Creating the ecommerce experience for B2B procurement with Eezee CEO and co-founder Logan Tan24 min read

“The beauty of B2B is that it is in such an infancy stage, where the future technology is actually first being implemented on the consumer front.”

About the Episode

Many founders become founders because of the pain points they experience firsthand. Logan Tan is no different. His experience as head of procurement for a construction firm drove him to pursue an idea which has now become Singapore’s first and largest online B2B marketplace for maintenance, repair, and operations supplies. In this episode, Eezee CEO and co-founder Logan Tan shares with us:  
  • how COVID19 became an inflection point for the business
  • how Eezee works with enterprise software companies like SAP and Coupa to bring the seamlessness of the B2C e-commerce experience to B2B procurement
  • the company’s upcoming initiatives, including connecting Singapore SMEs to more than four million Chinese businesses as part of the Singapore-Shenzhen Smart City Initiative
This episode was recorded on Zoom, 20 June 2020.

Timeline

00:51 How did Logan start Eezee?;

1:49 What was the initial reaction of the market to Eezee?;

5:05 What was the inflection point for businesses to become customers?;

6:38 What has the changed dynamic during COVID19 crisis meant for Eezee as a platform?;

12:02 How will the procurement experience change post-crisis?;

13:24 How is Eezee scaling the accessibility of their marketplace?;

17:19 What’s under the hood for Eezee in the next five years?;

20:13 What does the Singapore-Shenzhen Smart City Initiative mean for their businesses?;

23:01 What is Logan’s take on the future of Southeast Asia’s procurement space five to ten years down the road?;

Transcript

Logan: Hi everyone, as Paulo has introduced, I’m the CEO and co-founder of Eezee. My name is Logan Tan. Previously, I was the head of procurement in a local construction firm, and we were buying things, from all the ways from excavators to pen and paper. And that was when I started realizing that having the same process just to process two different types of items we were buying. Of course, we have excavators that are high-value items, and then we had pen and paper which are low-value items. And that’s when I started realizing there needed to be a separate process. And back then in 2017 that was the rise of Redmart, Lazada, all the B2C ecommerce and that’s when I started to think about how I can replicate the whole B2C consumer experience onto the business front, especially in terms of procurement for pen and paper rather than high-value items. That’s when and how I started Eezee. 

Paulo: You mentioned this pain point from your own personal experience. When you eventually introduced this service into the market, what was the initial reaction? 

Logan: In terms of B2B, let’s look at businesses in the retail sector or even traditional brick and mortar companies. Their understanding of digital technology is still relatively limited, even though a lot of them do recognize the need to go online or to future-proof their business. It’s like the dilemma of your brick and mortar vs ecommerce store? Both have a separate process and a very separate way of structuring the business. For brick and mortar stores, for example, typically in B2B, it goes by lack of transparency. There’s a walk-in, they request for a pen, different people that walk in, they give different pricing, and that’s how B2B works. If you are someone from Shell, you walk in, they give you a better price. If you are an ABC company from somewhere, they will give you a higher price when you walk in. That’s how B2B used to work.

As you go online, that couldn’t happen anymore. You kind of have to digitalise the product, fix the pricing onto the platform, and then market it out to the world. So regardless of who and where you’re coming from, you sort of need to regard them as the same client. And that is fairly tricky. And that’s why when we first started we had a huge difficulty trying to convince especially the brick and mortar companies to go online and change the way on how they structure their product, whether it be their pricing and then preparation of their digital information. And that’s the first step. 

When I first started as the head of procurement in the previous construction firm, that’s when I realized a lot of traditional ways of doing things. If I want to buy a pen, I have to go to a retailer and ask them, “How much is this pen? And give me a quotation.” Basically [a quotation] is a document that shows you the pricing of the product. And every single time you want to purchase, you have to ask them for this document. And that is the difficulty that I faced and I realized after speaking to some of them that they do want to go online and they recognize the need to, they just don’t know how to, whether it be using Shopify or whether it be using [commerce]. 

