 Hello everyone and warm welcome to the tech talks by entrepreneur APAC and today we are talking to the Taiwan origin startup artificial intelligence and AI-based digital transformation startup IKALA and we have with us Sehga Chank who is the CEO and co-founder at IKALA. They've recently raised US $17 million in Series B round of funding which they primarily aim to use for digital transformation of startups across Southeast Asia and also to help them to get into online commerce very quickly and turn around their business in what are very very difficult times particularly for businesses which were more in physical environments and today they can get into digital environment with much ease and that is where IKALA comes in and facilitates this business. So thank you for joining us today Sehga and we're looking forward to having a wonderful chat with you. So I understand that recently you raised this large round of funding and you know while you've got a great presence in Taiwan already but what is it that you are actually planning to bring to Southeast Asia particularly to markets like Singapore, Malaysia, Indonesia where there is a huge big large retail market and they are the digital transformation is the only way forward for them to grow and grow quickly. Okay so thank you for having me today. So IKALA is a company that really focus on bringing AI solutions to merchants especially in the segment of retail and e-commerce and so we have been really focusing on solving some of the most pressing problems in Southeast Asia and generally in the whole world especially after the pandemic, after COVID-19 came and so one example is that we have the IKALA Commerce Division inside our organizations which focuses on providing solutions to solve problems on social commerce and influence marketing so which are two very trending marketing fields in the world right now and so let me start with influence marketing so when we talk about influence marketing so most people will think about okay I know some influencers and as a marketer I can play some budgets and give the money to the influencers so that they can do some post or video streaming or short videos you know to evangelize or to promote my products on the social network so that many people would buy it or or get awareness of my products you know on the social network like Facebook or Instagram so that's the that's the thing a typical marketer would do you know with intuition but that's not very scientific or that's not a very measurable way of doing advertisement right and so for influence marketing the way we are using AI to transform how influence marketing is that we analyze the the public digital footprints of all the influencers in JPEG in Pate, Asia so that we get to know okay so influence A he is very capable of selling like electronic stuff or influence B she's very capable of selling cosmetics or some personal caring stuff and so we use AI behind scenes to analyze their footprints to analyze their performance with post or different photos on social networks so that we can provide these kind of analysis analytics to brands and advertisers so that they can they can get a better understanding of how to plan their budget for influencers for their influencer campaigns and so that's the one problem we are solving you know with our analytics and with our AI capability and we are actually partnership with Google Facebook and TikTok Instagram such big tech companies in the world to do data analysis and of course with strict data compliance and governance measures there so that that's an example of how we we we transform English marketing and make it useful you know for brands and advertisers because we are seeing a big trend happening in the world is that customer acquisition costs is growing like crazy so people's attention are basically scattered around social networks and every kind of media and so it's really hard to get a person to focus on the content you know for like more than 15 seconds and that's a really hard problem but we found that influencer is an effective way of acquiring customers in an effective cost and so that that's the that's the one one example of how we use AI to do transformation in marketing and the second one would be social commerce so extending from the influencer ecosystem we found that many people are now doing transactions directly on social networks in addition to traditional e-commerce marketplaces which we are all familiar with so people are basically now shopping and chatting and and completing their purchase purchase inside the messenger this is completely new behavior we are seeing especially after COVID-19 because in our hands we have we have some fresh data telling us about now more than people are spending 40 percent 47 percent more time on social networks this directly translates into 47 percent more time on shopping on social networks and so brands advertisers they came to us and saying that okay so people are now shopping on social network can you provide us with the tool that we can do e-commerce directly on the social network and our answer to that is the app shop loss which which is an app you can download for free on iPhone and Android and it's specifically designed for merchants so that after the download he can connect the app to the fan pages so that he can start do the selling on the fan page and manage the fan pages with complete logistic payment or customer service functions you know behind the scenes all together and in one app and so that's how we we we scale the whole social commerce in Southeast Asia so so until now we have more than 140,000 merchants using shop loss in Southeast Asia and turning turning their original online business or original offline business into social commerce and so that's how we have the merchants do their business in the social commerce area yeah sure so now why you know with so many merchants coming online in and you know small micro small you know business they're sort of jumping online so what kind of data edge is something that they get which they do not get in physical environments you know what kind of data points do they get on customer acquisition or what kind of data points on customer behavior that they come to know which is not easily visible to them or something that they cannot record in a more