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Taiwan AI startup iKala launches smart retail division to expand in Southeast Asia

iKala

This week, iKala, an AI martech startup based in Taiwan, announced the launch of a new division focusing on smart retail solutions, following the introduction of a series of cloud-based services to help businesses transform digitally.

Founded in 2011, the startup has gone through several pivots to become a multinational business as it is today. Starting from a live-streaming karaoke platform, iKala now operates two main divisions -- for cloud and retail solutions -- and offers services across Asia, from Japan, Taiwan, to countries in Southeast Asia like Vietnam, Thailand, and the Philippines. Their clients include Ogilvy, L’Oreal, Foodpanda, and others.

“As the pandemic hits the global market, iKala has seen a 45% QoQ growth in revenue due to the strong demand for digital transformation,” said co-founder and CEO Sega Cheng. iKala’s cloud division was launched earlier this year.

As ad blockers and AI drive a paradigm shift in digital marketing, iKala decided to jump into smart retail to help clients sell their products more effectively and efficiently in Southeast Asia, where social commerce is taking over the online shopping arena.

iKala co-founder & CEO Sega Cheng
Asia Gen. T

Cheng said the cloud division now makes up 60% to 70% of iKala’s revenue, “but as we expand in Southeast Asia, we are confident that the smart retail division will be on par with it within a year.”

A head start in social commerce

With 350 million Internet users in Southeast Asia and 90% connecting to the Internet via their smartphone, the opportunity for e-commerce businesses is massive. According to Google’s SEA e-conomy 2019 report, the size of the market is forecast to exceed $100 billion per annum by 2025.

It’s noteworthy that the region has seen a leapfrogging in e-commerce. “Before traditional e-commerce sites become widely used, local customers are already turning to sellers on social media,” Cheng said. By contrast, in other Asian countries like Japan and Taiwan, customers tend to shop on e-commerce sites rather than buying from individual sellers.

In response to this phenomenon, iKala has developed Shoplus, a social commerce solution that “turns a Facebook fan page into a online retail shop in ten seconds.” With visual recognition, natural language processing technologies, and AI chat bot, Shoplus helps social media sellers communicate with their customers efficiently and send out retargeting messages. The solution increases conversion rate by 20% and reduces labor costs by 80%.

During a citywide lockdown, the solution has also helped Unilever Philippines move physical shops online and significantly boost its ROAS.

With two main strategies -- integrating existing physical sales channels and exploring new channels on social media, iKala hopes to empower companies with AI solutions and help them drive sales performance, according to a press release.

By using AI to put together the vast amount of data gathered both offline and online, iKala said it’s able to provide a clear picture of how each customer behaves and allow enterprises to achieve precision marketing.

The company also boasts a proprietary technology that collects and analyzes data on social media platforms like Facebook, Youtube, and Instagram to help companies identify the best influencers they should work with to maximize the effectiveness of marketing campaigns.

Rise of East Asia

iKala said it aims to become a dominant player in nine Asian countries, from Taiwan and Japan to Malaysia and Indonesia.

“Even if Taiwan as a market cannot sustain the growth of a hugely successful startup company, it might be possible for multiple markets of the same size,” said Lee Feng Chien, the former Google Taiwan managing director. He has joined iKala in February as an independent board member.

The size of Taiwan’s population, at just 23 million, makes it challenging for a startup to scale up domestically. However, located at the center of East Asia, with Japan and Korea in the north and SEA in the south, the island nation offers a great opportunity for businesses to expand regionally. Collectively, the population of these countries stands at around 800 million.

Most East Asian countries have been managing the coronavirus crisis much more effectively than others, Chien said. Confident in the future of the region, he believes Taiwanese startups should work to get ahead of the game.

延伸閱讀

Bryan Chou
Journalist

Bryan Chou is a Taiwan-based and born journalist who writes about innovation and entrepreneurship for Business Next and Meet. Over the past five years, he has written for a student press, translated numerous magazine pieces, and worked as an intern in two startups. He believes what shapes him into who he is today is not only these experiences but the people he has interacted with and the stories he has learned from them.

He has a BA in Foreign languages and literatures from NTU. After graduation, he spent a year in Prague, traveling extensively around Europe to learn about the history and culture of the region from local people. Currently based in Taipei, he hopes to present the best of Taiwan to the world.