All about Convenience
Payments and Shipping in Taiwan, Singapore and beyond
I joined Carousell in summer 2017 to help starting and leading the Development Center in Taiwan (TWDC). Along with being the Site Manager, I set up both the Convenience Team and Buyer Experience Team, and they form the anchor engineering teams in our center.
Carousell is a classifieds C2C marketplace from Singapore. At Carousell, our mission is to inspire every person in the world to start selling. In this article I’ll present how my team introduced Payments and Shipping to the existing product, as well as what will be our focus in the future. To learn more about our engineering team culture you can read here.
Starting from Taiwan
I still remember my first day very well. It was in Singapore, happening at the same time with One Carousell, an annual event that gathers all employees from every office to stay together for a whole week. It’s a week of workshops, sharing, activities, treasure hunts; a week for everyone to stop and recharge their energy. Four engineers and I joined at this time, and everyone was curious about us and what we did in the Convenience Team.
Why is it called Convenience? In Carousell, we give the name Convenience to the combination of Payment and Shipping, we see these two problems being tightly coupled. My favourite answer, though, is that it is called Convenience as a reference to Taiwan. Only in Taiwan is true convenience around every corner, in the form of convenience stores.
They are so ubiquitous that you could draw a map of Taiwan just by connecting dots with the locations of all the convenience stores there. You can ship, pay, print, pick-up and do almost everything in a convenience store in Taiwan, so what better place to start experimenting with payment and shipping than here?
My second week went by working day by day with Andrius, our VP of Product, sketching on whiteboard, writing user stories, eating dumplings at every meal and defining high level requirements for what would later be our first iteration of the project. It was immediately clear that we want it to be simple and we want it to be indeed convenient; so we tried to minimise the scope to the bare minimum.
We wanted buyers to feel safe purchasing their items from any part of the country because Carousell would manage the payment process for them. We wanted sellers to reach a broader audience. Lastly, we wanted both parties to enjoy a seamless experience within the platform.
If we look at the overall Carousell inventory variety, there’s a sweet spot where uniqueness meets shippability, and that’s our target. What this means is that items that are not so unique are generally very easy to find in high density area. On the other hand, not all items can be shipped easily. Uniqueness and shippability can be found in our popular categories such as: clothing, textbooks, handbags, shoes, accessories, and many more.
Payments & Shipping preference
Another aspect to consider were the different options already available in the market in terms of both payments and shipping. Looking at the high level of convenience store penetration, ease of collection and low pricing structure, the preferred method of shipping would be convenience store as compared to other like post office. The ratio of delivery points is more than 10:1 in favour of the convenience store when compared with post office.
Looking at the pricing side: — even though the basic price for post shipping is slightly lower (from 40 NTD, ~1.30USD), the range is quite big and the delivery time is usually higher. Convenience stores use a flat rate (60 NTD, ~1.90USD), deliver on average 1 day earlier and more over, they are mostly opened 24/7, which means that the receiver can go picking up his parcel any time and at locations which are mostly closer to him.
It’s interesting to know from data that online buyers still prefer to pay in cash on delivery, followed by credit cards by some distance. Among all Carousell transactions, the most common payment method was bank transfers. This is because convenience store don’t allow for a cash on delivery model between individuals, unless it happens through other platforms.
With these data, the landscape was quite clear, we would have handled logistics through convenience stores and accept cash on delivery, right at the store. This is what the online buyers and sellers in Taiwan were telling us.
While the team of engineers was slowly building up and with some of the main user journeys getting better defined, it was soon time to decide how we wanted to build our services.
In Carousell there has always been the concept of an Offer, tied to an actual offer of monetary value. Offers have different states and buyers can make, edit or cancel offers while sellers can decide whether to accept an offer or not.
We decided immediately not to expand the concept of offer to fulfil our needs for few reasons and it was obviously easier starting with a new concept called Order. We also didn’t want to add complexity to the existing monolithic app as more and more teams were moving away from it and creating their own micro-services, and so we did as well.
We realised we needed an Order System, to handle the whole life-cycle of a real Order as it happens in common e-commerce websites. This service would have had its own state machine as well as a series of more nested ones to better capture the complexity of other services and external partners.
As we imagined we would have several integrations in the future, we needed a Logistics System to abstract the complexity of those integrations to the upper layers. We finally added a dedicated Gateway to collect and redirect all incoming requests, including callbacks from external partners.