So I thought of the grand idea where I build the platform where all these businesses don’t really need to think about, “Which platform do I have to use? How do I design it? How do I structure the flow of the user experience?” So I thought about using the platform idea which is the marketplace, a standardized product, where all these businesses can come online and then list their products for free, and if they sell, we take a commission. So it’s a win-win situation on both sides, without the business owners going through the thought process and the initial resistance is very high if they don’t even know how to digitalize and how to go into the ecommerce space, and that’s how we initially started. It wasn’t smooth-sailing but as we went, a lot more business owners joined, and as their competitors joined us on our platform, more and more retailers have started hopping on the bandwagon, and that’s the trend we’re seeing now. 

Paulo: Basically this whole story you’ve just told us is the story of digitalization, that conversion from brick and mortar to be able to do things more online. You mentioned at the start, you had difficulty trying to convince them, and then later on, now you’ve been able to convince a lot of businesses to go on your platform, and you have several thousands of them on your platform. What was the inflection point for them? What was the main reason you think that they changed their mind? 

Logan: The first reason is mainly that other people are doing it. It’s human behaviour right? If they see some of their competitors that’s already on our platform, the more chances that they will join our platform, because they don’t want to be left out. There’s still a lot of education going on between Eezee and the brick and mortar companies; there’s still a lot of engagement from our side trying to convince. 

The inflection point really happened during the COVID era, where all these companies instead of us reaching out to them, the brick and mortar companies, they were reaching out to us and instead of engaging our account managers, all these people they already have the knowledge of how to use the online ecommerce portal, how to list the product, and that’s actually just recently that we realized that there’s an influx of brick and mortar companies coming through our platform. 

We have spent two years looking into the future, right? Two years of getting as many companies as possible on board, and when COVID hit, we became the platform of choice for the B2B world, because all the retailers can’t operate anymore. You can’t go down to the warehouse or a retail store just to buy your products if you’re nearby, because COVID hits and you’re not allowed to meet your suppliers or not allowed to have face-to-face meetings. And that’s when they saw the immediate need to transition online, and I believe that that was our real inflection point. 

Paulo: It’s very recent, actually, you mentioned it was COVID that has really changed the dynamic from you going out to business and now it’s the businesses going to you guys. So could you describe what that has meant for Eezee as a platform? 

Logan: Initially when I first started, the B2B marketplace is still relatively new, it’s still in the infancy stage. And we are starting to see that businesses recognize the need to digitalize and that is very important because as a marketplace there are always two sides of the story. 

For the first one and a half years we were very focused on the supply side because, without the suppliers, there’s nothing for the buyers to purchase right? So we were very focused on helping local brick and mortar companies make the best product information on our portal so that the buyers can make informed choices. And of course having a good supplier relationship with them, trying to negotiate better pricing on the portal so our business buyers can benefit from that. 

And then if you look at the buyer standpoint, within this COVID era, actually during the two months of circuit breaker, we have seen a rise and spike in meetings over conference call just for them to reach out to us and say, “Hey during this COVID I want to explore trying to use ecommerce to make purchases for my organization.” And that has never been on the mind of many companies. 

Let’s face it, buying pen and paper is not necessarily the topmost priority for the majority of the companies, but there’s this pain point that you are buying all these low-hanging items with high frequency that occupies a majority of your manpower’s time but it’s not substantial enough for you to go and solve it in the process standpoint because it requires restructuring of the entire organization process flow just to tackle a problem that has been there for the past thirty, forty years. And COVID19 has really helped us in terms of this circuit breaker for everyone to rethink how they are doing things. And the government has been pushing for businesses to digitalize. And I think we are seeing a wave where the government recognizes the need and also, of course, it’s a multi-pronged approach. People are starting to see this trend, and business leaders are recognizing the need, it could be influenced by the government, it could be influenced from their peers from their industry, it could be because of COVDD. So there are multiple factors that are influencing them.    

