Kino Biotech: Easing the entry into China for SMEs through e-commerce

This article was first published on IE Singapore's website. Head here for more stories from its #SgGoesGlobal series.

Fierce. China's online retail shoppers are that, scooping up everything from toilet rolls to hairy crabs. Their insatiable appetite rang up US$758 billion in 2016, nearly twice the amount Americans spent and roughly 2.5 times Singapore's GDP. And there are predictions that China's retail e-commerce market will easily double by 2020. When that happens, Chinese online purchases will have surpassed those of the US, the UK, France, Germany and Japan – combined.

Heed the signs
The message is clear: For businesses and their brands to succeed in China, you need to go online. There's no ignoring the reality. Leading the push for Singaporean companies angling for a slice of the lucrative e-commerce pie is Kino Biotech, the creator of beauty products Kinohimitsu, Activa and Xpertise.

Back in 2013, the explosion of e-commerce activity in China convinced Kino Biotech that it was time to make another move into the world's most populous nation, after a failed attempt a few years before. July 2017 saw chief executive Chong Ka Wee and his team officially set up Kinofy to target Chinese consumers via WeChat, a popular messaging app currently fuelled by 938 million monthly active users – a 23-per cent increase year-on-year. Kinofy is a shopping platform that gives companies a comprehensive option to reach Chinese customers directly through affordable, customisable online stores. Beauty and wellness brands are Kino Biotech's priority for now.

But wait. Kino Biotech previously faltered in China, retreating after a costly stint (think high listing/distribution fees and marketing costs that ran into the hundreds of thousands). What makes it think it can succeed now?

"We, too, are an SME. We know what it's like to not have the tools to fight with MNCs. But right now, we do. We can go into the market and engage with confidence."

The not-so-secret sauce
By eschewing traditional retailing altogether, says Mr Chong. "Together with our cross-border license, simplified product registration, currency settlement in Singapore, fulfilment services, established customs processes, and a comprehensive suite of communication, engagement, marketing and analytics tools – we facilitate an easy entrance." All merchants have to do is ship their goods to the Kinofy warehouse and develop marketing strategies. Possibly the most appealing aspect of Kino Biotech's proposition: Ballooning costs will be minimised.

Right infrastructure, right systems, right people
With Kinofy, it's never been easier to set up shop in China but Mr Chong makes no bones about the hard work required to get the platform up and running. One area clamouring for Mr Chong's attention was, and still is, training.

"Kino Biotech has moved from process innovation to business innovation," he explains. "To acquire merchants, we have to hire new people for business development. They must understand the value chain of the business and know how to offer solutions, in order to act as catalysts to help merchants accelerate their growth," he says.

Mr Chong is quick to point out that all employees have to be receptive to digital training as well as adapt to new situations. Topping the list of must-have qualities is attitude, which makes sense. Leadership guru Mark Murphy has found that 89 per cent of new hires fail because of – you guessed it – attitude.

"We are," he pauses, before saying in Mandarin, "摸着石头过河 (crossing the river by feeling the stones)." The way he sees it: Challenges are inevitable. Everyone involved, from top to bottom, has to be open, willing and able to embrace them.

Kino Biotech has pumped in money on local Professional Conversion Programmes and overseas courses for staff. Mr Chong believes that you cannot skimp on investments in foundation-building and resources. That IE Singapore was on hand to help has been a huge bonus.

The best help available
Both SPRING and IE worked closely with Kino Biotech to pick up best practices during overseas study trips. These learnings enabled them to enhance their manpower and brand strategies which resulted in a new 10-member team focusing on digital design and marketing. IE also provided a Global Company Partnership Grant to put the e-commerce plan in action.

Mr Chong recalls how IE's invaluable insights on cross-border trade fast-tracked the company towards achieving its e-commerce ambition.

Even at this stage, Kino Biotech, SPRING and IE are still working closely together. Most recently, IE referred several companies to Kinofy. Some retailers and pharmaceutical players have already signed up.

Onward and upward
In three to five years, Mr Chong hopes to serve 3,000 companies. His focus for phase one is on Singapore companies.

"We, too, are an SME. We know what it's like to not have the tools to fight with MNCs. But right now, we do. We can go into the market and engage with confidence," he says.

Combine Kinofy's offerings with China's affinity for online shopping and the keen awareness among local companies that e-commerce is an important – if not the most important – platform to gain headway in China, Kino Biotech is definitely exactly where it wants to be.

This article was first published on IE Singapore's website. Head here for more stories from its #SgGoesGlobal series.