The profitable startup connecting brands with parents in SEA

In The Checkout this week, we examine why brands are looking to a Singapore-based startup to reach parents throughout Southeast Asia. [Read from your browser]( The Checkout 🛒  --------------------------------------------------------------- Welcome to The Checkout! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in ecommerce. You can find past issues [here]( or [sign up here]( to receive future newsletters. Also, If you’re not a subscriber, get access by [registering here](. IN FOCUS In today's newsletter, we spotlight: - [Why over 200 brands, including big names like Kraft Heinz and Huggies, are working with this parent-focused startup]( - Why Coupang’s rescue of Farfetch may not fix the luxury marketplace’s underlying problem - Who stands to benefit most from the [TikTok-GoTo deal?]( --------------------------------------------------------------- Hello {NAME} I’m lucky to have been born in Singapore. The ease of travel, a strong economy, and amazing food are some of the perks of living here. Things just work, and that’s something we often take for granted. However, it’s always good to be reminded of just how small Singapore is, which puts things in perspective. It’s easier to run a country well when you can travel from one end to the other in slightly over an hour. Reading my colleague Melissa’s article on parenting platform Supermom, which is this week’s featured story, was such a timely reminder. There are 39,000 newborn babies in Singapore every year, compared to 5 million in Indonesia and 1.3 million in Vietnam. This is why Supermom, which connects brands with parents, has plans to deepen its operations across Southeast Asia, although Singapore remains a significant market in terms of revenue. The Singapore-based firm has been profitable since 2015, with the exception of 2020, and is expecting to close 2023 in the black. Meanwhile, in this week’s Hot Take, I take a closer look at Coupang’s asset acquisition of the fallen luxury retail platform Farfetch. We’d also like to take this opportunity to wish our readers happy holidays! The Checkout will be back on January 11, 2024. -- Simon  --------------------------------------------------------------- THE BIG STORY [This startup hit the mother lode by tapping into the power of parents]( Supermom enables parents to earn supplemental income from surveys, branded content, and more. ---------------------------------------------------------------  THE HOT TAKE Farfetch’s $500m lifeline not guaranteed to save it Here’s what happened: - Coupang [announced]( that it was acquiring the business and assets of Farfetch Holdings earlier this week. - The South Korean ecommerce platform is offering Farfetch US$500 million in capital. - As part of the deal, shareholders in Farfetch will be wiped out and the company delisted from the New York Stock Exchange. Here’s our take: After being on the brink of bankruptcy for months, luxury fashion marketplace Farfetch is being acquired by Coupang, the South Korean ecommerce giant. But news of the deal comes as cold comfort to Farfetch’s long-suffering shareholders. The firm’s US-listed shares have fallen by 99% from a peak of US$73 in February 2021. They were trading at US$0.64 before the deal with Coupang was announced. As part of the deal, Coupong will acquire Farfetch’s assets, not its equity, which means that the value held by Farfetch’s shareholders will be all but wiped out - no one said investing in tech was risk-free! New York-listed Coupang may see some upside from the deal, which gives it a foothold in the luxury segment and access to Farfetch’s large customer base in the US, where Coupang’s business is [small](. South Korea, where Coupang is headquartered, is an attractive market for luxury goods - it has the world’s [highest per-capita spending]( on personal luxury products. The company can certainly afford the deal’s price-tag - it had nearly US$5 billion in cash on its [balance sheet]( as of September 2023 and generated over US$500 million in free cash flow in the third quarter of this year. So far, so good. However, this cash cushion, in addition to Coupang’s operational and logistics capabilities, may not be enough to fix the underlying issues at Farfetch. One of which - because the company does not own inventory - was its [struggle to convince luxury brands]( to sell through the platform. Many brands prefer to maintain control over their product and sell them directly instead of through third-party marketplaces. This is often over concerns about the discounting tactics on these platforms and how consumers might perceive their brands. Coupang, as the “Amazon of Asia,” may be well-versed in selling items from fashion, electronics, to health supplements, but it doesn’t have experience in luxury retailing. Given that, it’s hard to see how it can now convince luxury firms to sell on Farfetch if they weren’t already inclined to previously. Add to this an uncertain macroeconomic environment that’s [hit demand for luxury products]( and the chances of a revival in Farfetch’s fortunes seem somewhat … far-fetched.  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ [Indonesia’s Evermos sues ex-employee for founding competing startup]( The social commerce firm says Reynaldi Gandawidjaja, founder and CEO of Orderfaz, violated a non-compete clause in his Evermos employment contract. 2️⃣ [Indian B2B unicorn Udaan sacks at least 100 employees]( This comes a week after the ecommerce platform raised US$340 million in series E funding. 3️⃣ [Shopee gets approval to acquire Blu’s credit arm in Brazil]( The move is part of Shopee’s strategy to provide credit directly to its customers in the country. 4️⃣ [Delivery Hero trims Berlin workforce, closes Taipei, Istanbul tech hubs]( The move is part of its restructuring plans to boost efficiency and pursue long-term growth, according to an internal email seen by Tech in Asia. 5️⃣ [Alibaba pours $634m into Lazada as competition heats up]( With this investment, the Chinese tech titan has injected over US$1.8 billion in total into Lazada this year.  ---------------------------------------------------------------  FYI 1️⃣ [How the TikTok-GoTo deal could shake up ecommerce in SEA]( TikTok has doubled down its bet in Indonesia by acquiring a 75% stake in Tokopedia. The implications will likely reach beyond the nation’s borders. 2️⃣ [Legal woes, police reports trail woman linked to ex-Foodpanda CEO’s exit]( Multiple alleged victims have filed police reports and lawsuits against Rebekah Rankine for owed monies, stolen or damaged properties, and harassment. --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you soon! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. 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