KUALALUMPUR, MALAYSIA - MediaOutReach - January 04, 2019 - Kumoten, a Malaysian-owned techstartup, has been making waves as the largest homegrown dropshipping platformwith more than 100,000 stock keeping units (SKUs) in its catalogue.

from left to right, Juliana Jan (Chief Investment Officer, Cradle Fund Sdn Bhd), Ganesh Kumar Bangah (Founder and Executive Chairman, Commerce DotAsia Ventures Sdn Bhd) and Isaac Leong (CEO, Kumoten).

Latelast year, Kumoten achieved another milestone when its founders, brothers Isaac Leong and Leong Yew Meng, closed a round of pre-Series A equity funding,led by Cradle Fund.

Kumoten's first venturecapitalist, Commerce DotAsia Ventures Sdn Bhd (Commerce.Asia), came in at Kumoten's seedstage in 2017. At that time, Commerce.Asia's Founder and Executive Chairman GaneshKumar Bangah mentored the company and helped it grow under Commerce.Asia'sGrowthX Market Acceleration Program, a programme licensed from Silicon Valley.Since then, Kumoten has grown its active user base by more than seven times.

Commerce.Asia strengthenedits support for Kumoten when it joined the round of investment in late 2018together with the Cradle Fund. The majority of the funds from this recentequity round will help Kumoten expand its product research and development teamand talent acquisition. It also plans to launch local dropshipping sites inIndonesia, Philippines and Thailand and extend its marketing activities to attractusers from these new markets.

Inspiring confidence

"As theChinese saying goes, it's a case of the right people being in the right placeat the right time," says Kumoten's CEO Isaac Leong about the strong investorconfidence that the company has inspired. "Malaysia and South East Asia are experiencingrapid growth in e-commerce. And Malaysia has one of the best infrastructure inthe region for e-commerce growth."

Inaddition, Kumoten has shown a strong product-market fit proven by itsimpressive growth in its active user base as well as in its gross merchandise volume--whichhas grown by five times since May 2018. Its secret to success has been the seller-centredsolution it has provided. Kumoten has ultimately improved sellers' lives bytaking away the seller's biggest pain point--mounting piles of stock in the homeor in warehouses, as well as a backed-up cash flow.

Theplatform takes care of these challenges and creates a more efficient platform thatallows users to easily select products and sync product details to onlinemarketplaces such as Lazada and Shopee. "We want online sellers to enjoyselling online and to focus on sales and marketing activities instead ofworrying about the cost of investing in stocks, taking product photos andwriting product descriptions". Isaac believes that Kumoten has not only solveda problem faced by Malaysian online sellers but also online sellers from SouthEast Asia, India and the Middle East.

"Most importantly,our investors believe in the founders and our management team's ability to deliveron our financial goals. It helps that our team is also able to work closelywith our investors to achieve greater heights."

With itshealthy track record, Kumoten has won trust from all major online marketplacesin Malaysia such as Lazada, Shopee, Lelong.my and 11Street.my.

Extra edge

In SouthEast Asia, Kumoten is a pioneer in adopting the Automated Dropship system, whereusers do not have to download or copy and paste product data.

Kumoten provides resellers with good quality andmarketplace-compliant product photos, product descriptions and specificationsas well as pricing information such as suggested retail price, cost price, andshipping costs. With the automated system, it just takes a few clicks for usersto select and sync products to their online stores.

Thesystem also automatically updates the inventory level of the product, ensuringthat out-of-stock items are immediately updated on a user's online store.

"Wewanted to disrupt the conventional business model of "buy-first, sell-later" to"pay-as-you-sell", thereby removing the risks of keeping stocks. This increasesthe number of products an entrepreneur can sell online as they do not have tofork out money to buy stocks."

"We estimate that at least 34 per cent of sellers onmajor online marketplaces in the region either do not have enough products orhave no products of their own to sell" says Isaac of Kumoten's target audience.

There isno limit to the items a user can select and sync to their online store. "We hada user who synced about 22,000 items to Lazada in July and generated almostRM20,000 worth of sales from his online store in Lazada within a month," saysIsaac.

Continued potential

According to Isaac,e-commerce in South East Asia is growing rapidly but is still considered to beat an early growth stage and that dropshipping complements this growth.

"The potential of dropshipping is in riding the e-commercegrowth wave. We estimate by 2020, dropshipping in South East Asia will have aUSD7.5 billion market size," he says. On a dailybasis, Kumoten adds 500 - 600 new items to its product list.

Besides the hugemarket size potential, Isaac also believes that the technology behind dropshippingis underdeveloped, with most players still using a conventional model.

One of Kumoten'sgoals is therefore to expand its research and development. Isaac says: "Thereare many other areas and technology we can develop to bring dropshipping to ahigher level. And we hope to be at the forefront of this innovation."

About Kumoten

In 2014,the Leong brothers sought a solution to the business risk faced bye-commerce entrepreneurs, i.e. buying and keeping stocks. "Many first-timers oryoung entrepreneurs who are inexperienced in selling and managing cash flow andinventories often overlook the risk in e-commerce. They buy stocks from China,with their own savings or with borrowed money, and then realise it's not soeasy to move these products. The unsold stock is then offloaded in marketplacesat a loss, or more often than not, become Christmas presents for theentrepreneurs' family members and friends. There are also cases where theyreceive the wrong stock and then have to go through lengthy processes to get anexchange. Many simply end up getting stuck with stock that they did not want,"explains Isaac.

EnterKumoten. Kumoten,which means 'cloud shop' in Japanese, is in the business of dropshipping.This means the company sources for thousands of products and makes theseproducts available for online resellers to select and sync to their onlinestores in major marketplaces such as Lazada, Shopee, Lelong.my, 11Street.my andmany others.

Essentially,Kumoten acts as a curator and stock-keeper of products for the online seller,so that the seller can focus on selling and marketing the products.

Today,Kumoten has grown to be Malaysia's largest homegrown Dropship Platform carryingmore than 100,000 SKUs from a wide range of categories in its online catalogue,sourcing from not just Malaysia but also from China.

ChiefExecutive Officer Isaac Leong heads Kumoten and is supported by a core management team, which consistsof engineers, sales and marketing experts, and retail business owners. Each ofthe Kumoten founders brings vast industrial and commercial experience from MNCand FMCG landscapes.