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Line-backed iPrice pitches shopping to likes of Grab and Gojek

Comparison shopping startup promises 'real' income right now to ASEAN unicorns

iPrice is backed by ACA Investments, a Singapore-based Japanese private equity fund, and Line Ventures, an arm of Japan's Line Corporation. (Photo by Dylan Loh)

SINGAPORE -- A Kuala Lumpur-based e-commerce startup is knocking on the doors of Southeast Asia's "superapp" providers in a bid to make itself part of tens of millions of mobile users' everyday lives.

iPrice Group, a cost-comparison platform that disclosed financial backing of $10 million from its Series B fundraiser earlier this year, is using its resources to chase partnerships with the superapps via an online shopping vertical, co-founder and Executive Vice Chairman David Chmelar told Nikkei Asia in an interview.

The term "superapp" is often used to refer to two of Southeast Asia's largest unicorns, Singapore-based Grab and Indonesian rival Gojek, both of which are known for their ride-hailing services but also offer food deliveries, payments and a wide assortment of other services.

"For them," Chmelar said, "we could serve as a great additional source of income. ... What they are facing is that their app ecosystem is not engaging enough."

iPrice has been backed by ACA Investments, a Singapore-based Japanese private equity fund, and Line Ventures -- the venture arm of Japan's Line Corporation, provider of the Line mobile messaging platform that itself is transforming into a superapp to meet the diverse needs of smartphone users.

Line Ventures had led an iPrice fundraising round in 2018, anteing $4 million, Chmelar told Nikkei, with iPrice having drawn another $5 million from other investors. Daiwa PI Partners and Mirae Asset-Naver Asia Growth Fund were also involved in this year's Series B round, which opened a $19 million war chest to the Malaysian startup.

South Korean IT company Naver, a parent company of Line, has agreed with SoftBank Group's Z Holdings to merge Yahoo Japan and Line.

Hajime Adachi, a principal at ACA Investments, told Nikkei that iPrice's strength lies in a unique aggregator role that gives it an ability to coexist with Southeast Asia's online shopping portals on a common platform, instead of having an exclusive partnership with one player at the expense of another.

He said this offers superapp providers a valuable business proposition -- the opportunity to easily spin off a moneymaking arm through an e-commerce function. "Once [the superapps] choose one e-commerce player as their partner," Adachi said, "they will lose others. But if they choose iPrice, they will not lose any e-commerce platforms because iPrice covers everyone."

Online shopping has been on a hot streak this year, with the pandemic and responses to it acting as growth accelerants across Southeast Asia.

According to a November report by internet giant Google, Singapore state investor Temasek and U.S. consultancy Bain & Company, e-commerce has emerged as the largest vertical, growing 63% to reach $62 billion in 2020. It is expected to continue the trajectory to hit $172 billion by 2025, the report says.

According to iPrice, its platforms have experienced 60% increases in traffic since social distancing measures were put in place across Southeast Asia.

Founded in 2014, the startup says it tracks about 1.5 billion products at more than 1,500 merchant partners across Indonesia, Vietnam, Thailand, the Philippines, Singapore, Malaysia and Hong Kong -- offering consumers e-commerce deals in categories like electronics, fashion, toys, automotive, and health and beauty.

Last year, the iPrice platform facilitated 5 million transactions, the company said, adding that it now has more than 20 million monthly visitors. It partners with Southeast Asia's major e-commerce names, including Zalora, Shopee and Lazada.

Heinrich M. Wendel, left, and David Chmelar, co-founders of iPrice Group, discuss business at their Bangsar South headquarters in Kuala Lumpur.   © Dylan Loh, Nikkei Singapore Bureau

Chmelar said partnerships with the superapps would bring about win-win scenarios. His startup would be able to access massive user bases, while the superbrands would be able to tap Southeast Asia's lucrative e-commerce market.

Grab and Gojek have come under increasing pressure to demonstrate a clear path to profitability following rounds of blockbuster fundraising. Since last year's debacle at WeWork, the shared office space provider, investors now give much closer scrutiny to startups' business models.

Chmelar declined to comment on whether his company has held potential partnership talks with Grab or Gojek, citing nondisclosure agreements.

"A couple of years down the road, well, we want to be in every of those [superapp] ecosystems, providing the e-commerce solution," the co-founder said.

iPrice during the first quarter of this year worked behind the scenes to lobby for the superapps to include online shopping as a key function.

Grab and Gojek might have other immediate priorities.

Grab and its partner Singtel this month snagged a digital banking license in Singapore and will be focusing on kick-starting its virtual bank.

In addition, the market grapevine is heating up with talk of a Grab-Gojek merger.

Hirofumi Imamura, director at Daiwa PI Partners, cited an understanding of consumer behavior in Southeast Asia as iPrice's strength, should the superapp providers be open to collaboration. "iPrice has the potential to become the biggest e-commerce aggregator in the entire Asian continent," Imamura noted. "It has been expanding its service with superapps like Line."

The Malaysian upstart's infusion into Line's platform began last year, with Line's Indonesian users able to access a shopping tab to browse a marketplace powered by iPrice.

iPrice gets a cut of proceeds for purchases made through its portal.

Chmelar said that if the other superapps were to introduce an e-commerce vertical similar to what Line has done, iPrice would share its slice of the proceeds it collects from online sales with them. "This is not an idea on paper," he said. "This is not visionary thinking. This is a real thing which is up and running [with Line], and we can scale it up to other ecosystems."

According to the company, its price comparison unit accounted for 50% of revenue, operating at a 30% EBITDA (earnings before interest, taxes, depreciation and amortization) margin. iPrice has a goal of making its other units, including one that provides product catalogs to superapps and another that deals coupons to online media customers, similarly profitable in the next two or three years.

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