Online brand platform gets physicalmoney-glitz | Tereza Cai 21 Oct 2019
Pinkoi, an online shopping platform for original design goods, is aiming to help more independent brands go international by opening its first physical shop in The Mills, Tsuen Wan this August.
"Even though we started as an online marketplace, we do have dreams of opening a physical shop," says Peter Yen, chief executive and co-founder of Pinkoi, who believes that a physical shop could help brands get more recognition and deepen its penetration in the markets.
"I think the reason for choosing Hong Kong as the pioneer of the offline shop project is because Hong Kong is a very international city, and there are a lot of diversity," explains Yen.
Pinkoi has seen sales of Hong Kong brands on its digital platform grow by double digits every year. "It is very strong evidence that the Hong Kong brand is very competitive, not only for domestic in the Hong Kong community but also the international market. And we do have more and more premium brands from Hong Kong joining Pinkoi," says Yen, noting that the unique watch on his wrist is from a Hong Kong brand.
Founded in Taiwan in 2011, the company started running its first office outside Taiwan in Hong Kong in 2015 to enter the international market. It has since expanded its global presence to 93 countries with the help of investments from well-known investment funds such as Sequoia India. The online marketplace has over 2.8 million registered members and the aggregate number of items sold by more than 14,000 shops amounts to more than 1.3 million.
"We won't force brands to only sell exclusive products on Pinkoi, but we do see that 80 to 90 percent of the brands sell their products exclusively on Pinkoi," says Yen.
The marketplace is an invitation-only market, says Yen. To join, designers must file an application, which will be seen by the company's team. A decision will be made based on brands' originality, authenticity, whether or not their manufacturing is socially responsible, and whether they are suitable for Pinkoi. The acceptance rate is around 20 to 30 percent.
The marketplace also hosts meetups as well as offline and online seminars to help brand owners, where Pinkoi share vendors tips on how to take photos and sharpen their descriptions and titles to help in search engine optimization and make their products easier to find online.
Pinkoi has organized a range of events across Asia for brands to showcase their products. It held an offline handicraft market in Hong Kong last November in The Mills, bringing products from 120 brands. Its most recent offline event is going to be in Tokyo.
The opening of its Tsuen Wan shop is another way of showcasing products on Pinkoi directly to the local community. The shop manager will curate brands from around the world every month based on different themes.
Pinkoi charges 15 percent of the value of each online transaction.
"The value of cross-border transactions on average is 65 percent higher than domestic purchases. Hong Kong and the mainland are the best on our platform. If you compare the best and worst-performing regions, the difference in the transaction value is about 2.5 times," Yen shares.
"One of our biggest challenges is that shipping fees are sometimes very high. Sometimes, when brand owners do international business, they probably have no idea how to configure their global shipping. We want to educate and guide them in setting up proper cross border shipping," says Yen. The company updates brand owners on the shipping policies of global carriers and gives advice on pricing shipping fees.
Cross-border business currently accounts for more than 30 percent of Pinkoi's total transactions, up from less than 10 percent in 2015. The rapid growth was primarily driven by improvements in payment methods - namely, allowing buyers to pay in the local currency, preventing any losses incurred through currency conversion, Yen says.
The company also launched a new business segment last year. "Many brands on Pinkoi not only sell products but also have their own workshops for customers.
"So Pinkoi also serves as a marketplace to match customers who are looking for these kinds of workshops."
Pinkoi also charges 15 percent of the transaction value of workshop experiences.
There are no external advertisements on its website, since Yen prioritizes customer and brand experience. Brands on Pinkoi can promote on the front page of the website for free - an important tool for vendors, Yen says, adding that it has planned to roll out a fee-based advertising service to brands on the platform.