The final result can be summarised in the picture above, where the main micro-services are shown in red and other minor ones, below, are indicated in white. One thing that stands clearly from this architecture is that there’s no need for us to define a Payment System. In this model (cash on delivery), in fact, the payment is captured entirely when the logistic is completed and only in that case, therefore there’s no need to complicate the architecture.
Taiwan Market: launch and results
In November of 2017, with only four months of development, the team finally launched the very first version of Carousell Convenience, an integrated payment and shipping solution for Taiwan.
I personally followed the first transaction that was made. It was a buyer from the south of the island, near Tainan, buying a pair of jeans from a seller in Taipei, in the north of the island.
The buyer received her new purchase in 2 days and we realised how we suddenly opened up new shopping opportunities, reducing distances.
It’s been a year since the release to Taiwan market. We are proud to share that results have been really promising:
- 66% of new listings are payment & shipping enabled
- # of orders have doubled (2x) in the last 5 months
Solving a different problem in Singapore
Singapore is a very different market. First of all, it’s a city-state, people can easily move from one part of the country to the other in a short time, mailing or delivery is not really a strong need and the network of point to point shipping is not mature and far from being as large as in Taiwan.
Moreover, it is Carousell’s home market, which means there are users that have been trained for 6 years to arrange meet-ups on their own. On the other hand is a country with higher virtual payment penetration, and a solid protocol for instant bank transfer within mobile apps.
With all this in mind it was very clear that launching in Singapore would have had a completely different impact and would have brought another value. The problem we wanted to solve here was to reduce the hassle of dealing with cash, increasing the trust level in our platform, decreasing the number of low ballers and experimenting with monetisation.
How the architecture changed
To achieve these goals we revamped the product and the experience significantly. We tweaked our Order flow to give more flexibility to Sellers allowing them to accept or reject Order Requests. We introduced several types of payments, such as Credit & Debit Cards or bank transfers through DBS Paylah!, and all payments are now made upfront.
We launched a promo code mechanism that our Marketing team have been using regularly to drive also new partnerships and encourage adoption. We’ve developed a new micro-service, called Payment System, following the idea of the Logistics System to abstract the complexity of external integrations. Together with it, we built a full ledger to allow our Finance team to reconcile all transactions with partner and payment providers.
Launch of CarouPay in Singapore
In May of 2018, during the Tech In Asia conference, our CEO announced the launch of CarouPay. The launch was followed closely by the media, as it marked one milestone for Carousell.
After 6 years, Carousell was finally including payment amongst all its other services provided to our users. The newly integrated options included a wallet system and identity verification. Logistics, on the other hand, was only partially integrated, relying on sellers to arrange shipping, although we facilitate some of the most common choices.
Ready for future challenges
While we work relentlessly to improve our existing markets, we are working on redefining how teams should be structured to tackle tomorrow’s challenges.
The original Convenience Team has since evolved into a Squad, an internal grouping term for teams that share similar goals. As part of this process and a reflection of Conway’s Law, the original team also went through some restructuring to ensure that the group reflected the ambitions for our product.
We’re still hiring and preparing for what the Convenience Squad should be but it’s already very clear to us how it should look like. It will consist of 3 main teams guided and coordinated by representative of Product, Engineering and Business:
- Core: a platform team, that works to prepare what the Squad will need six months later. A team that takes quality and scalability extremely seriously and doesn’t accept any compromise on these two. The team also supports the specific needs of other functions such as Finance and Customer Service.
- City-State: the original team that launched CarouPay in Singapore, will focus on launching Hong Kong as next market and improve the product in Singapore. This delivery team will also focus on the unique use cases of these markets, and continuously improves and strengthens the experience for users.
- Multi-City: a brand new team, with an ambitious goal: to bring convenience to all other markets (Philippines, Malaysia, Indonesia, Australia), solve their trust and logistics issues and bring more values to the growing payment landscape while improving what have been done for Taiwan. Another delivery team which ships fast.
As we like to say in Carousell, we’re still less than 1% done. If the nearest goal is to launch in all the countries where Carousell has a presence, the longer term vision is that every transaction in Carousell should be a “convenient” one.
We want to be able to provide Payments & Shipping for any type of product, any partnership and any user journey. If you’re interested in being part of this, we’re currently hiring, you can see all our openings here.