Southeast Asian Beauty Site Draws $2M From Gobi To Mimic China Model
Shanghai-based VC firm Gobi Partners has led a $2 million Series A round of funding for Hermo, one of Southeast Asia’s leading beauty sites.
Hermo’s cofounders Ian Chua, Ian Mok and PS Chong are seeking to capitalize on an opportunity in Southeast Asia to create a homegrown cross-border cosmetics e-commerce site, similar to models such as VIPShop and Jumei that have been succeeding in China. The startup, founded in February 2012 in Malaysia and also operating in Singapore, has been profitable for one year. Its prior funding was roughly $100,000 from Singapore-based Crystal Horse Investments and Malaysian angel investor Tan Swee Yeong.
The fresh capital will be used for product development, hiring, marketing and expansion into Indonesia. Hermo’s mission is to make cosmetics shopping fun for its customers. Its business model is centered on flash sales of premium cosmetics at competitive prices, alongside a regular inventory of largely premium, Asian beauty products. The site’s most popular brands come from Korea, and the company has also built direct relationships with major international brands, including a partnership with L’Oréal.
Currently ranked as Malaysia’s top e-commerce site, Hermo claims 150,000 monthly active users and 3000 product listings. Orders are shipped directly out of Hermo’s own fulfillment centers, and direct relationships with suppliers allow for lower prices and more products. The startup has been growing fast, bringing in $2.8 million in revenues in September 2015, a three-fold year-on-year increase.
Hermo reports that half of its orders come from mobile, which reflects the mobile-first market in Southeast Asia. While Indonesia currently has a relatively low e-commerce penetration rate, the future of retail in the region may be driven by e-commerce.
Gobi has invested in more than 100 companies in China and the ASEAN region over the past decade. As spotlighted by Silicon Dragon, Gobi recently formed a $94 million fund that focuses on investments in young Chinese companies.
