Behind SCI Ecommerce’s CEO shake up

This article is translated and updated from a blog post in Chinese that Momentum Works published last week on WeChat platform. The update includes context for the non-Chinese speaking audience in Southeast Asia’s ecommerce ecosystem. 

On 10 June, SCI Ecommerce, one of Southeast Asia’s major ecommerce enablers, announced the appointment of ex-Lazada executive Magnus Ekbom as Group CEO, replacing founder Joseph Liu Jiannan. 

SCI also announced the acquisition of Ekbom’s AI startup SEAI Technologies. A few other executives were appointed, including a new CFO who has 28 years of experience. 

SCI has already been a puzzling existence for Southeast Asia’s ecommerce enabler ecosystem, as well as the brands they normally serve. 

Here is how a rival ecommerce enabler founder explained his bewilderment: “We have never crossed paths with SCI at any of the brand tenders – in fact, we do not see them at all! Yet they report probably the highest amount of GMV amongst any ecommerce enabler in the region”. 

Well, that is not too hard to answer – SCI primarily works with Chinese cross border brands, not international ones. 

A few more facts, and thoughts: 

1. The current form of SCI started in Singapore in 2014, where Joseph Liu, who had been a seller for 3 years, started seriously studying the story of Baozun (NASDAQ: BZUN), China’s frontrunner ecommerce enabler invested by Alibaba;
2. If you remember, back then the leading ecommerce platform in Singapore was … Qoo10. Qoo10 was bigger than Lazada then, and offered gamified experience for consumers, as well as its own logistics. Qoo10 however went for liquidation in November 2024, after acquiring Wish and a few Korean platforms;
3. SCI attracted investment from a number of well-known tech and ecommerce veterans in 2016, and started ramping up its operations. According to its financial reports, the revenue CAGR between 2017-2020 was more than 300%;
4. In 2020, SCI’s revenue exceeded US$100 million. A few American and Chinese investment banks encouraged it to file for IPO, either in Hong Kong or Nasdaq;
5. That attempt did not succeed for various reasons, one of them being SCI not having any institutional investors in previous funding rounds. Amongst the many venture-funded Southeast Asian ecommerce enablers, Synagie became the first to IPO – its market share once reached 8 times that of Baozun.
6. In 2021, SCI received a US$88 million institutional funding round led by Singapore-based PE firm Asia Partners. The firm was founded by Nick Nash, who after a 12 year career at General Atlantic, engineered Sea Group’s IPO as group president. He left Sea Group (Shopee’s parent company) in 2018 and started Asia Partners the year after;
7. Asia Partners raised US$118 million in its first fund, and closed US$474 million 2nd fund in 2024. It published some interesting reports about macro narratives of Southeast Asia venture markets, and vowed to invest in “rhinos” instead of “unicorns”. Asia Partners defined rhinos as companies that reached US$1 billion valuation through PE multiples; 
8. Alas, rhinos native to Southeast Asia are the smallest rhinos in the world, and one of the subspecies in the region was called “pigmy rhinos” in old texts. Both rhino species in this region are critically endangered; 
   
9. Asia Partners invested in a number of startups in the region including OYO-inspired low cost hotel aggregator Reddorz, consumer traffic reseller Shopback, Malaysian used car platform Carsome, telemedicine operator Doctor Anywhere, Indonesian FMCG distributor GuangAda etc.; 
   
10. Asia Partners have been cautious and meticulous, avoiding Southeast Asia’s major startup blow-ups including Zilingo, eFishery etc.. Amongst this portfolio, Carsome and SCI are probably closest to “rhinos”;
11. SCI wanted to become “Baozun + Shopify”, serving big brands like Baozun but also at the same time providing software tools to smaller ecommerce merchants. Perfect story, except that it does not work;
    
                                                  SCI team in Hangzhou
12. In 2022, amid a sharp turn in capital market sentiment – a few things are happening in Southeast Asia:
    1. International brands wanted to protect their profits, while ecommerce platforms are raising take rates (ads + commissions), squeezing margins for enablers; 
    2. Chinese brands, which SCI primarily serves, are already known to squeeze their distributors inside China wherever possible; 
    3. There is a very small number of active sellers compared to China, making a software (“Shopify”) value proposition almost impossible to work; 
13. Who is to blame at this juncture? How can Asia Partners bring SCI to public listing? Regardless, as a PE firm, taking control might be the most rational thing to do. Southeast Asian media said Asia Partners bought 21 million shares from Joseph Liu. What we have seen in the current filed cap table is that Asia Partners owns 37.7% as the largest shareholder, followed by 20.93% by Joseph Liu; 
    
14. The choice of Magnus Ekbom is very interesting. IYKYK. 

Momentum Works has argued in Ecommerce in Southeast Asia report 2024 that the ecommerce enabler market in Southeast Asia is not only small but very competitive. Players need to expand into adjacent areas to realise the value. 

In the upcoming Ecommerce in Southeast Asia 2025 report, which we will release towards the end of this month, we will discuss more details on this ecosystem transformation. Stay tuned!