And of course, they, as a large organization, it takes time for them to slowly migrate their processes. It’s not an overnight process. So COVID19 has helped us in educating the organization to rethink their processes and how they can future-proof themselves without a huge impact and supply chain has been number one topic around the world because of the mask shortage because of the sanitizer shortage. Majority of all these projects come from a variety of countries, China majority, Indonesia and Vietnam. And when COVID19 hit, they shut down the entire supply. And that’s actually when a lot of business they were actually hit by this shock, this shock that has never happened before.

They had never received shortages in terms of their supply chain, and they had never received a factory unable to export their products. That kind of helps them rethink how they want to do their supply chain, especially putting in the limelight buying all of these virus-related products. And our platform has been the beneficiary of this during that period. What happened was that there was an influx of inquiries or orders on these virus-related products. Due to our interview with them, we found out that the majority of these larger enterprises only have a few selected vendors in every single category. And if you look at process flow, onboarding a supplier in a business standpoint or a corporation standpoint has been very very tedious. They go through multi-layer checks that they have to validate the suppliers, but currently, our platform does it for them. And we can do it at scale. Every single one category we have 20 [over]suppliers in every single category. And what it does and means to every single organization that’s online with us right, is that just by onboarding and registering their account they get access to all these vendors without going through all the checks. Eezee does the verification for them and makes sure they are a legitimate supplier; they are selling legitimate goods. We check all this when they onboard. 

And that’s when the network effect will come in, right? As the suppliers come on, they just have to do one-time verification, and they can sell to the thousands of businesses that are out there on the platform. Whereas from the buyer’s standpoint, they don’t have to go and onboard 20 [over]suppliers just because they want to buy a mask. There’s no way that in normal time, that they will have enough demand to maintain the relationship with the supplier in a particular category. Let’s say there are 23 suppliers selling masks. 

And that’s what our platform can do. Our platform creates a common ground where all these businesses can come in. They can compare which suppliers sell the most competitive masks, or the mask that suits their requirements — the certain certification that is required — and then they can make the purchase and check out immediately, rather than having to wait for days on end for the suppliers to reply to them. And that’s what we have been seeing in the market. 

Paulo: If there’s one way to really summarize what you’ve just shared, it’s really the flexibility that you’re able to give to both ends of the marketplace. I think there’s a recurring question across industries whether or not the digitalisation that COVID19 has induced will carry on for the long-term and will it be sustainable? Will the new behaviours that we’re seeing now be drawn out for the long-term? What’s your take in terms of the procurement experience in Southeast Asia, how will it be different coming out of this crisis? 

Logan: I think in terms of coming out of this crisis, a lot of business leaders have been forced to rethink their strategy and their business processes, and how they can future-proof themselves. And we have seen actually within these two months, that even some of the business leaders, even though they are not in the office, or their business is not operating, but they are actually taking active steps to onboard onto our platform within their organization. So they are taking this downtime to actually transform the way that they are doing things. This is a once-in-a-lifetime pandemic, right? And like what the minister has said, in the future there are going to be more cases like that, there are going to be more viruses that are going to sprout up. And when people, you know, they are once bitten, twice shy right? And how I see that coming out of Southeast Asia, a lot of businesses will be forced to go online and transform their entire processes. 

Paulo: I think there’s this learning curve, and then businesses are coming out of this learning curve, and they’re becoming more prepared to face similar crises as you mentioned. What does that mean for Eezee as a platform? Right now you’ve talked a lot about the marketplace, how will this scale moving forward as more businesses as you mentioned become digitalised and want this kind of offering? How will you make it easier for them to access it and integrate it into their business operations? 

Logan: There’s one thing that we have been exploring for the past few months, and it’s something we have launched recently, it’s the integration to procurement software. While we were developing our product, we were thinking about how we are going to differentiate ourselves from the likes of B2C commerce or C2C commerce like Carousell, Lazada, and Qoo10. What can we do that will be different from what they can do and what they can offer? And then what do our clients face on a daily basis? So we constantly ask ourselves, and as we onboard more and more businesses or corporations on the platform, we constantly ask them what are the problems they are facing? Any issues or anything that we can improve? 

