Rapid developments in the semiconductor industry have their downside: well-working equipment ends up in landfills prematurely due to technology obsolescence. This, according to Roger Poh, Director, J316, is the gap his homegrown company addresses, finding ‘new homes’ for these equipment through their extensive network of customers.
Operating with a lean team out of Singapore, the company now enjoys a global presence, one that is supported by Payoneer, whose solutions facilitate their e-payments. SMEhorizon speaks with Roger Poh on his company’s expansion beyond local shores, and his advice for other SMEs seeking to follow this trajectory. Payoneer’s Nagesh Devata, SVP, GTM APAC at Payoneer also weighs in on the notable trends within the e-commerce payments space, and how SMEs can choose a payments partner suited for their needs.
The humble beginnings of a global presence
Founded in 2014, J316 started out small but today has a sizable warehouse that accommodates the global growing demand for its service. “Over 90% of our sales come from a global customer network, such as the United States, South Korea, Taiwan, and China,” says Poh. “Besides fabrication plants such as Applied Materials, Samsung, and Texas Instruments, we work closely with refurbishers to bring used equipment and parts back to life.”
Providing their service through e-bay and their own company website means access to the global network. However, tapping on this has not been without its challenges. “Entering new markets required J316 to quickly learn and adapt to each country’s local regulations to continue fulfilling our customers’ needs,” says Poh. One challenge is getting hit by China’s recent lockdown measures, which led to shipment delays.
J316’s journey is part of the current digital commerce landscape, where both businesses and customers transact more readily across borders on the internet. “Customers are increasingly becoming digital-first in their shopping journey, says Devata, “with little qualms about buying things online or making cross-border purchases. This is a huge opportunity for SMBs to reach potential customers online, anytime and anywhere.
“We see a raft of smaller brands stepping up their e-commerce business during the pandemic, ranging from handmade craft to books and electronics. Be it through established marketplaces like eBay or Amazon, or through social networks and their own dedicated webstore, SMBs can now reach a global audience.”
Finding an e-commerce partner to scale the business
According to Devata, this new landscape highlights the need for SMBs to adopt a holistic payments strategy, including catering to the preferred local payment methods, having multi-currency accounts and able to receive funds from marketplaces and international clients, as well as making payments to their suppliers around the world.
“When internationalizing a new e-commerce business,” he continues, “SMBs may face the challenge of high transactional FX fees, complexities in sending and receiving payments in multiple foreign currencies – all due to economies of scale.”
“Leaning on a trusted payments provider with a transparent fee structure will encourage the business to focus on their growth plans.
Poh, in a similar sentiment, recalls his company leveraging Payoneer’s payment services through eBay, where they transacted with global customers. This allowed the platform and international customers to pay in their preferred currency which was then received in their local Singapore account. It is the availability and ease of such capabilities that makes international ventures successful.
Seizing opportunities offered during the pandemic
The e-commerce word has moved quickly during the pandemic, with new technologies emerging to address the needs of an increasingly sophisticated consumer. “The pandemic sped up changes across several verticals”, says Devata, “and we expect that acceleration to continue.”
These changes, he continues, include the expansion of the Direct-to-Consumer (DTC) market where merchants that sell directly to their customers instead of going through wholesalers or retailers. These promise larger profit margins and greater control over brand image and payment solutions tailored to the local markets.
This has driven the rise of social commerce as well, where social platforms create opportunities for brands to build unique social commerce experiences customized for their target market. “We see a trend of merchants that are venturing into social media as a new channel for commerce turning to technology providers to meet the demands of a larger consumer landscape,” says Devata.
“Above all, consumer behaviour is changing, along with their expectations of how they want to interact with businesses. For example, mobile payments and buy-now-pay-later (BNPL) are becoming more popular with Gen Z and Millennials.
“On the other hand, the silver generation is also warming up to contactless and digital payments as a result of the pandemic.”
The rewards are out there for companies that can keep abreast of the changes. Poh shares that J316 had seen a recent uptick in business due to supply shortages resulting from the pandemic. “The surge in sales was met with an equal need to ensure high value transactions continue to flow through smoothly,” he continues. Working with their payments partner was needed to ensure that their operations could meet the sudden demand.
Partnering for future growth
As opportunities continue to open up in the e-commerce space, SMEs are angling for a piece of the pie. Achieving success, according to Devata, requires a clear understanding of who will be supporting you with payment-related issues. “Being able to access that support whenever it’s required should be one of the top considerations.
“These support managers should also have in-depth knowledge of the local market where the SMB is operating in. Understanding the partner’s track record of experience is also a good way to assess their reliability.
“SMBs should also clarify the relevant fee structures applicable to the services they are looking for, for example when using multi-currency accounts.”
Poh echoes these sentiments on a broader front, emphasising a robust plan to systemise the business for scaling quickly. “As a business scales up, a data-driven approach is the best way to support the growth and identify areas for demand – J316 leveraged sales data to identify and better serve our customer needs, while ensuring a fair value transacted for the used semiconductor equipment or part.
Having robust partnerships has allowed J316 to focus on their core business. ”Partner with an industry expert that can support your daily operations and empower you to plan for scaling,” advises Poh.
“Keep iterating and honing your product or service until you find product-market-fit. You know you have it when customers come automatically.”
