In a move that underscores the burgeoning potential of the Asian luxury market, Taiwan-based second-hand luxury site PopChill has secured US$1.9 million in its latest investment round as it looks to expand in the region. Already a disruptive force in Taiwan’s e-commerce landscape, PopChill is setting its sights on Hong Kong, armed with a unique business model that promises to redefine how second-hand luxury items are bought and sold online. With monthly gross merchandise volume (GMV) e
GMV) exceeding US$1 million in Taiwan alone, the platform plans to export its success by addressing specific pain points in online luxury transactions. We sat down with co-founder Andy Kuo to delve into PopChill’s groundbreaking authentication model, its strategy for overseas expansion, and what the new influx of capital means for the future of luxury retail in Asia. The story so far According to Technode Global, Kuo and fellow PopChill co-founder Kelly Liao are veterans in this space, with multiple achievements, including KuoBrothers, one of the fastest e-commerce companies to reach an initial public offering (IPO). So, when they noticed the price of luxury fashion getting higher and higher in recent years, they spotted an opportunity: “We believe more people would choose to buy second-hand fashion luxury online,” Kuo told Inside Retail. After talking to many customers, Kuo found the main pain point for online transactions to be the risk of buying fake items. The obvious solution was to have someone in the middle of the transaction be responsible for authentication. “When an item is sold, the product is first shipped to us to do authentication and quality control, then shipped to the buyer. We think this is a very effective way to protect both the buyers and the sellers,” he added. AI and authentication PopChill claims that it has a 99.1 per cent accuracy rate for product authentication through its partnership with Entrupy, which Kuo said is the most reliable solution in the marketplace. “We use devices provided by Entrupy to do authentication. It basically enlarges the photos of the materials and sends the photos to its database, then uses machine learning technology to see if the product is real. While most fake items look similar to real ones, when the details are enlarged, the real ones are very different from the fake ones” he said. Currently, PopChill’s average order value in Taiwan hovers around the US$800 mark, which bodes well for the platform. “You need to trust this platform a lot to spend US$800. The highest amount ordered so far is US$28,000. You really need a lot of trust to spend that much. With the order value very high, we don’t need too many orders to make this business model work,” he stressed. The Hong Kong marketplace PopChill selected Hong Kong as its first international venture due to its culture and language, which Kuo described as being very close to Taiwan’s, as well as the local population’s strong affinity for luxury goods. “Hong Kong also has a tariff advantage. There is no customs duty and no VAT in Hong Kong. So we can have more Taiwan sellers to sell items to Hong Kong and remain very competitive in terms of price,” he elaborated. Kuo has stated that the funds raised in the recent funding round will be used primarily for expansion into Hong Kong. “Half of it will be spent on salaries, and the other half on marketing expenses. We need to have a local authentication centre to authenticate items sold by Hong Kong sellers. We also need people to get buyers and sellers in the Hong Kong market,” he said. Kuo acknowledged that the brand will need to invest significantly in digital marketing and content marketing to drive awareness. In the beginning, very few people in Taiwan knew of PopChill and its business model. “The idea is we need to have more people know us in a very short time,” he pointed out. The future PopChill plans to enter the Singaporean and Malaysian marketplace by 2024. “When we enter the Singapore market in 2024, we can use Hong Kong and Taiwan products as supply. But because our price is very high, it makes sense even considering the shipping fee and customs duty,” he opined. In terms of the next round of financing for the company, Kuo said that the brand will have to prove to investors that the business model can be replicated in other countries, and also prove that it can manage teams across marketplaces. “We plan to raise the next round after we see traction in the Hong Kong market. We also would like to go to Japan, as we know there is a huge supply for luxury products there. In the case of Singapore, its culture is also very similar to Taiwan,” he added. Ultimately, Kuo believes that Japan and Singapore are the two most exciting markets for the brand. But he is clear-eyed about the future, and is focused on making sure PopChill can succeed in Hong Kong before venturing to new markets.