Nuffnang boss Ming Shen’s bold plan for e-commerce
Ming Shen is one of those serial entrepreneurs. He set up a holding company, Netccentric Pte. Ltd., with his partner, Timothy Tiah, while fresh out of the London School of Economics with the intention to launch multiple business ideas.
They started with blog advertising network Nuffnang in Penang with just two developers, one web developer and one web designer. Nuffnang 1.0, which Ming admitted was a really bad site, did the job. It was launched in Malaysia in Feb 2007 and then in Singapore in April the same year. Nuffnang now has five offices, based in Penang and Kuala Lumpur in Malaysia, Singapore, Manila in the Philippines and Melbourne in Australia respectively.
Netccentric now runs Nuffnang, social media ad network Churp Churp, web design firm RippleWerkz and their latest service, e-commerce solution provider Jipaban.
Ming recently expanded his job scope from focusing only on Nuffnang to a broader corporate development role at Netccentric. He now oversees the group’s four units while developing further projects for Netccentric. He has also been nominated for the Spirit of Enterprise Award 2010.
e27 caught up with Ming at his Netccentric office, nestled in a quiet spot amid the hustle and bustle of Little India, to find out more about what’s new at Nuffnang, his plans to turn Jipaban into an Amazon-like e-commerce firm, and his new role at Netccentric.
Jipaban is competing to be one of Asia’s Top 50 Apps. Like it? Vote for Jipaban here.
What’s new at Nuffnang
“We have about 160,000 bloggers. 3.2 million unique visitors per day. 97% of the blogs are exclusive to Nuffnang. So we are the market leader. “
The effect of the rise in social network advertising on Nuffnang
“Not really, because it is still a very small base. Although Nuffnang’s revenue is in the millions and the profits are in the millions also. It is still a very small market overall. This is like the whole of Asia-Pacific. Malaysia has an online ad-spend of US$15 million, Singapore US$22 million, Philipines about US$30 million and Australia alone is US$2.3 billion for just digital online. So it really doesn’t cause a dent, in fact there are too few options. Your offerings to advertise online are not too many.”
Nuffnang’s next move
“Nuffnang is going to continue doing what it does. At the same time, we always innovate, so we launch new products, services and campaigns. Beyond that, we launch new businesses like Churp Churp which basically does social media seeding. We use our database of influencers who are active on Facebook, Twitter and online forums to go in there and spread or seed messages and influence people. So Churp Churp takes care of the social media and social networking side. Nuffnang handles blogs and Churp Churp handles social media, so they complement each other. This allows us to do things on Facebook, for example, we can get our influencers to invite people to join a particular Facebook group.”
Why Nuffnang over Jipaban
“Nuffnang was a lot easier to do. Firstly, in terms of execution, programming-wise it was easier to do. Secondly, cost was significantly lower. The demands of Jipaban is a lot higher. When you go to e-commerce, it is not just about setting up an e-commerce platform. Proper e-commerce businesses, like Amazon, are not actually just e-commerce businesses. They are e-commerce with logistics behind it. There’s warehousing or delivery going behind the scenes. That is where Jipaban will ultimately go to. Finding a turnkey solution for people who want to sell online but don’t have the means to do so. So it is not just an online platform, you need a huge logistics network.
We totally pushed Jipaban aside. When you do a business you have to focus on it. So like what we did, we focused on growing the blog advertising business as good as we can. And we did it. It was definitely the right decision to do Nuffnang first because it now gives us a lot of stability, it gives us cash, it gives us resources, and also a network that we can actually tap on to grow Jipaban.
Today, Jipaban has 16,000 registered users, which is over a period of three-months. Honestly speaking, it is not easy to get 16,000 registered users. People going through a normal shopping mall and just browse……when you get them to register, it is something different. And this is all down to Nuffnang.”
Demographics of Jipaban
“Definitely more female-skewed at this point of time. Half the reason for that is because of the retail mix. The retail mix is very female oriented. That is not something that is going to remain the case. We are going to introduce a greater retail mix to attract more male buyers. The reason why the retail mix is currently as such is because blogshops are the lowest hanging fruits. They have a basis into e-commerce, they don’t have a good platform and Nuffnang knows all of them. Therefore, it is easy to put them in now. But when you see offline shops coming in, those from different backgrounds, that is when you are going to see diversity coming in and that’s where we are going to push for more advertising. Right now all the advertisings are done on Nuffnang, Facebook and other online venues. But once we achieve a better retail mix, we will go above the line to do advertising such as on buses, cabs and other offline media. That will kind of push us much further. “
Initial reaction to Jipaban
“The retailers’ reaction was definitely very encouraging in a way because they like the fact that it is easy for them to use and they have instant access to a market. The buyers’ reaction, I think it took some time to train up. We do have significant revenues, but is it at the optimum level? The answer is no. It takes time for people to get used to a particular concept.
