AORA

Cross-Platform E-commerce Buying Service Powered by Blockchain and Backed by a Listed Company

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We worked closely with AORA to refine the utilities and ecosystem behind the AORA coin. For an in-depth report on AORA and the AORA coin, click here.

First ICO by an SGX-Listed Company in Singapore

Background on Y Ventures: Existing Market Player; Strengths in Data-Analytics Driven E-Commerce

Y Ventures is a data analytics driven e-commerce retailer and distributor headquartered in Singapore. It drives sales for third party brands on online marketplaces including Amazon, eBay, Qoo10, Lazada and Tokopedia using its data analytics capabilities, such as the use of demand trends, pricing intelligence, consumer sentiment and market competition analyses to enhance sales. The Company is listed on the SGX Catalist Board (YVEN:SP) following an IPO in July 2017 (“Company”). At present its retail portfolio comprises of around 12,000 active merchandise listings over 5,000 SKUs across 20 online marketplaces.

Y Venture’s subsidiary, Luminore 8 Pte Ltd (“Luminore”), plans to launch AORA in 1H2019, a blockchain-enabled global buying platform that facilitates cross-border purchases on behalf of consumers. AORA will allow users to purchase consumer products from any online marketplace with the option to use cryptocurrencies for payment. At launch, the platform will accept the most popular utility tokens including Bitcoin and Ethereum, with the AORA coin acting as the primary token for access. Y Ventures is the first among listed companies in Singapore to tap on the ICO market as an innovative funding source for the development of AORA.

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Whilst the concept of e-commerce buying platforms which provide buying services on behalf of customers is not new — for example, Ezbuy has been in the market since 2010 and gained considerable popularity in Singapore and in the region, AORA will be the first to be powered by blockchain with support for payments with cryptocurrency.

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In addition, AORA will be differentiated from other existing platforms by its emphasis on data-analytics, such as the use of demand trends, pricing intelligence, consumer sentiment and market competition analyses to enhance sales. AORA is also being geared to address the widespread issues faced by cross-border e-commerce consumers on incumbent platforms, particularly those that do not ship directly to countries where consumers are located. These include providing a more seamless and cost-effective buying experience (with lower transaction fees and more favorable FX rates) and end-to-end worldwide delivery of goods.

For merchants, AORA will offer an integrated suite of blockchain merchant tools that includes payments, rewards, product reviews system and end-to-end logistics fulfilment.

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Luminore has recently entered a partnership with Singapore Post (“SingPost”) to cooperate in developing AORA, as well as to explore possible enhancements to the e-commerce parcel logistics chain utilizing new technological processes for warehousing and last mile delivery. We view this as a significant development which could open the door for tremendous synergies to be gained by both parties. SingPost’s logistics capabilities and operations in 19 markets could contribute tremendous operational efficiencies and facilitate the provision of timely delivery at competitive pricing, which could prove key to AORA’s success over other e-commerce buying platform competitors. At the same time, AORA’s data analytic and e-commerce capabilities offer SingPost access to a new part of the vertical logistics chain. Additionally, we believe that SingPost’s relationship with Alibaba through its 14% stake in SingPost could prove advantageous for AORA, given Alibaba’s ambitions in expanding SingPost’s E-commerce logistic solutions across the Asia Pacific.

Roadmap

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Future Plans & Market Potential

Asia is the Largest and Fastest Growing E-commerce Market in the World

At present, 1 out of every 2 e-shoppers globally are from the Asia-Pacific, and $0.50 out of every $1.00 of B2C e-commerce sales made globally are from the Asia-Pacific.

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E-commerce has gone global and beyond a consumer’s borders, with the global cross-border market valued at US$468 billion GMV in 2017 with a 25% growth per annum rate. The cross-border industry is expected to hit US$900 billion GMV in 2020, accounting for 22% of all e-commerce transactions. Asia in particular is a region to watch, with cross-border purchases from China alone raking US$160 billion, and Singapore, Malaysia and Thailand estimated to rake in US$34.5 billion in 2020.

