E-commerce has exploded in recent
years in Latin American and Caribbean countries. According to a study performed
by Tecnocom, sales have quadrupled in the region in just five years, generating
approximately 66.7 billion dollars (or 56.2 billion euros) last year. However,
high import tariffs, excessive bureaucracy and the lack of electronic payment
methods adapted to clients´ needs represent barriers for cross border commerce.
Companies like Amazon and eBay find themselves obligated to implement very
rigid international shipping policies which sometimes translate into a limited
offer of products, high shipping costs and long delivery times.
To improve this situation, the entrepreneur and business owner Anson Tou has created Qempo, a web platform that connects Peruvian on-line buyers with travelers who visit the country to facilitate international purchases and has led to Tou´s recognition as one of MIT Technology Review, Spanish edition´s Innovators Under 35 Latin America 2017. The way it works is simple: through the platform, a client interested in making an international purchase can contact a traveler with plans to visit Peru with extra space available in their luggage. The traveler buys and brings the package to the client, and earns a commission.
In just a few years, Qempo has managed to reduce standard shipping costs by 50% and delivery times by 80%. According to this young entrepreneur, "companies like Fedex and DHL normally charge around 50 dollars [approximately 40 euros] for a package weighing one kilogram [just over one pound], which often doubles the price of the product." Given the high costs associated with traditional shipping companies, the young Peruvian started to look for alternative methods. Without an initial investment and based solely on a technological forum and a simple, informative webpage, he began to contact several clients casually. In just a few years, he had billed over half a million dollars [or 424,000 euros].
Born into a family which immigrated to Peru from China during the 1980s, Tou started helping out at the family restaurant at a very young age. The young entrepreneur recalls: "My parents were great entrepreneurs. They taught me the value of hard work." Helping during the restaurant services, he honed his social skills and developed a strong desire to connect with other people. These values are reflected in his business model. "Providing customers with excellent service is our most important policy," he points out, and it is one which helps him to differentiate his solution from other market rivals.
At age 17, Tou moved to the United States to study International Business Administration. From there, he launched an import service to send products to Peru. Tou recalls: "Qempo started as a hobby — a favor to help my friends and family who lacked access to many products from the United States." With some prior experience in the world of customer relationships and business management, Tou applied the knowledge acquired during his studies to his company and, "almost without meaning to, Qempo became a business."
Peru is the fourth economy in Latin America with the highest sales tax in the region, at 18%. This percentage, coupled with an ad-valorem tax, leads Peruvian clients to pay almost double due to the customs costs paid by conventional logistics firms. Tou and his team analyzed the complete import policy of the Peruvian government as well as several other countries and found that there was a huge difference in prices between passenger luggage and cargo shipments. The entrepreneur explains: "We saw an opportunity to reduce costs and shipping times. Our shipments take a week maximum and our travelers earn an average of 300 dollars [approximately 250 euros] per trip."
It hasn´t been easy going, though. "There have been several challenges. One of the biggest was adjusting to the cultural differences between the United States and Peru. These cultures are very different, and we need to adapt to both to establish trust between clients," says Tou. And he adds: "We have adapted our payment methods to offer the possibility to pay via bank deposit and in cash. Not all clients are willing to buy online." At present, Tou´s team is working with the Peruvian government to pay border taxes before the trip begins in order to facilitate the bureaucratic process and further reduce customs waiting times.
During the next few months, the team plans on launching Qempo in China, something which the young Peruvian is extremely enthusiastic about given his roots. In the future, Tou´s objective is to connect all of Latin America before then expanding further globally.
"The concept of capitalizing on this available capacity in travelers´ luggage to transport merchandise offers a successful business model with great potential to be applied to other countries," according to the business development director at Corporación GPF (Ecuador) and jury member for the Innovators Under 35 Latin America competition, Jeffry Illingworth.