Revolutionising the wholesale industry with technology

Aizat Rahim is Co-Founder for Dropee, a five-year-old B2B eCommerce solution provider that empowers small and medium enterprises (SMEs) to grow and operate more efficiently via digitalisation.Aizat Rahim is Co-Founder for Dropee, a five-year-old B2B eCommerce solution provider that empowers small and medium enterprises (SMEs) to grow and operate more efficiently via digitalisation.

To help SME businesses buy and sell more efficiently, Dropee’s simplified B2B wholesale platform offers easy discovery of the right products and wholesale suppliers.

HAVE you heard of Dropee? Since its inception five years ago, the Malaysian-based business to business (B2B) wholesale platform and eCommerce solution provider has been empowering small and medium enterprises (SMEs) to operate more efficiently by increasing connectivity between businesses. Co-founder Aizat Rahim explains, “Simply put, Dropee connects retailers to wholesale sellers on our marketplace platform, helping retailers source products directly from qualified suppliers.

“We started with drop-shipping in 2017 - where online stores sell products they don’t physically carry, with the supplier fulfilling the orders,” said the 32-year-old finance graduate.

“We have since pivoted to focus solely on B2B, by providing a digital platform for retailers and wholesalers to find the right products and streamline their ordering and payments. Our customers range from the traditional sundry and grocery stores - the kedai runcit, to bigger establishments like hypermarkets.”

With B2B, Aizat explained, “It is not just about getting goods to the businesses that want them. There are several other considerations such as credit and pricing terms for retailers and more. We started with an ordering tool to help retailers purchase their inventory and suppliers manage their purchase orders. Later on, we expanded our offerings to include predictive analytics on KYB (know your business) to further help retailers obtain credit financing. We also leveraged artificial intelligence (AI) elements to predict which products will be in high demand beforehand, to enable retailers to source and manage inventory as efficiently and optimally as possible,” explained Aizat.

Dropee was founded by Aizat, Lenisse Ng, CEO, and Haslinda Rasip, Director of Technology. The trio had previously worked together at venture building accelerator, Infinite Ventures, another business which Aizat had previously founded.

“Coincidentally, we all came from the supply chain industry. My family were distributors of confectionery. Lenisse’s family was involved in manufacturing in the textile industry, and Linda came from retail. We realised that even though we were from different industries and supply chain stages – manufacturer, distributor, and retailer, we faced similar problems.

“Most businesses do not understand their own supply cycles. A retailer generally will only order inventories when stocks have run out. Distributors then receive orders and might need to order from their principals or manufacturers. This could easily take up to 14 days, which results in loss of sales for the retailer because he is out of stocks. Besides that, brand owners typically will only have their top line sales and bottom line profits, without having a clear understanding of what goes on within their supply chain,” explains Aizat.

On top of these issues, Aizat shared that smaller businesses, especially the mom-and-pop stores, are sometimes underserved. They are usually not offered credit terms by their suppliers due to their low volume of purchases, and are rarely prioritised when it comes to stock availability or best pricing.

“Interestingly, while they are smaller in terms of size, these businesses actually have the highest transactions within the FMCG industry. Collectively, they are huge! And that was what sparked the need for Dropee.”

Over the years, Dropee has contributed to the success stories of several local stores. It has helped popular Subang Jaya bakery Sugar and I source for ingredients and compare prices, and this has helped the store save close to 14% on their inventory purchases. Meanwhile Shah Alam printing company Jadi Life Solutions, has been able to tap into new markets and increase its B2B sales. Baking ingredients store Bake with Yen, which is making its presence felt in numerous places in the Klang Valley, also leverages on Dropee's digital tool to manage their sales output and managing clients.

While the company began working with smaller stores in the city, it soon realised that if it were to grow its presence across the entire supply chain, it would also need to partner with more established firms. Among the clients that Dropee works with include Petronas and Mydin, as well as Red Bull and Unilever.