AORA Aims to Remove the Inefficiencies of the Rapidly Growing Cross-Border E-Commerce Market

Online payment processes typically involve multiple parties and can take an average of 2–4 working days to settle. During this settlement period, merchants are unable to withdraw their funds real time unless an extra charge is incurred. Merchants also incur other costs such as chargeback fees and monthly usage fees for payment gateways. Consumers also typically incur a transaction cost of 2.5%-3% and a flat fee depending on merchants.

There is limited usage of cryptocurrency in e-commerce today. At present, bitcoin is the only cryptocurrency accepted by three of the top 500 global merchants. This undermines the adoption and value of cryptocurrencies.

Even as the number of e-commerce platforms and consumers grow, the process of reviewing and verifying reliable platforms or sellers has not advanced sufficiently. A growing number of teams specialized in helping merchants ramp up sales ranks with fraudulent reviews in conjunction with social media ads and postings. A study done by ReviewMeta showed that in 2017, 50.7% of reviews under the Bluetooth Headphones category and 67% of reviews under the Testosterone Booster category were questionable, with a flood of reviews in a single day or reviews consisting of repeated phrases. This is compounded by the difficulties of validating and scrubbing counterfeit reviews on e-commerce retail platforms. Creating an environment of consumer dissatisfaction, with merchants unable to meet unrealistic expectations and consumers receiving sub-par goods.

The current processes for merchants with regards to cross-border fulfillment are cumbersome. Customs forms and import taxes differ for each country, and select countries require minute details such as product category, origin and value to be declared. The tracing and tracking of authenticity of one product alone can result in hundreds of digital forms being filled in and this creates a nightmare for small and mid-sized merchants. Consumers using freight forwarding services to bypass brand sale restrictions in certain countries and product price disparity also go through a long tedious process to get orders safely shipped to them.

Through the AORA Merchant Suite (AMS) and its suite of blockchain solutions, users can expect faster payment settlement times and reduced transaction costs charged to consumers, through AORA Pay. It is estimated that merchants on AORA can enjoy savings of up to 8% compared to traditional online payment solutions[1]. The AORA Currency Looping Protocol (CLP) feature will allow merchants the option to receive either cryptocurrency or fiat payments at the best FX rates possible.

The AMS also features integrated functions such as the AORA Trust Circle which encompasses a comprehensive and verifiable scoring system, allowing consumers to make more informed decisions before committing to a purchase.

Another feature on the AMS is AORA Borderless, which will be delivered in conjunction with SingPost, and will provide end-to-end logistics management that helps well-regarded merchants achieve international scalability. Both merchants and AORA will share a unified platform which will enjoy cost savings due to enhanced data integration and automation.

[1] AORA Whitepaper, page 36

AORA Platform Model Inspired by Successful Chinese Cross-Border E-commerce Platform

Launched in 2013, Xiaohongshu (Chinese: 小红书; literally: “Little Red Book”) is a cross-border e-commerce platform that retails luxury, beauty and fashion products by encouraging shoppers to share content, ideas, bargains and shopping tips in the social community. Through analyzing these data from users, the company can determine the needs of their users.

The original intent behind the establishment of Xiaohongshu was to provide a platform for people traveling abroad to share shopping experiences and recommend fashion products. However, the business was refocused to providing Chinese consumers with a platform to transact and contract global retailers directly.

By May 2017, Xiaohongshu users exceeded 50 million, with sales of nearly ten billion RMB, making it the world’s largest community e-commerce platform.[1]

On 6 June 2017, Xiaohongshu sales reached 100 million RMB in the first two hours, which make it rank first in the shopping category of Apple App Store. [2]

In June 2018 the company completed a $300 million Series D funding round led by Alibaba, with a valuation of $3 billion.

Xiaohongshu’s cross-border e-commerce platform model has yet to be replicated in South East Asia. AORA aims to plug this gap through their platform, thus addressing the large market potential of the South East Asia cross-border e-commerce market. With the advantage of being the first-mover, AORA is looking to be a major player in this unsaturated market.

