Entrepreneur Insights is a Campfire series where we interview entrepreneurs in the South East Asian region to give you insights that you can integrate into your own business and make it more successful.
Today Campfire interviews Frank Kang, CEO of Althea Korea. Althea Korea is a new online e-commerce platform aimed at bringing the latest Korean beauty products and trends to South East Asian beauty fanatics.
Founded by Frank Kang, who was previously the COO of Living Social Malaysia, Christopher Cynn, co-founder of South Korea’s TicketMonster and Jae Kim, an investment specialist, Althea’s goal is to emulate Zappos in providing great customer service.
Althea is different from marketplace sites in that it is not only about buying and selling, but also about providing the best and latest products to its customers through a world-class experience online.
Frank’s vision is to set Althea as the trendsetter for K-Beauty throughout the world. At only four months, Althea Korea is already the winner of the Malaysian Multimedia Development Corporation (MDeC)’s Top Rookie Award.
About Frank Kang
There are many ingredients for success, but I would like to particularly highlight a hungry spirit. Through out a startup journey, you would encounter thousands of challenges everyday. I would call it as everyday is a war. – Frank Kang, CEO of Althea Korea
Frank is a Korean who spent his last couple of years before starting Althea serving as the COO at TicketMonster, a daily deals site which was eventually acquired by LivingSocial Malaysia. But for this engineering degree holder with an MBA, his entrepreneurship journey started early.
Together with his friends, Frank started an online value exchange network called People2 where he managed to raise investment from Softbank eventhough he did not have a track record. People2 collapsed when Frank was called to serve in the miliatary for two years.
Undeterred, Frank went on to start KoreanTweeters.com, the biggest Twitter directory in Korea. KoreanTweeters.com eventually collaborated with TicketMonster in their daily deals and the rest is history.
In this interview, find out:
– How Frank is planning to build Althea into the one stop online beauty destination for South East Asians
– How Frank learns what his customers want through interactions on Facebook and Instagram
– The consumer trend Frank is observing in Malaysia
– How Frank started Althea without feeling fully prepared
– The key mental framework Frank believes differentiates successful entrepreneurs from the rest
– The one mistake that new entrepreneurs make that doom their business
And more. Read it all in this interview.
Business Talk: Althea in Malaysia and Beyond
Lu Wee: How different is Althea from the previous businesses you were involved in (Livingsocial and TicketMonster) in terms of your strategy for expansion and revenue growth?
Frank: Althea is positioning ourselves as trendsetting k-beauty throughout the world. We want to be a #1 beauty destination for customers to find the latest products, trends and lifestyle. So our approach is different from e-commerce platforms. Instead, we are building ourselves as the authority in the market. We deliver comprehensive value to female customers in SEA which then in turn diversify our portfolio in expansion and revenue.
Lu Wee: According to e27, Althea plans to expand to six major countries in 2016. What challenges do you see in scaling Althea to this level and how do you plan to overcome them?
Frank: Althea is a highly scalable business compared to other local based company. We source/pack/deliver items all in Korea. We can deliver it to any country as soon as we have a website. But there are always base requirements to penetrate a new market to build an awareness and fan base in each market.
In my experience, the first thing we need to do for global expansion is distinguishing 1) what must be localized 2) what is good to be localized 3) what should be centralized. Once you have the solution, the next thing to do is to find the right person and team to do the execution. We have very experienced partners who have done multiple successful international growth. I believe we have clear direction and a strong team to move forward.
Lu Wee: In countries like Thailand, people are still wary about buying online. Even when they do buy online, a lot of Thais will choose Cash On Delivery (COD) rather than an online payment method. Do you see this trend happening in Malaysia? If yes, how has it affected how Althea markets and sells its products online?
Frank: I don’t disagree that many SEA countries have high demand for COD. But as for Althea, we position ourselves as an international/trendy brand, so our main audiences are mostly familiar with online payment.
Lu Wee: When I was talking to another e-tailer, he mentioned the highest cost of ecommerce is customer acquisition. It can be quite costly to acquire customers online as you have to fight for their attention with other online stores. Do you have see a similar thing happen with Althea?
Frank: Althea focuses more on building engagement with customers rather than conventional user acquisition. For example, Althea’s Facebook page gained 36,000 fans organically within a short four-month period and has a weekly post reach of about 1.5m. What makes Althea special is that all these efforts to interact with consumers and fans. As a result, we see higher organic and repeat visit than industry standard. This is very valuable.
