Soft-launched in July, Markato offers an online platform that connects retailers and buyers in Asia, enabling them to explore a diverse selection of premium independent brands from markets outside the region, primarily the US, Europe, and Australia.
At the same time, the platform aims to provide a pathway for global independent brands to expand their reach and establish partnerships with trusted retailers in Asia.
SEE ALSO: Starbucks’ Emmy Kan unpacks the coffee company’s future in Asia
Markato was founded by Brian Lo, previously general manager at the food delivery platform Deliveroo, and Martin Li, a former executive at Uber China whose mandate was to launch and scale Uber across mainland China and the Asia Pacific region.
Venture capitalist Lightspeed has led a seed round funding of USD 5 million for Markato, marking their first investment in Hong Kong. Other institutional funds and angel investors also participated in the funding round.
“As early Asia employees of Deliveroo and Uber, we have always been excited by cross-border marketplace businesses that solve large and complex problems. We were inspired by the success of other wholesale marketplaces, and we believe there was similar potential for such business models in the biggest retail market in the world,” says Li. “Our combination of experiences of digitizing a traditional industry (food and transportation) as well as building technology products that enable SMEs to grow puts us in an exciting position to solve these problems.”
Retail in Asia speaks with Brian Lo, co-founder of Markato.
RiA: Tell us about Markato. What was the impetus for establishing the platform, and how do you plan to revolutionise B2B retail?
Lo: Markato is a curated B2B wholesale marketplace that serves as a one-stop shop for retailers and buyers in Asia to source premium independent brands from around the world.
Asia’s retail industry has undergone significant change over the pandemic. Almost all retailers have some e-commerce presence, and digital payments have become commonplace. However, sourcing has been left behind in terms of technological adoption. Retailers still rely on attending trade shows across the globe, cold-emailing new brands, and some even fulfill orders with hand-filled forms and purchase orders. This is not only extremely expensive but also time consuming.
With Markato, we believe the technology can enable retailers and brands to do more business more easily. 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. We provide a one-stop-shop for product discovery of over 200 brands and 5,000 products, discounted logistics by aggregating shipments and innovative financing options for retailers. This enables brands to sell globally as seamlessly as if they were selling locally, and provides retailers an efficient experience sourcing the most interesting independent brands from around the world.
RiA: What are some challenges you currently see in Asia’s B2B retail industry, and how do you plan to address these as well as ‘democratise’ retail in Asia?
Lo: The B2B wholesale industry is ripe for transformation. It leans on a very traditional operational model, where it is very costly for retailers in Asia to source for new brands, especially from outside the region due to infrastructure inefficiencies and time-intensive offline processes. Retailers have to sift through a lot of clutter in order to source products from a giant universe of brands, with high inventory risk when procuring new products that are necessary to bring customers.
We want to unleash the power of access in the industry, and this is also Markato’s mission – to connect independent brands from around the world with trusted retailers and buyers in Asia. We are digitising brand discovery, streamlining logistics, international payments and overall experience to improve operational efficiencies for buyers and brands:
Retailers have a growing selection of over 200 premium independent brands from Europe, US and Australia with over 4,000 unique products. Over 80 percent are only available in Asia through Markato.
Our platform integrates cross-border payment and global end-to-end logistics, allowing retailers and buyers to save at least 20 percent of transaction fees and logistics costs. We also offer a 60-day Buy-Now-Pay-Later (BNPL) option for retailers, with a 90-day free returns feature to mitigate retailers’ risk from unsold inventory.
Retailers have an elevated product discovery experience at wholesale prices, with Markato providing them with bespoke recommendations of brands and high-quality products tailored to their needs.
Independent brands can leverage Markato to unlock their Asia retail opportunity, while also streamlining and managing their distribution to the region through one centralised platform. They can sell globally as easily as selling locally on Markato without compromising on brand integrity. Brands can grow their revenue across multiple new markets, and receive valuable data and insights that allow for better predictive decision-making on production and pricing.
Regardless of the scale of their businesses, we allow retailers in Asia and premium independent brands from around the world the ability to grow their revenue while lowering transaction costs, delighting end-consumers with better products at reasonable prices.
RiA: Can you share insights on the tech startup ecosystem and fundraising environment in Hong Kong from your experience?
Lo: Hong Kong’s tech startup ecosystem has expanded significantly over the last 10 years, with a particular focus on fintech, owing to its status as a global financial hub. Often, we forget Hong Kong is also one of the most important retail and logistics hubs, serving as a springboard to China and other Asian markets. We decided to base Markato HQ in Hong Kong, as Hong Kong provides significant advantages for cross-border logistics as well as for us to tap into the giant retail market with the fastest growing middle-class population in Asia.
Despite the challenging backdrop for startup funding, we are optimistic about the tech startup environment we operate in. Markato’s unique global marketplace, integrated infrastructure and network effects are recognised amongst investors not only in Hong Kong but also abroad. Our raise of USD 5 million in capital earlier this year in a seed-round funding led by Lightspeed, a global tier-1 VC, supported by other industry leaders is testament to that. Markato is also Lightspeed’s first investment in Hong Kong, which demonstrates the strengths of our value propositions along with the massive growth opportunity in the B2B wholesale and retail industry in Hong Kong and Asia.