physical space and that sort of helps them to serve their customer better yeah exactly that that's a very very good question I think the the the one thing shop loss help merchants most is that now merchants can actually go directly to their customers and know who their customers are so so if you recall for the past few years brands the advertiser will even merchant they started to a lose profile and lose and lose the complete you know impression and of who their customers are a customer basically became you know cookies in the browser or some anonymous you know sessions visiting sessions in your dashboard so they they kind of lose the profile and lose who they are but but now they have their their their great opportunity to own their data which is an important concept we have been evangelizing you know to all the merchants and brands and advertisers so for example if we are using shop loss we let the merchants own all their data whatever the conversation whatever they are the conversations in the messengers or the orders um um buyers are placing you know below the post as the comments they can all be collected back into our system and they are all transparent and visible to the merchants and so now they are actually changing the customers inside the messenger to do the business so instead of okay so so a cookie was brought here by google as or by facebook as nothing more like that and so so that's why so that's why we think conversational commerce would be so much popular in the coming years and because especially in Southeast Asia or especially in South America people like chatting before you know in engaging in business transactions so they they always start their transactions by I started chatting and buyers want to know who these merchants are and what this brand is about you know before really start placing orders and so now they can they can get to know their customers directly inside the messenger they know who they are who they live and what they like what they are looking for and these all kinds of these data will be collected and feedback to the merchants so that they can handle and they can get to know their customers more so do you also have these challenges of you know having the merchants verify because obviously you do not want to put the wrong merchants who would then not be able to service their customers properly which then probably makes you know everybody question the whole efficacy of this commerce so how do you verify the customers how do you make sure that you know and I mean going forward when you have like millions of merchants out there there would be conflict in terms of pricing same merchandise fake merchandise so many different things that will come to happen how are you sort of forecasting those problems and trying to address them today in the system yeah that thank you for a good question yes actually we just started talking about some of the problems we will be facing going forward after we continue to scale all the business yes so we are actually chatting with some financial institutions about the identity and the legitimacy of selling stuff on social networks so for example in Taiwan and in Thailand we partner with some of the most prominent banks such as K Bank in Thailand and we started exchange KYC data know your customer data with them to reduce the risk of like fixed up or some like people might be selling some weapons illegal weapons you know on the social networks and that's the thing we want to prevent in the future and we have already started chatting with the banks about how we can prevent this from happening and so that's an important strategy going forward so that the the goal of iCar providing things like shop laws is to become a trust and reliable third-party data platform and so and that's the thing where we are already doing now and so now of course that you from Taiwan you've entered in Southeast Asia already and what what kind of early sort of indicators you've got that you know that you that it's a great market and there's good e-commerce happening over here and then going forward what are the markets are you also looking to target yeah so um in fact we are completely data driven and so that's why we choose Southeast Asia as our beachhead market because because we have close partnership with Facebook so when we talk about conversation on commerce well the most important thing is of course conversations and so so um one top level metrics we we would care about is how many conversations are happening in the world in each country and what is the quality of these conversations on the social networks and so based on these metrics we can determine which countries we should focus on first so for example the the reason we are choosing Vietnam and Thailand and Philippines as our beachhead markets in Southeast Asia is that okay there the number of conversations are the biggest in the world in in these three countries so they they rank like these three countries rank like top five in the world in terms of the number of conversations happening on social network each day and so from that um we also analyze the the quality of all conversations uh to see if these conversations are actually leading to real business and real transactions and that's how we decide which country we should go for at first and so and so even though iCloud is a company headquarters in Taiwan we focus on Vietnam, Thailand and Philippines as our beachhead market and Taiwan would be the uh that would be next year we'll be launching here and so yeah so which particular categories have you seen the maximum growth in i mean you know within let's say social commerce what what categories you see which are high flying and you know doing extremely well and which are the new ones that will be added in so got it so we noticed that people are merchants most of them are selling clothes clothes clothing personal care stuff and and cosmetics and in some really interesting cases people are selling seafood you know in Singapore online and so but most of them are are still personal care stuff and going forward i i think um the i think the trend will will will sustain and people will stick to cosmetics or clothing but we are seeing we are actually seeing them that people started selling food online directly and that's also related to to an online