And that’s when we realized that there are multiple issues after onboarding our platform that they face. And us always helping our clients have the best experience possible on the platform, and to solve the pain point that they have been facing whether it be using our platform, or using their own procurement system, it’s to be able to fuse these two systems together so that they can have an end-to-end experience without having to manage two different logins, and have a seamless data transfer back into their procurement system.

Because if you look at it, where I came from in the construction industry, we were actually using SAP Ariba to make purchases. Although SAP Ariba is a relatively new software that has been in the market for a really long time, really established with all the features, yet they couldn’t solve a particular thing that we are solving which is catalogue purchasing. And in order for an external party to come into SAP Ariba, and to have that end-to-end flow, it requires a deep integration, and as everyone knows in the B2B world, integrating with a huge software company like SAP and Oracle, all this is not something that is very simple.    

What we have done for the past few months is that we have figured out that this is one of the growth strategies that we want to go towards. And what it means is that by leveraging and integrating our platform into these procurement software, we are actually leveraging on their network of customers, because SAP has a huge base of enterprise clients, and we only need to do the integration once. After doing the integration once, it’s about selling this integration feature to every single one of the SAP clients, and that’s why we always call these procurement software [companies] our partners. 

Let’s take a step back. So why will SAP want to let us integrate? So SAP has the same analogy as us. By putting their client first, how do they give their clients a very seamless procurement experience? And it’s by working with us. By integrating with us, SAP clients don’t actually have to leave the platform to actually make a procurement purchase. Compared to previously, they actually have to leave the procurement software, source for the products, and then they come back to the platform again and key in the details. Whereas now, they just have to click a button, access our portal, and it’s still within the SAP software. After they check out, all the information will be passed back to the SAP Ariba with all the information pre-filled. And that’s the thing we can do with this integration. 

We are seeing a very exciting trend that has been ongoing with a lot of companies engaging us to do the integration, along with our partners also advertising for us or advocating us to their clients because they see it’s a plus point. For them, their clients don’t get to leave the platform. And that’s what they want. They want you to use their platform even more. And what we want all these transactions to go through us. We want to facilitate the trade and make procurement of these products as seamless as possible. 

Paulo: It seems like it’s a win for these software [companies] like SAP Ariba and Coupa, and it’s also a win for the businesses, the buyers right? And it’s also a win for you guys cause your network grows as well. And you’ve transitioned from just being a marketplace to now having these integrations. What’s next for Eezee as an ecosystem in the next five years? 

Logan: Yeah that’s a great question. We are always thinking about how we can further improve the whole procurement or supply chain process. And recently we are actually very proud to announce that we are going through building our first prototype for a smart machine, similar to the Amazon Go concept. You see the beauty of B2B is that it is in such an infancy stage, where the future of technologies is actually first being implemented on the consumer front. And then how we are looking at things is we are looking at how the consumer retail is playing out, how Amazon is doing their logistics and how they are building cool concepts like Amazon Go. 

When we first saw that idea, we were pitching to our end client on an idea where we can take over their warehouse and fully digitalise it into a paperless warehouse. So now if you look at every single operating plant in Singapore, whether in aerospace or oil & gas industry, they always have a huge warehouse within their operating facility. And this warehouse is managed by a few people, maintaining the inventory to reduce the supply chain lead time from the supplier, from the placement of order to the production floor. 

And one of the concepts we’re exploring is the Amazon Go concept in the B2B world, where in all these industrial facilities, we will have software to take over the entire warehouse and then digitalise the entire concept. What it means in the future is that when you want to take for example a screw, from the warehouse, you just have to open up the Eezee, scan it, walk in, and you take a box of screws and then you walk out. And that will automatically issue out a purchase order — all this documentation will be automated, and that’s what we are working towards. 

We want to bring the whole ecommerce experience to real life, where you walk in, and then you pick the items from the stall, and then you walk out, and that’s the whole physical experience of ecommerce and to make that even more seamless for our end clients. And what it means for end clients is that they don’t have to hire people to sit there and process documentation because they have to draw certain inventory and then they have to keep track of every inventory that is being drawn out of the warehouse, and as well as managing the cash flow, how much inventory to keep in the warehouse, etc, etc. So we are actually replicating the whole solution and then customizing bits and pieces of it to feed into the B2B world. That’s what we have been building towards the future of ecommerce.  

