Indonesian ecommerce enabler Paraplou Group diversifies. Is it stretching itself too thin?

If you follow Indonesian ecommerce, there’s a decent chance you’ve heard
the name Vela Asia. Until recently, the company referred to itself as a
fashion ecommerce enabler, providing website-building, logistics,
digital marketing, and other services. Last February, it successfully
bagged US$1.5 million from Singapore-based Majuven to scale up its
operation. The idea was that Vela Asia would be a more niche-oriented
ecommerce services provider than say aCommerce, for example. It would
strictly focus on the fashion vertical, one of Indonesia’s most fruitful
ecommerce categories to date.

In April, following the inception of their own ecommerce site Paraplou,
co-founders Bede Moore and Susie Sugden rebranded Vela Asia as Paraplou
Group. The switch, they claim, was an effort to keep all of their
ecommerce activities under the same company umbrella. “We will still be
operating our full range of mono-brand sites, but we wanted to
consolidate our activities under a single brand name,” said Moore.

With all the media attention on Indonesia’s ecommerce market, Moore and
Sugden have been secretive, and clearly have their work cut out for
them. Neither have commented on what the name Paraplou means, and for a
little while, the strange rebrand had our team scratching their heads.
We looked at the Techlist data and tried to figure out if Majuven had
invested twice, once in Vela Asia and once in Paraplou. We asked each
other, “Does Vela belong to Moore and Paraplou belong to Sugden? Wait,
are they actually the same?” We soon learned they were.

A lot of moving parts

According to the firm, Paraplou Group provides end-to-end ecommerce
support to premium fashion brands, from website to warehouse. Paraplou,
the consumer-facing ecommerce site, is a bona fide fashion ecommerce
itself. It features lesser-known brands for Indonesians like Playhound,
but also mainstream ones like Nike, Adidas, and Bonds for men. For
women, a few notable brands include Ciciero bags, EPA jewelry, and
Kimihara shoes.

Moore and Sugden’s approach carries a two-pronged strategy that is also
likely a way for the co-founders to hedge their bets on the Indonesian
ecommerce playing field. It seems pretty smart; if fashion retailers
want their own business-to-consumer ecommerce site, Paraplou Group will
build it. If they want to simply sell on a marketplace platform,
Paraplou provides it. Depending on which arm of Paraplou performs best
in the early stages, the company could easily pivot if necessary. This
could mean discontinuing one arm to focus on the other – kind of like
how the Dark Knight’s bat mobile transforms into a motorcycle after it’s
damaged.

Critics could argue that if a startup tries to be everything to
everyone, in the end it will be nothing to no one. To some, Paraplou
Group’s strategy of running enabler services while also building out its
own estore might seem unwise, and with too many moving parts that need
to be micro-managed. With only US$1.5 million and a lean team, there are
questions that inevitably come up. An important one is how the startup
will be able to manage ecommerce sites for a bunch of different firms
while also ensuring its own is positioned as a market leader.
Trading in focus for a wide net

In terms of serving other ecommerce players, a great deal of Paraplou
Group’s clients are brands from overseas that can’t easily be found in
the archipelago. Paraplou Group has built ecommerce sites with local
domains for several companies so far, including Lee Cooper from England,
Universo from Brazil, Jack Nicklaus from the US, and G2000 from Hong
Kong. In Indonesia, it serves refurbished goods ecommerce site
Kukuruyuk, luxury estore Bobobobo, and muslim fashion portal Saquina.

Moore and Sugden haven’t shared the traction numbers of Paraplou Group
or its ecommerce counterpart, but it seems clear that the startup will
inevitably go head-to-head with a few of the big players in Jakarta. For
enabler services, Paraplou Group will still need to outmaneuver
aCommerce, a firm that may be in the best position possible on the eve
of Jakarta’s ecommerce showdown.

Paraplou will also double duel with Rocket Internet’s Zalora, and
homegrown Indonesian fashion estore Berrybenka. But arguably, the
biggest thorn in Paraplou’s side (and for the other players too) will be
the nation’s upcoming MAPeMall, a large soon-to-launch ecommerce site
primarily driven by high-end fashion brands. MAP is an Indonesian
offline retail conglomerate that has department stores, popular apparel
brands, a variety of lifestyle products in its arsenal, and very deep
pockets. It has nearly 1,800 retail outlets with more than 150 brands in
more than 60 cities across Indonesia. It’s also the local franchise
holder of well-known global brands such as Pull & Bear, Zara, Bershka,
and Adidas.

Based on what we can see, the biggest advantage Paraplou has going for
itself is that it features smaller foreign brands not easily found in
Indonesia. In this regard, Paraplou could theoretically champion a
relatively niche segment of Indonesia’s eshopping market, but would
unlikely capture a majority efashion user base in Indonesia. According
to Moore, Paraplou’s unique value proposition is that while other
players offer “mass fashion,” Paraplou aims to “offer affordable luxury
to sophisticated consumers.”

If you ask me, Paraplou Group should focus more on its
business-to-business offerings, an Indonesian well that has fewer people
drinking from it. Both Moore and Sugden worked at Lazada Indonesia as
managing directors in 2011 and 2012 before starting Paraplou Group.
Moore and Sugden’s money and resources don’t spring from the seemingly
limitless coffers of Ardent Capital, Rocket Internet, or a big
Indonesian family conglomerate. However, the race is still on in the
archipelago, and Paraplou Group is a still a contender to keep an eye on.

Editing by Terence Lee and Michael Tegos