Hong Kong Wholesale Marketplace Aims to Bring Western Wares to Asia Shoppers
A new online wholesale marketplace aims to provide Asian retailers with access to lifestyle products from across the globe, while removing some of the friction associated with cross-border commerce.
Hong Kong-based Markato aims to become a one-stop shop for businesses serving the Asian market, allowing them to source and fulfill products from premium home goods, beauty, wellness and accessories brands from Europe, the U.S., the U.K. and Australia. In turn, brands can access customers in the region, as Asia’s fast-growing middle-class population shows growing interest in global brands.
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Founded by entrepreneurs and tech industry veterans Brian Lo and Martin Li, Markato raised $5 million in a seed funding round led by Lightspeed Venture Partners this spring. It plans to expand in Asia over the next year, with Singapore in its sights as a potential B2B hub in Southeast Asia. The company soft launched in July with more than 200 brands and 4,000 products from Western markets, 80 percent of which were not previously available in Asia. Over the coming months, the startup plans to broaden its vendor base to more than 2,000 brands.
“Retailers always need new brands to bring in more customers, and brands from around the world can’t wait to have access to trusted retailers in Asia,” Lo told Sourcing Journal. The digitized product discovery platform was designed to provide an efficient sourcing experience for retailers, synthesizing their input with live market trends. Markato’s curation system spits out hundreds of recommendations, 80 percent of which are currently only available in Asia through the platform, he added.
Sourcing brands from outside of Asia tends to be costly for the region’s retailers, given the inefficiencies of coordinating with offshore vendors, the logistics of bringing products across borders, and the inventory risk associated with bringing unfamiliar products to an untested market.
“As we are streamlining logistics and international payments, we can improve operational efficiencies enabling more than 20 percent of transaction and logistics cost-savings for retailers and buyers, that can be passed down to end-consumers,” Lo said. The platform offers retailers a 60-day buy now, pay later option on product, and an extended 90-day return window that mitigates the risk of unsold inventory. “All of these benefits are aimed at reducing retailers’ risk of trying out new products while allowing them to increase customer traffic and sales opportunities with new and unique products.”
“By empowering this access, this would in turn enable retailers to delight their customers by offering emerging brands and better products at reasonable prices,” Lo added. Early adopters include popular Hong Kong fashion and lifestyle retailer Kapok, independent boutiques like Co Ninety Select Shop and TLE Wellness Select Shop. “We also cater to ‘buy-to-use’ segment customers, such as hospitality and restaurant groups,” like JIA Group, which owns several restaurants in the region.
“The middle-class consumers in Asia have strong purchasing power and what they look for in their purchases have evolved, where there is a greater desire for ‘premiumization,’” Li added. Consumers are keen on purchasing from “brands with a unique story and aesthetic,” and have shown interest in home items like stacked candles, eco-friendly skincare and novelty paper products, he said. “These initial purchasing trends we have seen from our marketplace demonstrate how buyers in Asia are always looking out for, and want access to, more unique brands and high-quality premium products from the U.S. and Europe.” Markato aims to broaden the platform’s assortment as it brings new brands into the fold.
“There are many amazing independent brands around the world that simply do not have the network, resources or know-how to be present and sell to retailers and buyers in Asia,” Lo said. “It can often be difficult for them to prospect new buyers in Asia, especially if their resources or market knowledge is limited.”
The marketplace gives brands a means of selling globally, tapping into a market they might not be able to access on their own and managing distribution through a centralized platform. “They can also reduce their customer acquisition cost and operating costs, and leverage valuable pricing, data analytics and recommendations provided by Markato to grow their business,” he added.
The company has implemented a stringent vetting process for brands to verify their reliability as well as product quality and authenticity. Dedicated “success partners” are assigned to each retailer that is onboarded onto the platform in order to better understand their needs, their product portfolios and the retail market trends driving their unique businesses.
While platform aims to expand its reach beyond Hong Kong in the coming months, Li said the market was the optimal locale for the firm’s headquarters, as it provides significant advantages for cross-border logistics and central access to a giant retail market.
“Hong Kong has a favorable retail market and business environment, with the tech startup ecosystem expanding significantly over the last 10 years,” he explained. “We see a lot of potential in the market, and it is conducive to serve as a hub for us for cross-border commerce. Often, we forget Hong Kong is also one of the most important retail and logistics hubs, serving as a springboard to other Asian markets.”
The proposition’s appeal prompted global investment firm Lightspeed’s first-ever investment in the country. “We’re excited to partner with Brian and Martin as they build Markato,” the VC’s partner, Rahul Taneja, said. “Their vision to serve independent businesses in Asia and enable access to the best products globally is a compelling one.”
“Early progress on the platform is very encouraging and we strongly believe they are the perfect team to transform retailers’ end-to-end experience in Asia,” he added.