[1] Xiaohongshu Leverages Social Commerce to Join the Club — Sramana Mitra

[2] 小红书,与世界分享好生活(一带一路·合作共赢)- paper.people.com.cn

Token Economics

The AORA coin will be an integral component and success factor for AORA’s platform operations, with the following major use cases and benefits:

Key Use Case #1

AORA will be used as a payment medium on the platform and will be necessary to access the marketplace and suite of merchant tools.

Tokenization of payments with AORA will allow for efficient tracking of user activity, payments, customer identification, and awarding of benefits to users associated with accrued total spending across the platform. The use of AORA as payment will also enable customers to benefit from more favorable FX rates and lower fees compared to other platforms.

Key Use Case #2

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Consumers can use their AORA coins to directly purchase real-world products listed on the AORA system.

Token holders do not incur conversion costs for converting their tokens to fiat currencies or face token withdrawal limits imposed by cryptocurrency exchanges when seeking to use their tokens to purchase real world products.

Key Token Drivers

Token Driver #1: Incentivization of Decentralized Community Efforts to Add Value to the AORA Ecosystem

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AORA has set up an incentive system where the 3% service fee of the platform will be channeled toward incentivizing consumers and rewarding token holders who add value to the AORA ecosystem. Consumers will only be able to purchase listed products with AORA coins; upon purchase, a 3% platform service fee will be incurred and used in the following manner:

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1% of the 3% service fee will be used to award token incentive to third parties who add value to the Ecosystem. Examples include:

a. AORA users who contribute product or merchant reviews will be rewarded based on staking.

b. Users who promote the platform or products on social media.

c. Merchants that attain good credibility and customer feedback scores.

AORA users are rewarded for voting on reviews through a staking mechanism where users who hold on to more tokens will receive greater rewards. This lowers token velocity, supply, and ensures token price stability. This system creates a cycle whereby tokens earned by the platform is used to grow the platform and ensure merchant reliability; a larger, more active and reliable platform will in turn grow the incentive pool which will in turn be used to further fuel the growth of the platform.

Another 1% out of the 3% fee will be used to reward everyone who hold AORA coins. To ensure AORA coin market price stability in the early stages of the platform, token holders will be incentivized to hold onto their AORA coins.

The remaining 1% of the service fee will be used for platform operation and maintenance.

Token Driver #2: Access to AORA Platform Exclusive to Token Holders

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A key token value driver for the native currency AORA coin in its initial stages will be the requirement that AORA be used to access the platform. Uptake of the platform on the hand will be significantly driven by the AORA Merchant Suite (AMS) which we believe is well designed to draw in users due to the significant benefits and enhanced experience it offers to both merchants and consumers. In particular, by using the AORA platform, merchants and consumers should benefit from significantly enhanced speed of payment settlements and lowered transaction costs.

These benefits are achieved primarily via the 3 core features of the AORA Merchant Suite:

1. AORA Pay is a payment network that uses the AORA Coin for transactions between two parties and can be used for both retail and online payments. Any transaction that happens on the network will be charged at cost without any mark-up to ensure cost competitiveness for the consumer, and sustainability to upkeep the AORA system.

2. Rebate System will allow merchants to make use of a customer’s public key information from AORA Pay to distribute rewards to customers. The rebates will be issued out on a tiered basis. Merchants will be allowed to customize their rebate amounts depending on their needs. By using AORA’s rebate system, merchants will not need to spend any additional costs and time implementing and maintaining their own rebates systems.

3. Currency Looping Protocol (CLP), is AORA’s solution to liquidity problems. CLP helps with the settlement process by allowing merchants to price their goods in AORA Coins, whilst receiving their preferred fiat or cryptocurrency. CLP finds the best rates for consumers and merchants by looping through cryptocurrency exchanges and finding the optimal conversion rate for the merchants’ preferred settlement currency at a maximum of 9 loops. In doing so, merchants stand to benefit from significant FX savings derived received through the CLP.

The platform benefits discussed above account for only 3 main features of the AMS. However, other features of the AMS, such as AORA Borderless for merchants to scale their businesses globally and AORA Trust Circle which provides users with a comprehensive review system, should play equally integral roles in promoting the adoption of the platform.

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