merge offline business we are helping you deliver in philippines so um i i think that's a new behavior behavior because in philippines the pandemic is it's also serious there and their cases are the converting cases are going up each day and then and so you never are actually transforming traditional work grocery stores and retail chains selling food and online so that they can complete the transaction with the app with our app and they pick up the the the food or or their their stuff you know in the grocery store and that's a new online to offline new business we are seeing now yeah um i mean you know it's just a off off kind of a question but i mean facebook.com marketplace doesn't really have food as an option at least i've not seen it in india do you think that's restrictive uh you mean india you're not seeing food as an option so i mean you know you can list a lot of things in the marketplace in facebook but you cannot list food they do not have an option for food so do you think that that is restrictive and do you do you see some variations in other markets different markets having um you know some options and not having some other options it does that happen uh so um from what we know our facebook does not play in place any restriction on what can be sold you know on social networks so that's not it's just not there i mean it's just not you get out of this food because there's not a place there's not a element to list food uh huh uh huh okay yeah i i think that's um that really depends on what people would like to sell online in each country so we are seeing quite different behaviors among different countries so yeah sure yeah and i mean it will get added i think eventually so tell me that you know today of course uh brands itself they have a big omni channel environment you look at larger brands in fashion and they have distributors they have retailers they have franchise stores they have corporate own company own stores there there's a whole element to it do you see this becoming a conflict in the uh in the digital space where you know the corporate might be uh charging prices differently while um the franchisee store might be doing it differently and then then the whole system sort of goes into um you know some kind of conflict whether it's with regard to pricing or quality or even the uh the in season merchandise so have you sort of been addressing that okay thank you that that's a that's a very good question um so um the thing we are we are seeing now is actually um a bit more complicated than that so for traditional you know uh retail uh who who is already uh who's already very well established in logistics or in payments or in their sales channels or franchise um sometimes they the thing they worry about is that if i started doing this kind of business social commerce social networks would that be a diminishment to my brand uh because i i cannot control how merchants are selling my stuff or how um influence are not performing their performance are you know on social networks so so brand diminishment is actually the first thing they worry about and so so from what we know um they actually treat social commerce as a new sales channel and complement what they already have like physical stores like bringing motors and or their own e-commerce website they actually see it as a complement to the sales channel but in terms of branding that's the thing they mostly worry about and so it's also our job and our uh responsibility to make sure that influencers are are actually playing by the books and so for inflation marketing service we are also providing to the brands and retail stores as a add-on service to help them acquire more customers from social networks we actually do some quality control and content and content uh quality barricades along the way to help them view the campaign whether they are selling seafood whether whether the influencers are selling clothing or personal care we do the product communication with the influencers beforehand and not just let them okay i give you a bunch of stuff uh you can sell it at will and you can sell at any price as you like that's not the thing we would do we will manage the influencer campaign very carefully combining with the social commerce to reduce their worry about their brand diminishment so that's the thing we do and i mean what is the role that influencers play particularly nano influencers they play or micro influencers they play in you know ensuring that there is much dialogue and passing off the the passing on the product to the customer in the right way so how do you work towards it okay so we actually provide a total solution in terms of influencer campaign for brands and advertisers and so starting from communicating with the brands about what kind of products they want to promote on social networks and what kind of influencers they are looking for to do the campaign we started with with a strict data-driven methodology so basically we have a database of tens of thousands if not millions of influencers in our database and just screen just screen a list a list of influencers so that we can give the list to the advertisers saying that okay hey these are the influencers we think are suitable and are capable of promoting your products and these are and you can short list them like pick 40 or 30 of them and as the final list you know for promoting your products and then we started communicating on the influencer side saying that hey i got a brand now who wants to sell this semantics new stuff on social networks are you are you interested if we are interested we can start planning the creative and the contents in the short videos you will be doing on social network and so that that's how we engage with brands and advertisers and influencers on both sides so we agree kind of bridge between them so we are actually a mess maker between brands and influencers yeah and what particularly i mean you know as a startup what kind of challenges have you faced and then what kind of opportunities you also enjoyed during this pandemic i mean obviously everybody found the that there was a big need for them to do digital transformation and do the turnaround in the quickest time so what kind of opportunities did it bring to you and also what kind of challenges you faced particularly there