Paris-based French and Cambodian startup ShopRunBack was launched in 2014 and has been revolutionising returns management for e-merchants and retailers, it is established by a group of experts in e-commerce, supply chain and the latest web technologies. ShopRunBack is looking to expand into Asia, especially Southeast Asia, and Cambodia is the starting point for a new branch to be opened this year.
The company is finalising its cooperation model with 4PX, which is partially owned by Alibaba Group and by SingPost and is part of Alibaba Cainiao Logistics, to seek ways to use Cambodia as a regional hub for e-commerce in Southeast Asia. Eddy Richauvet, CEO of ShopRunBack, spoke to us about e-commerce, business expansion and the introduction of the 4PX Group to Cambodia.
RN: ShopRunBack was established a few years ago in France. You and your wife both graduated in both logistics for e-commerce and web technologies. Why France? How are you progressing?
Eddy: I have spent the last 20 years in Paris in logistics and supply chain management and we started our company ShopRunBack five years ago, specialising in reverse logistics solutions for e-commerce and retail.
Why France? Because, it is strategically located within Europe where one can easily span out one’s services throughout the other European countries. That is why our first company was established in Paris.
So far, we have been doing very well because we focused over the last five years on a nice segment which is reverse logistics for e-commerce.
The objective is to improve customers’ experience during and post-shopping, that is after-sales services.
E-commerce is not only a process to deliver goods ordered online but it also involves shipping goods to customers who may also seek to return goods due to manufacturing faults or wrong orders.
Hence, ShopRunBack built its platform and expertise in after-sales service to meet customers’ satisfaction and merchants’ obligations.
We were the first one to embrace that niche service five years ago, which was an innovating model since most service providers mainly focus on delivery, including the last-mile option.
Thus our business growth is satisfactory and we are developing and improving the platform as well the markets. To date, our services stretch to 70 countries worldwide.
RN: What sort of products have you been dealing with primarily?
Eddy: Well, on a global scale, cross-border e-commerce transactions mainly involve clothing, electronics and furniture. But throughout the years, we can see that e-commerce transacted items have varied from small to big items. Today, all types of products are offered and transacted online.
RN: Does your company have any operations in Cambodia? And if not, why?
Eddy: We built our logistics network first in Europe and America and have been looking into Asia since 2017, especially Southeast Asia.
We are starting with Cambodia first. We have operations in China and Hong Kong through our partners and Southeast Asia is our natural expansion in the region.
We intend to use Cambodia as a springboard and offer to train Cambodian SMEs to sell their products online to global customers as well as introduce global merchants’ products into the Cambodian market.
We are in the process of customising our platform for Southeast Asia with our tech team.
RN: The government announced its intention to have Cambodia become a digital economy by 2023. How do you view the trend of tech business now? How may this be relevant to your business?
Eddy: I think the government’s intention to embrace the digital economy within the next five years is a very good strategic move.
In Europe for instance, we have seen transformations in the traditional business to business (B2B) and business to customer (B2C) models.
Digital technology is the enabling medium to improve people’s standard of living by facilitating trade and extending connectivity and collaboration with each other.
Therefore, we are happy to contribute our expertise to the government vision and strategy to integrate further with the region, that is Asean.
RN: Since Cambodia doesn’t have e-commerce legislation in place yet, do you view it as a constraint to start your business here?
Eddy: We understand that the law is being finalised and should be passed soon, probably right after the elections at the end of July.
We would need such legislation to facilitate and regulate e-commerce transactions. Just like back in Europe, over a decade ago they initiated similar legislation.
No one was familiar at that time with e-commerce, consumer protection and online business, but they improved the legislation as time went on and regulators gained more experience.
RN: Logistics cost is one of the major constraints in Cambodia that hamper the flow of foreign direct investment. Since you are involved in that domain, how do you think Cambodia can improve its logistics costs?
Eddy: This is indeed a crucial matter. We started our business in traditional logistics and B2B, which is not solely about networks but also about collaboration.
Of course, logistics providers will compete with each other but they also need to cooperate with each other to improve connectivity and smoother functioning of the supply chain network.