Paulo: Very interesting how you’ve already made the online experience seamless, now you’re trying to make the physical experience also seamless right for this B2B commerce. But in the meantime, you also have exciting news with regards to the Singapore-Shenzhen Smart City Initiative. So I’ve read that you guys are part of an initiative where you guys will be connecting Singapore SMEs to more than four million Chinese businesses. So it sounds like huge network growth. Could you tell us more about this initiative?  

Logan: So our initial vision really was to help connect businesses within Singapore, and our ultimate vision is to connect them globally. And that’s why this partnership is really really important because what it does is that partners that we have which is OneConnect, backed by one of the largest insurers in China, called PingAn, and this is their technology firm right? They already have a network of four million SMEs in China. By connecting these two platforms which are Eezee and OneConnect platform together, we are enabling digital trade between two countries. And this is one of the first that Singapore and China have done. 

What it benefits is being able to accelerate the entire process of trading. Previously there wasn’t really an intermediary to connect these two. If you want to buy certain things, either you make a physical trip down to China, to meet with the suppliers and then meet with the buyer to sell your catalogue right? But now, everything is facilitated. We have our network of sellers. They have their network of buyers. And then if we connect both of them together, they are able to transact seamlessly between the two countries. Cross-border trade has always been a major pain point of any business, whether it be you are buying or selling, because of trust. 

If you want to buy something overseas, you always run into this dilemma of whether you should pay for the goods first or whether you should receive the goods and then pay for the goods. And that’s why it’s important to work through a platform like Eezee and OneConnect. Because the platform essentially becomes the intermediary to facilitate the trade, to say, “Hey you have an intent to buy a product, why don’t you facilitate through our platform? Our platform will make sure that once you receive the goods and it’s in good order, then we will release the money. And that’s when the trust is built because now we have our own network and this network trusts us in our own country. Similarly, for OneConnect they have a network of millions of enterprises on it, and they trust that platform in China. 

By connecting both of these platforms together, we establish a bridge between the trust and to be able to connect the network that we have. This is one of the projects that has been very interesting for us, and it has always been our vision to help the local enterprise market overseas. Of course, now we have done very well in Singapore and then we are taking small steps towards globalisation and helping them expand beyond. Of course, doing it vice versa as well, what it means for China enterprises to be able to sell goods to Singapore.

Paulo: Congratulations on the new project! You’ve talked a lot about creating trust in terms of cross-border trade, and also platformising the space. Could you relate that to how you see the procurement space in Southeast Asia for the next five to ten years? 

Logan: The B2B procurement space is still in very infancy, very early stage. Recently I spoke to someone in the consultancy field, he told me that across all the large organizations that they are seeing, out of ten there are probably only 0.5 companies out there that are really using catalogue purchasing or ecommerce as a way of catalogue purchasing and he sees a huge rush into this concept. There’s a lot more interest but of course, it takes time for these companies to onboard with them their processes. 

So if you look into it, from the perspective of all these larger corporates, they have operating facilities all over the world, whether it be in China, whether it be in Malaysia, and the products they are buying, like Pilot pen or A4 paper, they are actually the same brand of the product or a slightly different product, but every single country they go to they have to re-establish the entire supply chain. They have to work with different suppliers but they are actually buying the same type of product. 

Our vision is really to help these larger corporations, and wherever they go, Eezee will be a platform where they interface with to purchase these products. For example, you are entering into Malaysia, and you want to buy these products. All you have to do is to onboard Eezee’s platform in Malaysia, and you are able to access all the SMEs and all the retailers that are selling these products. And you just have to interface with one platform to gain the multitude of suppliers that’s already there. So regardless of where you are from as long as you want to enter a single country to purchase all your pen and paper, etc. and even hand tools, you are able to just hop onto the platform and then you gain access to all these suppliers. And that’s what we eventually hope to do in the next five to ten years.

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