was a pandemic for you as well so you know putting up teams and then trying to help the retailers on the ground or brands on the ground so what you know so how was it for you okay okay so as a startup you know we are always worried about that we will be running out of money where we can we can find you know the the best talents in the world so people and money are always you know a startup is worrying about so but it turns out the of the pandemic um the the things we are worried now is that we haven't we haven't seen any you know silver lining you know um we haven't seen any end to this pandemic until now and uh the whole world the the the global economy is so uncertain you know for um for the next or even two to five years and so it's really hard for us to plan restores it you know ahead and uh we can we can always uh now we we can we can only talk about what we we should be doing in the next quarter but next but not next year I think everyone is the same we can only look at next quarter but not next year and especially especially um there there are so many uncertainties including pandemic including um America's elections coming in your life in November and so so the uncertainty is always the thing we worry about but during the pandemic um we are actually seeing uh people are picking up the pace transforming their business especially for those who are not digital native and who are not internet companies and and so so I think people are now people now aware of they really had a digital future there and the the digital um tools and the ai solutions they they they become pretty pretty much mature for the past 10 years and they they have a quick way and they they they can easily adopt these solutions um in in a very good fashion and so so for for as the example we just talked about uh ULA liver in Philippines so for a typical uh for a typical typical retail store a retail chain uh to use our solution it took only two weeks to implement new business online and so they suddenly they they they are aware that okay um challenges also mean opportunities and so we we we we are still positive about this this um the pandemic even though it's really really bad everyone is upset and especially we cannot travel at all right now and so engaging with customers is is a major challenge for our team right now and so we we hope the pandemic can end as soon as possible the vaccine is there so yeah no i totally agree and what what are the you said that you know raising capital uh not running out of money is one of the biggest challenges that's always there so you know what what what are your tips of uh on raising capital to young startups i mean you know today particularly in the pandemic how how can they still ensure that they're able to raise capital and stay afloat mm-hmm yeah i i think for um for any startup now i i think everyone should really take a pragmatic approach you know to the money and uh to the things they are doing so let's just take icala as an example ourselves so uh for the first five years of icala uh we we position ourselves as a product company and we are proud of um building great products you know for customers and for um for brands but it um but it turns out that the business model is also an important part of your startup journey i think most entrepreneurs or startup founders they are they are really optimistic about what they are doing and and so much so that they think they they their product will be a blockbuster and once they launch it online but that that never happened and so for the next five years of icala's journey we we uh we completely rearchitect how we we work and we put revenue and sales as a one of the most important part of our business now and so we align and and we also educate our employees to be customer-centric because solving customers problem is the most important and so this will be even so after the pandemic happened because uh investors and the banks uh they are now really careful about giving money you know to a new business because the because of the uncertainties going forward and so every entrepreneur every founder should be real should be really realistic now and focus on solving problems focus on value creation and value capture you know from your customer and that's how you you are going to raise money successfully successfully in the coming years yeah that's my suggestion absolutely uh bang on there and what kind of growth have you seen in terms of percentage terms uh during the last six months during the last six months the challenges okay um first of all um actually uh we are seeing that uh employees um turnover rate is getting up is going up especially in remote offices uh because we can travel now and that so people management would become a challenge for even for um i call this this kind of internet native companies and uh we are so comfortable with working remotely you know at home or or in the coffee shop but still if you cannot travel there are some um key partnership or key engagement you cannot do with your customers and uh that would be hard that would be hard to you know close mega deals you know with with big clients um in other places and so that's a major challenge we are seeing now so i can say we we are lucky because we are still seeing our revenue is growing um by um averagely um 40 percent year over year during the pandemic and uh that's lucky for us but we are still seeing challenges of business travel and people management you know in this kind of unusual circumstance sure well uh that springs us to the end of the tech talks for this episode uh thank you very much for talking to us sega you know the fun some fantastic insights that you brought both for the community which is not a native and are trying to digitize themselves as well as uh you know for young startups who are today looking to grow their businesses pandemic is of course putting them back but they need to sort of get that get on the front foot and see what they can do best um and uh you know uh if you have some questions for sega please answer on our facebook like talk and we try to get him to answer uh them for you and uh next time hopefully we look to meet sega really in person the pandemic is really over and out thank you very much for joining us thank you for having me today too thank you so much yeah thank you