And this is quite a radical concept. For example, for all the other online shops, you can just go in at free will to browse. On Jipaban, you have to go in, create an account, create your mall and add your things. It will take some time for it to sink in. But once it does, I think it will be very powerful. The whole reason why we went down this route was because it was the harder road, but we get demographics and we can target for example for in-mall promotions, once we know what your age is, who you are, what your buying patterns are we can do things. It is all in the database which you can easily organize, giving the retailers more power in terms of information. We can help them market to a specific group of people.”
Jipaban as a consultant
“Definitely. The whole point is we want to enable our retailers in any way that we can with the information that we have. Of course, we have to decide how the information is handled. Do we price the information? How do we price it? It is like the whole Google story whereby they price by using an auction system. When you have varying demands and limited resources, you need to decide how to price your resources and that is exactly what we would do. ”
Jipaban’s competitors
“I don’t think there are any competitors for Jipaban at this time. Sites like eBay are product-listings based, they are not shop-based. Even though eBay has eBay Shops, it is not the same concept whereby it is really shopfronts and malls. Our concept is really malls, shops and social networking. It is still a unique concept. I think a lot of companies are starting to try to merge social networking with shopping, but we are a very new concept so there are no competitors. “
What about Zozotown, which serves the Japanese market with a virtual mall portal — a similar concept to Jipaban?
“The basic concept is the same. and that is it has a somewhat central focus on shops instead of products. If you browse around though, this is not as central as ours. However, on the features level it is entirely different, for example, we focus on a customizable mall for each user. And we integrate it with social networking features. Both ways, features can be tweaked, and the ultimate USP (unique selling point) will always be retailers and variety.”
Expansion plans
“After Malaysia, it is endless. We could go to Australia, the Philippines, following the expansion path of Nuffnang because we have partners and networks there that we can use. Or it could go to a different country altogether like Japan and the US. It just depends on how we develop. The business model is much more of a fluid business plan than Nuffnang’s because consumer behavior is something that you cannot accurately predict. So you need to react to consumer behavior and change as you go along.”
Strength of Jipaban’s brand in an international market
“I think it will perform well. Singaporeans may look at Jipaban and think that it is a Hokkien thing but the reason why we also chose that was because we knew that when we go overseas we’ll actually market it more as a Japanese thing. Japan has kind of like a cult following. So what we are going to do is something like Ji-Pa-Ban. Right now it is like one word but when used overseas it may be split up into three words that people can remember, Ji-Pa-Ban, something like Clap-Clap. We’ll just get it into people’s head. At the end of the day, it is always going to have an Asian context, an Asian flavor to it, an Asian identity. That is not going to change, but how we identify it to people later is by doing this Japanese kind of style.”
RippleWerkz
“RippleWerkz is just a small web design company. What we felt as we were going out doing our rounds, meeting advertisers and stuff like that, we realize that a lot of them don’t have well designed sites even though they are very advanced companies. They have very old, flat, one-dimensional looking sites. So we thought, why not just help them? At the same time, it kind of work in with our purpose of helping to up the quality of blogs. Ultimately it is just synergistic of our business in totality. Nuffnang and Jipaban’s designs were all done by RippleWerkz.”
Role change
“How it changes me is that my time is much shorter now. It is so intense because I guide the overall direction of the company. I have three companies on this level, and I go into each company to see what they are doing. There’s always a new direction to take and a new strategy to take. I am kind of mentoring them so it is very intense. Dealing with one business, it can get very mundane. But when you are like going from one business to another, changing your mindset every time you walk into a different room. It is so fresh that the experience just passes you by.
New developments from Netccentric
“I love doing business and I like doing it right. I don’t do a business just for the sake of doing a business. There are new projects that are coming up, one will be launching in November so you should keep a lookout for that. There will also be some minor acquisitions within the companies so we might be taking over smaller companies here and there or we might be going through some joint ventures. Nuffnang will be expanding to at least one major territory this year. “
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