Vietnam is fast becoming a leading player in the regional startup ecosystem. They have opened their economy and welcomed foreign investment, which has accelerated the growth of the industry. Now their startups have started to make waves in the region.
One such company is Society Pass, which is a Southeast Asian data-driven loyalty platform. The company recently launched the opening of its regional headquarters in Singapore to accelerate its growth in Southeast Asia. The new office will be the company’s designated Asia Pacific hub for regional business and expansion opportunities with particular focus on Vietnam, Indonesia and Philippines.
To find out more, we spoke to Dennis Nguyen, Founder, Chairman, and CEO, Society Pass to find out more.
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The company also announced the price of its initial public offering in November and became the first Vietnam-based company to complete a traditional IPO on Nasdaq. The company achieved US$28 million landmark IPO (including the exercise of over-allotment option) on Nasdaq last month and briefly crossed the historic US$1 billion market capitalization post-IPO.
They plan to use the funding from the IPO will be used to expand beyond Vietnam into other parts of Southeast Asia, and to connect investors to some of the fastest-growing retail e-commerce opportunities in the world.
Congrats on the recent IPO. Could you share how you expect to use the funds raised?
We are immensely proud to be the first Vietnam-based company to complete a traditional IPO on a stock market outside of Vietnam. As an acquisition-led technology company, this milestone marks the beginning of our next phase of growth. Funding from the IPO will be used to expand beyond Vietnam into other parts of Southeast Asia (SEA), particularly the VIP countries of Vietnam, Indonesia and the Philippines, and to connect investors to some of the fastest-growing retail e-commerce opportunities in the world. We want to transform e-commerce in SEA through acquisitions and partnerships fueled by our innovative and experienced leadership team.
We want to replicate our success in our target markets. We focus on acquiring companies in 5 major verticals: Lifestyle, Loyalty, F&B, Travel, Merchant Software. Besides these upcoming acquisitions, we expect to launch our Society Points – our very own loyalty platform – in early 2022. Society Pass sees Society Points replacing cash discounting in SEA. Post-launch, SMEs will issue Society Points as a means of discounting their products and services and thus create permanent loyalty with their customers. Consumers can redeem their Society Points at any merchant registered on the Society Pass ecosystem in any country.
Why Singapore? What are the factors that led you to setting up your APAC HQ in that market?
Given its technologically sophisticated infrastructure, highly educated and motivated workforce, and supportive regulations from governmental bodies, Singapore has long been considered to be an central gateway for businesses to enter the SEA.
As we are growing strongly after the IPO, this is a strategic step towards our larger plans for our expansion to SEA. Singapore’s strategic location enables us to be closer to our investors and partners, which will help us drive future growth and acquisition in the designated VIP countries.
Which markets in the region have the most potential for you?
We are very focused on the VIP markets of Vietnam, Indonesia and Philippines. As an acquisition-focused company specialising in the lifestyle, F&B and travel verticals we see many opportunities in our ‘VIP’ markets:
Vietnam, specifically, has been one of the fastest-growing economies within SEA over the past two decades. The country’s e-commerce is growing tremendously, reaching a scale of approximately 13.2 billion USD, and is expected to grow steadily from 2021 until 2025. Vietnam’s smartphone ownership rate has reached 96.9% and most of the time Vietnamese consumers spend online is for personal purposes. Rising consumer spending coupled with a high mobile penetration rate is very conducive for e-commerce companies to thrive.
Indonesia’s internet economy is forecasted to reach US$146 billion in 2025 with savvy online shoppers and an increasing number of merchants being eager to join the e-commerce rocket ship. The country’s total population is now around 275 million people with a high rate of urbanization (57%) and strong demand for food delivery, e-commerce and e-payment, attracting enormous interest from investors.
Philippines has been one of the most dynamic economies here in SEA. With increasing urbanization, a growing middle class, and a large and young population, Philippines’ economic dynamism is rooted in strong consumer demand supported by a vibrant labor market and robust remittances. The size of the Philippines’ internet economy is expected to increase 24% from US$17 billion in 2021 to US$40 billion in 2025. E-commerce contributed 3.4%, or US$12 billion (PHP599 billion), to the country’s GDP in 2020 and is targeted to grow by 22% to US$26 billion (PHP1.308 billion). In 2020, the Philippines’ mobile internet user penetration was nearly 72.1 percent, and was forecasted to reach 77.1 percent by 2025.
Rising consumer spending coupled with high mobile penetration rate is very conducive for e-commerce companies to thrive. Unlike developed countries which have reached maturity in their digital economies, developing countries are only now experiencing a surge in digital adoption, with large potential for future growth.
What are the challenges you foresee in scaling the company and how do you think you’ll be able to overcome them?
Despite the ongoing pandemic, the previous two years have seen tremendous growth in e-commerce, leading to an increase in expectations from customers and an increase in competition among the industry players.
With more product offerings, consumers demand better services and better product quality from the platforms. Additionally, an increasing number of brands have built their online presence within their own stores or joined the existing e-commerce platforms.
Following the successful re-launch of Leflair in Vietnam in September, our existing expertise in data analytics and other unique technology offerings delivers an enhanced customer experience is our unique service proposition in the region’s fast-growing e-commerce market.
With our proprietary IT architecture, Society Pass aggregates data across various touchpoints and builds a realistic view of consumer behavior. We believe that our Society Pass technology platform is a key enabler for the companies under our ecosystem to generate revenue by converting this aggregation of data into the creation of loyalty for our merchants, and connecting consumers and merchants in SEA.
What’s next for SoPa?
Society Pass’s success up to this point has been built through offering unique value for both consumers and merchants, along with the infrastructure supporting that exchange. We want to replicate our success in our target markets through our ongoing aggressive M&A initiatives in the pipeline. We are in discussion with a number of potential acquisition targets in the e-commerce space.