Millennial tech boss marries online, physical retail in Philippines

Gillan Ropero, ABS-CBN News

Posted at Jan 02 2020 08:01 AM | Updated as of Jan 03 2020 04:15 PM

E-commerce startup Xpanse CEO Josh Supan in an interview with ABS-CBN News in Pasig City. Mark Demayo, ABS-CBN News

MANILA – Millennial tech entrepreneur Josh Supan still shops in brick and mortar stores "8 times out of 10," as he builds virtual stores in the Philippines for international brands.

The 27-year-old founder of Xpanse believes the Philippines will have the "perfect marriage" between physical and online retail, thanks to a deeply entrenched shopping mall culture and a young population that buys almost anything from digital channels from lipsticks to iPhones.

The Manila-based Ateneo de Davao alumnus powered through bankruptcy twice to establish Xpanse, tipped to become the Philippines' second "unicorn" or startup valued at $1 billion (P50.7 billion).

"Usually when you don’t have money you quit, but me and my founders didn’t. We kept with it. I remember I’d always go to different clients and actually beg them, ‘please give it a chance, you’re gonna like it. True enough, they did like it and they stayed," he told ABS-CBN News.

Fresh from a Christmas party from the previous night, Supan was dressed for the interview in average millennial attire: white chunky sneakers, joggers, and a hoodie with his company's logo.

"When we started Xpanse…we wanted the whole business to be able to pay for itself. Eventually people started to notice because apparently a tech company in the Philippines that is stable and in the green is rare."

Xpanse-built websites have grown 300 percent year-on-year in terms of value, Supan said, as online stores’ contribution to brand sales grew to 8 to 12 percent from 1 to 2 percent in 2017.

The company is more than halfway to the monthly P35 million revenue it needs to achieve "unicorn" status. Past $1 billion startups include Uber, Airbnb, Go-Jek and Space X.

CAPPING PHYSICAL REACH

"There’s no need to over-expand your brand in terms of brick and mortar. I don’t have to open 7,000 locations. I can have a few key locations and then just do the rest online," he said.

"In other countries, they always fear this thing called ‘retail apocalypse,’ a lot of brick and mortar brands filed for bankruptcy because not a lot of Americans go to physical stores anymore. I don’t think that’s the case for the Philippines," he said.

Supan is building Xpanse's niche among shoppers who buy "wants" such as fashion from "needs" like food.

"You have to have an avenue or like a medium for the wants of a specific person because that’s never gonna leave a certain person, especially if they have the buying power for it,” he said.

'EXPONENTIAL' GROWTH

Growth in startups is "exponential," often without enough time to "catch your breath as a company," Supan said.

"It’s a good problem, I guess. We’re all forced to grow up faster than we should be," he said.

"You don’t wanna squander it because you never know, especially in tech, next day baka (maybe) you’re bankrupt. You always have to be on your guard basically."

After reaching billion-dollar status, which Xpanse targets within the first quarter of 2020, the firm plans to expand to Singapore, Indonesia, and Vietnam to enable cross-border shipping.

E-commerce in the Philippines will likely mature and become a "staple" in 3-4 years.

"Other countries realize it already. When the Philippines is ready at least we’re right there ready to help everybody else," he said.

(Editor's Note: An earlier version of this story mentioned brand names that were removed upon the request of the interviewee.)