NEWS: Dotcom’s secret to success

ALMOST 10 years down the road Lelong.com.my — one of Malaysia’s earliest dotcom companies — is chugging along nicely and will be picking up speed to chalk up more milestones in the next decade.

Modelled after the famous online auctioneer eBay.com, Lelong.com has carved its own niche in the market and even the entry of eBay Malaysia into its playground doesn’t faze its owners.

Richard Tan, managing director of Interbase Resources Sdn Bhd which runs the site, believes its success comes from ensuring that Lelong.com’s business is built firmly on trust. “That’s the main reason why many people keep coming to our website to trade,” he says.

TAN: Expects Lelong.com to be around for a very long time.

He says the company spends very little on marketing, preferring word-of-mouth testimonials to print ads or other traditional media. “Instead, we concentrate on ­building up our credibility,” he adds.

“That means, we never let up on our stringent security measures. It’s also time consuming and tedious having to verify memberships and monitor all the sales that go on at the site, but these tasks are ­important because we want our users to have confidence in us,” says Tan.

A dead giveaway as to how ­serious Lelong.com is on the issue is the security tagline on its website — “Guilty as Fraudster — Until Proven Not.” And it’s no laughing matter.

LIVELY: An overview of the many items available on Lelong.com.my.

Proper verification is a must, according to Tan, to build trust between sellers and buyers who use the site. “We make sure all sellers go through a stringent verification process, in order to guarantee a safe shopping environment for buyers,” he says.

Of course, there’s no such thing as complete security, “but at least, we can reduce the risks ­substantially,” he adds.

Thanks to such measures, there are hardly any fraud-related complaints from users of the auction website, Tan claims. The handful of complaints that it receives are ­mostly to do with ­shipping delays.

Lelong.com also does not allow its sellers to be anonymous. “There are plenty of other sites and forums that they can sell at if they insist on anonymity. Here, we prefer to be a community, with our members known to each other, and this helps promote trust,” says Tan.

Thriving marketplace

Set up in 1999, the auction site was mostly filled with gadgets ranging from personal computers to mobile phones, and included used and new products.

Today, anything from household appliances to electronics goods to toys to knick knacks are on auction at the site.

And, with more than 31 million pageviews and a million unique visitors a month, Lelong.com is undoubtedly Malaysia’s biggest and most active Internet auction site in anyone’s book, Tan says, beaming.

“The number of people trading online is also growing and this type of business is more popular among the younger generation,” he says. “About 80% of our members are below 35-years-old.”

He thinks the older generation is probably overly cautious when it comes to buying and selling items online at this time, but this may change as time goes on.

Also, he attributes the growing interest in the site to the advent of broadband Internet services in the country. With access speeds of 1Mbps (megabits per second) to 4Mbps, “our pages load very fast,” he says, compared to early days when connections were dial-up.

“More traffic is coming to Lelong.com also because similar online services — such as LowYat.net and eBay Malaysia — are helping to spread the word on online ­transactions,” he says.

“More Malaysians are ­experiencing such transactions and realising that it’s a worthwhile pursuit,” especially if they’re ­hunting for collectibles, a really good bargain, or a product that hasn’t been made in years.

Yes, everyone loves a good ­treasure hunt, especially if there’s some “treasure” to be had at the end for next to nothing. It’s the thrill of the chase.

Expansion plans

Tan reveals that Lelong.com is exploring various opportunities to expand its business into two ­neighbouring countries, Indonesia and Vietnam.

“Both have substantial markets that are worth looking into,” he says. And if it is successful in its attempts, will mean more choices and a huge opportunity for sellers in all three countries.

Indonesia, he adds, has several other advantages, including a ­similar language and its proximity to Malaysia.

But, Tan says, it is really too soon to start counting his chickens. “It’s still early days yet and we want to be fully prepared when we expand,” he says, adding that Lelong.com would likely need suitable partners in the two countries.

In the meantime, the auction site is adding a pay-by-credit-card ­facility to its existing SafeTrade escrow service. For the uninitiated, escrow service providers are usually third-party transaction facilitators who guarantee delivery of goods upon payment.

Tan foresees that SafeTrade will be a hit among its members because it is convenient to use, offers even better security, and enables the sale and purchase of pricier or larger items, such as ­vehicles.

Still free

It may surprise people to learn that after being in the industry for this long, Lelong.com still does not charge a listing fee or earn sales commissions for its services.

“This is another selling point of our company,” Tan says.

To stay afloat, it sells advertising space and charges customers who want their products to be ­prominently featured on the site, a small fee.

These users can list items for free on the site, with only premium features such as listing items in the Featured section, having a reserve price, and offering Dutch auctions incurring charges.

For about RM168 a year, users can also set up an online store at Lelong.com. The site currently has more than 800 stores listed.

According to Tan, the store owners have their own mini website on Lelong.com, which they can customise. This enables them to provide better services to the community at very low startup costs, he says.

But, he adds, the hardest part in an e-commerce business is not building a website but attracting traffic to the site.

“At any one time, there are close to 100,000 items on auction, so how do you make your items stand out from the crowd,” he says.

Being in the Featured section could make a difference, he adds, “which is why we charge for this service.”

Also, Lelong.com still retains its “For Malaysians only” clause — its memberships are only open to Malaysians or foreigners who reside in country. This is to enable it to have better control should there be incidents of fraud.

Bright future

Tan believes that Lelong.com will be around for a very long time. According to a Malaysian census, there are about 4.8 million ­households in the country.

Now, if these households decide to sell their a few unused or unwanted items each — such as forgotten wedding presents, old cameras and typewriters, or ­outdated cupboards and racks, “we would be in business for a long time,” says Tan.

“Interesting thought, isn’t it?”