when their first sale came in, he could not believe it; even calling Logan to ask if he was the one who placed the order. Grinding at a start-up is more draining than a 9-5 job but yet offers far less certainty of a return. However the victories are sweeter given the knowledge that you have poured your soul into building something uniquely yours.

Expectations are also something that the team has to manage. Quoting the phrase “no prophet is accepted in his hometown”, Jasper shared that he tells his peers that he is a software developer instead of a CTO. As Singaporeans, we tend to be sceptical and it is hard to conceive that someone that we know well; flaws and strengths, can achieve more than the average Singaporean. We also tend to be pragmatists and when we hear that someone has become an entrepreneur we constantly ask about the progress; expecting notable growth and expressing more scepticism if absent. However businesses usually take months to achieve their milestones and years to reach prominence; a fact often overlooked by people outside the start-up space. Therefore Jasper feels that it is crucial for the team to constantly assure each other that despite what others say, Eezee has been and will continue to be the most meaningful adventure that they can embark on together.

Enabling growth

Logan lauds Ngee Ann Polytechnic as being instrumental to Eezee’s rapid growth. Under their incubation program, they have received a fully-furnished office at a very affordable rate. Having an office is important as it allows easy communication and more importantly, builds an air of hard-work and innovation that can only be possible when everyone is physically working together.

The Ngee Ann Polytechnic Incubator has also given them access to big clients which would otherwise be out of reach for Eezee. Attesting to Ngee Ann Polytechnic’s industry orientation, their principal Mr Clarence Ti sits on many different boards. One of the boards that he sits on is the board of future economy and has been introducing the start-ups under the Incubator to the industry veterans on the board. From such introductions, Logan has been given the opportunity to pitch Eezee to large Singaporean organisations and will soon be giving a presentation to the head of procurement of PSA.

To create an innovation eco-system for start-ups to flourish, Terrence feels that we have to be willing to take on more risks. On the same page as Terrence is Prime Minister Lee Hsien Loong, who said last year “If you don’t take risks, you’re going to go nowhere” (The New Paper, 2018). Terrence is encouraged by PM Lee’s statement and feels that our leaders should be a role-model in changing this mind-set by following the example of our first generation of visionaries. A great example is Dr Goh Keng Swee, who transformed Jurong from a land of swamps and fishing villages into the industrial town that we see now. Achieving this was slow and in the absence of much progress for the first few years; cynics called this “Goh’s folly”. However, Dr Goh eventually proved them wrong when Jurong started drawing a deluge of investments and jobs (JurongGRC, n.d.). Despite being criticised, Dr Goh had a vision and he pursued it despite the risks and speedbumps along the way; as we move deeper into the fourth industrial revolution we will need more bold leaders like him.

Call to Singaporean companies

In the Singapore Budget 2018, the government has rolled out a suite of measures to promote innovation and these range from tax deductions to grant schemes (The Business Times, 2018).  However these measures would be meaningless if we Singaporeans are unwilling to become entrepreneurs. Logan, Jasper and Terrence started Eezee with no guarantee that the coming months of exhaustion would yield any results, still they took the leap and today they run Singapore’s leading B2B marketplace. However not all start-ups will enjoy the same success, many of us who try will fail, but knowing this and still having the courage to make the leap is a quality that will usher in future success.

 

 

References

eMarketer. (2018). The Changing Face of B2B Buying and Selling – eMarketer. [online] Available at: https://www.emarketer.com/content/how-b2b-buying-and-selling-is-transforming-as-digital-commerce-grows [Accessed 1 Apr. 2018].

Enterprise Ecommerce Blog – Enterprise Business Marketing, News, Tips & More. (2018). B2B vs B2C Ecommerce: What’s The Difference?. [online] Available at: https://www.shopify.com/enterprise/b2b-vs-b2c-ecommerce [Accessed 1 Apr. 2018].

Enterprise Ecommerce Blog – Enterprise Business Marketing, News, Tips & More. (2018). B2B vs B2C Ecommerce: What’s The Difference?. [online] Available at: https://www.shopify.com/enterprise/b2b-vs-b2c-ecommerce [Accessed 1 Apr. 2018].

EY. (2015). Empowered by analytics| Procurement in 2025. [online] Available at: http://www.ey.com/Publication/vwLUAssets/ey-empowered-by-analytics-procurement-in-2025/$FILE/ey-empowered-by-analytics-procurement-in-2025.pdf [Accessed 1 Apr. 2018].

JurongGRC. (n.d.). Tribute to Dr Goh Keng Swee, the “Father of Jurong”. | Jurong GRC. [online] Available at: http://www.juronggrc.sg/goh_keng_swee [Accessed 1 Apr. 2018].

The Business Times. (2018). Digital transformation to contribute US$10b to Singapore’s GDP by 2021: study. [online] Available at: http://www.businesstimes.com.sg/government-economy/digital-transformation-to-contribute-us10b-to-singapores-gdp-by-2021-study [Accessed 1 Apr. 2018].

The Business Times. (2018). Singapore Budget 2018: Innovation, R&D to get shot in the arm. [online] Available at: http://www.businesstimes.com.sg/sme/singapore-budget-2018/singapore-budget-2018-innovation-rd-to-get-shot-in-the-arm [Accessed 1 Apr. 2018].

The New Paper. (2017). PM Lee: Take risks or go nowhere. [online] Available at: http://www.tnp.sg/news/singapore/pm-lee-take-risks-or-go-nowhere [Accessed 1 Apr. 2018].

The Straits Times. (2018). ‘Kiasuism’ may be factor holding back Singapore’s digital transformation, says study. [online] Available at: http://www.straitstimes.com/singapore/kiasuism-may-be-factor-holding-back-singapores-digital-transformation-study [Accessed 1 Apr. 2018].

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