Lu Wee: What were some of the assumptions you had about Malaysians’ online buying behaviors that you found were wrong?
Frank: The popularity of new and trendy items are above our expectation. For example, 30% of our top items are trendy items that Althea introduced in Malaysia for the first time. People love the latest beauty items even if they’ve never seen them before. Online is basically the easiest/fastest way to meet new information and now it’s showing that retail also can work in that aspect.
The Entrepreneurship Journey
Lu Wee: In your opinion, what are the characteristics that make a person successful in business?
Frank: There are many ingredients for success, but I would like to particularly highlight a hungry spirit. Through out a startup journey, you would encounter thousands of challenges everyday. I would call it as everyday is a war.
Sometimes, there can be a moment that you feel like to give up or don’t know what you are doing. But one day you will see the trust never betrays you. As Job’s quote: ‘stay hungry, stay foolish’.
Lu Wee: Did you feel fully prepared when you started Althea?
Frank: I usually compare the startup as marriage. There is no right moment that you are fully prepared. Once you have a feeling, then you must start or it will never happen in right timing. So to answer your question, nope I was not fully prepared, but I would say it was the right timing for me to start it.
Lu Wee: You have a degree in engineering and an MBA. What made you switch from the engineering field to study business?
Frank: Actually, I double majored in business (although i couldn’t finish it). From young, my dream was to become a successful businessman. One of the reasons I choose engineering was to follow my senior who started a very successful business when he was young.
There are several seniors in my major (chemical engineering) who have built a great internet businesses. When I started my own business, I feel like to study more about business, so I jump in to the MBA course.
Lu Wee: You had early experience with starting your own business, starting People2 and KoreanTweeters.com. What made you so interested in these projects?
Frank: There was a service called Cyworld in early 2000s, where 80% of Korean population had accounts. It was introduced in many business schools as the most successful Social Networking Sites (SNS) in the world. This was my inspiration as well. I had a chance to meet a founder of Cyworld and made a resolution to venture into the post Cyworld initiatives.
My first trial was People2, a value exchange SNS where people can share what they are good at, and what help they need. This way people can exchange the value they can provide with one other.
My second venture was bringing the global platform to Korea which was KoreanTweeters. I was fascinated by the simplicity of 140 words of magic. It became the biggest twitter platform in Korea serviced in Korean languages.
Lu Wee: What has been the hardest thing to do personally in being the CEO of your own business?
Frank: There is no easy job in the world, but CEO probably one of the hardest job. I would say the responsibility for the team and investors would be the biggest stress and also motivation for being CEO. But it’s super exciting to lead the business and team as what I vision for. The one who can enjoy this pressure and commitment is taking a challenge to be a CEO.
Lu Wee: You are a man who started a business serving customers who are 95% female. What do you do to understand your customers?
Frank: As a man, I could be more open to accept and monitor what customer wants objectively. I always think how to make our customers happy, like how I do to my wife. The first thing to do is understanding them.
Althea interacts with customers in many ways, primarily through our Facebook page which grew to over 35,000 fans in 2 months and reaches 1.5m every month. Instagram is updated average 50~100 pictures and videos UCC by itself. We closely monitor what our customers are saying in SNS.
Also We are generating more and more point of contact with customers like halloween party, launching party inviting celebrities and power users to listen to their voice, and we are making this interaction as a regular event to constantly feed ourselves with customers latest needs and wants.
Lu Wee: In your opinion what is the worst mistake a new entrepreneur can make?
Frank: One of the most common mistake from a new entrepreneur is pushing what they want, not what customer wants. When people start a new business, it’s mostly initiated by founders’ will.
But there is a funny saying in online business world: ‘Whatever you intended, customer will not follow as it is’. There are so many people in the world, and as many customers. Especially as an online startup, we always need to listen to customers to figure out what they want and constantly reflect it.
Lu Wee: In your opinion what are the most critical functions of a CEO that no one else can do?
Frank: CEO is like a conductor of an orchestra. Must see a forest, not a tree. Sometime when you are rushing day to day operation, you might get lost where to head. So CEO always need to take a step back from firefighting to view a bigger picture of a business and set up a direction.
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Althea Korea’s latest promotion (limited time): 1 + 1 Lipstick (RM79 for 2 Lipsticks)