As far as Cambodia is concerned right now, we are at the gestation phase of an e-commerce logistics base and platform.
We need to enhance the regional and domestic network by establishing more hub-and-spoke networks because in logistics, consolidation through better distribution and last-mile services enable cost reduction.
In this market, I see many service providers competing with each other instead of collaborating with each other. In Europe and elsewhere, businesses embrace the “competition collaboration” modus operandi.
Sure, you have businesses competing but cost-effective and efficient logistics is about collaborating.
Cambodian infrastructure has been gradually improving over the last decade as we see better roads and bridges, and lower electricity costs thanks to the many hydropower schemes built with Chinese funding and to the many special economic zones being established successfully.
Our ports and airports are continuously being upgraded to augment their capacity and this has improved the hard aspects.
However, the soft part such as cross-border goods clearance. Trade-facilitation wise, still need more work to facilitate faster transit times.
RN: Last December, the government approved the establishment of the National Logistics Council to deal with logistics in a holistic and cohesive manner. Do you think this can work out well?
Eddy: From my understanding, the NLC aims to improve efficiency and inter-ministerial collaboration.
As said earlier, logistics is about connection, collaboration, communication, and anything related to supply chains across multiple businesses from different sectors and across countries.
Therefore, establishing the NLC does make sense as the government seeks to better comprehend this complex topic and enhance logistics efficiency.
The government should conduct more stakeholder consultation or dialogue with the private sector, the real business practitioners, to better assess businesses’ needs and how they may contribute better inputs.
RN: Earlier last month, you met the Minister of Public Works and Transport with 4PX, part of the Alibaba Cainiao Logistics arm. Are you going to cooperate with them to set up operations in Cambodia? If so, when will that happen?
Eddy: 4PX is a Shenzhen-based Chinese firm and is one of the largest logistic players for cross-border e-commerce in China and they also have worldwide branches.
They are already our strategic partner in Europe and in the US. As you mentioned, they are part of the Alibaba Cainiao Group.
Together with Singpost, they are a 45 percent equity holder in 4PX. 4PX is presently handling a million packages daily for Ali-Express in Southern China with a capacity of two million packages daily.
Cainiao Network is a 100 percent owned subsidiary of Alibaba Group and basically their logistics arm.
Its business is operating a logistics network for all Alibaba’s market places. 4PX is the only one doing cross-border logistics among companies invested by Alibaba Cainiao.
The reason they invested into 4PX was because 4PX has been in cross-border e-commerce logistics for more than 14 years and was considered a market leader in this field.
When we discussed with them about how to carry out the 4PX’s objectives, we shared with them the strategy and vision on how to train local SMEs to use the platform to sell from Cambodia to customers around the world and for make it easier for international merchants to sell to Cambodia.
We also told them Cambodia was a very strategic location as a possible regional hub for Southeast Asia. So the 4PX chairman and his team came for the first time on a fact-finding visit to Cambodia and appreciated the opportunities.
So yes, we will cooperate with 4PX in Cambodia. We will bring together our experience, the technological platform and our existing trained human capital to provide professional e-commerce services.
Most importantly, together with 4PX, we will transfer knowledge to Cambodians to beef up domestic expertise.
The online shopping experience will be improved much more than before. So the primary goal is to bring new high-tech, professional technology to Cambodia, create job opportunities and provide better services.
Though the market size is small, Cambodia possesses a high percentage of tech-savvy young people which makes it an ideal place for more innovation.
Our partner 4PX is a company skilled in innovation. They have to be, since e-commerce is a very fast-growing and fast-moving sector.
Three years ago, 4PX’s revenue was about $450 million but this increased to about $900 million last year.
As a very young market, we could bring many innovations without confronting much historical luggage or impediments.
Think about how the Americans used new technology to nurture the development boom during the second industrial revolution.
Now, it is time for us to leverage e-commerce and the digital economy to help Cambodian people leapfrog and improve their living standards.
Logistics is always a business of support and collaboration. As a pioneer of this industry, our friend and partner, Kevin Li, the founder and group CEO of 4PX, is always scouting for investments in new markets. We should become operational in Cambodia soon enough within the second half of 2018.