 Most of Dropee’s work takes place behind the scenes and online, although every now and then it hosts on ground events such as the Digital Wholesale Market event which took place at Da Men Mall in Subang Jaya in 2019. This event was aimed at catalysing digital wholesale transactions between featured local suppliers and businesses in Malaysia’s F&B industry. Most of Dropee’s work takes place behind the scenes and online, although every now and then it hosts on ground events such as the Digital Wholesale Market event which took place at Da Men Mall in Subang Jaya in 2019. This event was aimed at catalysing digital wholesale transactions between featured local suppliers and businesses in Malaysia’s F&B industry.

Currently, the company operates across Malaysia, Singapore and Indonesia, however, it has bigger regional aspirations. “Some of our clients like Petronas have vendors all over the world, and because of this, we are required to work with many of their distributors, so we could pretty much expand to just about anywhere,” said Aizat. “Ultimately, we also need to time our expansion to ensure we have resources available to support that growth. But, the wider vision is absolutely to expand across South-East Asia.”

Making its mark

Dropee is funded by Y Combinator, a Silicon Valley startup accelerator that has launched over 3,000 companies including Stripe, Airbnb, and Reddit.

“Being part of the YC alumni is something we are particularly proud of”, shared Aizat.

Since its launch, Dropee has seen a more than 500% growth year on year. Aizat reckons Dropee’s success is the result of several factors.

“We have always believed in working lean. Using digital solutions also helps us work more efficiently and we are constantly looking to automate our processes where possible.”

Aizat also attributes Dropee’s success to both hard work and opportune timing. He said: “We started selling very early on and often worked into the wee hours of the night. We also have an in-depth understanding of the supply chain industry, and a steadily growing client database. These have affirmed our global investors’ confidence in us – that the team is geared up for success.”

While most businesses struggled during Covid-19 lockdowns, Dropee saw a chance for growth. “The pandemic helped us convince many people to see the benefits of buying and selling online, especially for B2B. We saw a surge in the adoption rate for our solutions, which shortened our sales cycles from several months previously, to just days.”

Making accounting effortless

When Dropee first launched, it worked with only a few brands and retailers, so it was simple for the team to manage operations manually.

“As we grew, managing large volumes of invoices, purchase orders, and delivery orders from multiple retailers and suppliers became increasingly time-consuming and labour-intensive. That’s when we started to search for solutions to manage our workflows more efficiently, while still maintaining a lean team. After comparing options, we chose Xero. One reason for our decision was Xero’s connectivity. Xero allows us to sync up our sales and purchase orders from multiple retailers into one system.”

With Xero’s automated accounts receivables and payables function, the Dropee team can track its cash flow in real time. “Another core function is reconciliation. There are often goods that need to be returned to the distributor. Xero helps us reconcile these goods, and disburse payments back to the retailers easily.”

According to Aizat, Xero’s platform has helped them save at least 50 hours a week. “Imagine if we had to do all the purchase orders and invoices manually - if it were just 10 orders a day, it’s fine, but when it comes to hundreds and thousands a month, then it all really adds up.”

With Xero, business processes are all manageable from one cross-functional platform. For example, the accounts team works collaboratively with the marketing team by monitoring expenditure and return of investment (ROI). “Xero has definitely helped us with faster decision making when it comes to deciding which campaigns are working and which are not.”

Aizat also shared that it was important for the team to partner with a platform that was customer-centred in communications, support and product.

“Back in 2018, we needed to incorporate multiple changes that were taking place in Malaysia – such as switching from GST to SST, which would take considerable time to work out. Xero listened to our feedback and improved its features to help SMEs like ourselves remain compliant.”

Looking ahead

Speaking on Dropee’s plans going forward, Aizat shared that their vision has always remained the same. “We want to be the go-to platform for brands and retailers to discover the best products and wholesale sellers. As a home-grown business, our core mission will always be to help other Malaysian businesses grow and flourish.”

For more information about Xero, click here.

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