WITH businesses moving online in droves over the past year, Lennise Ng has been kept busy.
Dropee, the business-to-business (B2B) marketplace she co-founded in 2017, grew tremendously during the pandemic with increased demand for their services as suppliers and manufacturers reached out to new customers digitally amidst a difficult business environment.
“We have recorded at least twice our growth across all our key metrics, in terms of gross transaction value, number of users and revenue, ” she says.
The platform provides wholesalers and retailers with the infrastructure to connect offline-to-online B2B transactions. It also gives them visibility on stock availability, customer payments and predictive analytics on customer purchasing trends.
During the pandemic, many B2B-based businesses have turned to such platforms as a quick way to digitise their sales channels to optimise costs and maintain service quality. They range from larger distributors and brands to SME retail companies.
This trend has certainly helped marketplaces like Dropee not only multiply their growth, but also gain a bigger foothold in the larger retail market. And with the ongoing restriction on movement, they continue to play a big role in enabling businesses to go online and adapt in a digitally-driven landscape.
“Over the pandemic, it is inevitable that businesses need to transform their B2B sales due to various reasons such as travel restrictions, change of customer behaviour and so on.
“The future of B2B e-commerce is immensely bright as the supply chain today still remains quite fragmented due to how slow information travels through them. Many companies are still using outdated methods like pen and paper that causes data to be siloed, non-cohesive, and oftentimes, unreliable due to the lack of transparency.
“As such, many businesses, especially the micro, small and medium enterprises (MSMEs), struggle with proper documentation, ” says Ng.
This means that there is still a large market for platform owners to tap as they help more companies get onboard the digital bandwagon.
Notably, businesses were forced into a crash course on digital tools in order to stay relevant to their customers during this time and platforms offer them an easier way to digitise using already available infrastructure as well as technical support.
For example, Dropee has a range of B2B software tools including B2B e-commerce store, sales agent ordering app and integration to back-office systems to bring their offline wholesale trade online.
“Our goal for our B2B subscribers is to maintain or grow their sales by connecting and engaging customers with this new digital way of ordering.
“It also ties in with our mission of empowering both wholesalers and retailers to trade faster and cheaper, make smarter decisions and transact in bigger volumes amongst each other, ” she adds.
But apart from just digitising the wholesale experience for traditional consumer goods businesses, Ng points out that the digitisation process also enables MSMEs to improve on their documentation needs. This will also eventually open doors for them to get better pricing and financial assistance.
The lack of proper documentation and transparency in data has led to many smaller companies being ineligible for financial opportunities, such as extended credit terms and working capital, from suppliers and banks – which is crucial in a time when many are faced with cash flow challenges.
If these MSMEs are able to automatically digitise and maintain their digital paperwork via a platform, that would help them become more bankable through improving their credibility via digitisation.
“As B2B e-commerce gets adopted by more players across the chain, the MSMEs will gain the largest value with easier, faster and cheaper access to financial opportunities and new markets. Indirectly, this benefits the suppliers who are servicing this market as well, ” adds Ng.
But just as quickly as businesses have had to adopt the digital way of operating, marketplaces have also had to quickly upgrade their capabilities to support the large migration online.
One of the key challenges Dropee faced over the past year was to scale-up its operations to support more companies.
“We struggled in coping with the huge surge of demand and had to grow the team fast to support operational functionalities to successfully onboard our clients to our ecosystem, ” Ng acknowledges.
“We also had to learn, unlearn and relearn a lot of things. There are a lot of moving parts and changes happening during the pandemic, from changing user behaviour to working culture.
“It is crucial for entrepreneurs and leaders to stay adaptive through these changing times by learning new skills, unlearning methods that don’t make sense and relearning new ways to compensate for old methods, ” she adds.
The team at Dropee also worked closely with its investors Malaysia Venture Capital Management Berhad (MAVCAP) and Vynn Capital, which provided them with mentorship as the group expanded its business.
“They also gave us access to their network of other start-up entrepreneurs and investors for collaboration, learnings and fundraising.”
For sure, this will be an ongoing challenge for platforms given that the move to digitalise businesses is a long-term one. Notably, it is not just an issue of technology.
According to Ng, the lack of knowledge and unskilled workforce to adopt B2B e-commerce immediately would also hinder growth in the near- to mid-term.
Dropee is also working closely with various public and private institutions such as Human Resources Development Fund and MARA as well as multinational brands to upskill the market and prepare businesses for B2B digital transformation.
The company is looking to raise more funds through a Series A round to scale further in the domestic as well as regional market.
Dropee raised US$1.3mil (RM5.4mil) in a “seed-extension round” mid-last year.
“We are extremely flattered that our fundraising activity caught wind. Should there be any interested investors, feel free to reach out to the founders.
“We will be utilising these funds to upgrade our product and provide more financial support to the MSME and SME buyers. We want to encourage and partner more with sellers, agencies and institutions that are passionate, like us, to service this underserved MSME and SME market.
“After all, we believe that successful changes require many parties to collaborate and contribute to the greater cause, ” she says.