This article first appeared in Digital Edge, The Edge Malaysia Weekly on July 8, 2024 - July 14, 2024

When Niklas Frassa and Maximillian Lotz decided to venture into the e-commerce space in 2016, flowers were the one thing that stood out. The two entrepreneurs realised it was an untouched segment with huge potential. In Malaysia, all one could find was an occasional florist who happened to have a website.

The first thing they then did was to build a website. Both of them then drove across Kuala Lumpur, talking to traditional florists about their website that could take orders. All they would need now was the actual fulfilment of the product.

“It’s quite random when you’re running a florist shop somewhere in KL and suddenly two Germans walk in and start talking about a flower delivery website. But it worked,” recalls Frassa, the co-founder and chief operating officer of Limitless Technology Group (LTG).

LTG is an e-commerce group that aims to acquire, launch and scale gifting brands across Asia-Pacific. It focuses on four categories: flowers, gifting, cakes and confectioneries. These are across six different brands across six markets, which are Malaysia, Singapore, Indonesia, the Philippines, Hong Kong and Australia.

Initially, it was a challenge to start an e-commerce business, as last-mile logistics were nascent and online payment gateways were harder to build.

They overcame this problem through a proprietary tech platform and by developing end-to-end in-house capabilities.

“It’s a good thing it was hard back then. We [then] built capabilities from learning how to build a website, to setting up our first marketing campaigns and running customer service,” says Frassa.

“In the beginning, it was [Lotz, co-founder and CEO of LTG] and myself sitting in the living room and picking up the phone whenever a customer had a problem. Because we had to do all of these things ourselves, we were able to embed it into the organisation,” he says. “Two weeks into launching the website was Mother’s Day. Of course, we had a surge of orders on the website, and that’s when we fell in love with the business.”

The strong technological foundation was integral, as LTG then grew into the different markets and branched into other verticals such as cakes and confectionery, says Kai Kux, another co-founder and chief financial officer of LTG.

This was done through a central platform to manage all aspects of the business, from online storefronts to order fulfilment, streamlining operations across different countries while maintaining efficiency and quality, explains Kux.

“Our focus is really on integrating every data point that we can collect. Very early on, we built the back-end suite, which then had the purpose of covering the entire customer journey in terms of data from the moment they enter the website. [This includes] capturing traffic data, conversion data, the orders coming in and all the fulfilment-related bits,” says Frassa.

Essentially, data is aggregated from all parts of the platform. The central services of the platform include brand conceptualisation, inventory management, data analytics, payment and fulfilment.

Collected data will then be used for quality assurance, marketing and business intelligence, says Kux.

“We have high visibility of what happens in the company. We have very extensive dashboards that help us see what is happening in the company and be transparent across everything,” adds Kux.

As there is limited competition in the gifts and celebrations space, this leads to an influx of potential acquisitions for LTG, says Kux. LTG then serves as a platform company and is able to plug and play new acquisitions into its back-end systems.

Subsequently, the standardised plug and play makes the acquisition and integration process of new brands seamless. For example, when LTG acquires a company, both businesses would operate independently for a brief period of time. Thereafter, the company’s products are integrated into LTG’s existing platform, with fulfilment processes trained for each product.

“Once this is done, we take their front end, put it on top of our stack and then it automatically starts to run through. [Basically], it’s plug and play. We ensure that we maintain the brand as it is, and continue to build on it,” notes Kux. “That’s the one thing that stays separate … the brand itself. Everything else is processed through our existing fulfilment centres and software.”

The fulfilment centres form the backbone of the LTG ecosystem, says Kux. Currently, LTG has seven such centres.

Happy Bunch is an example of a brand acquired by LTG. To date, Happy Bunch has seen its revenue increase by 150%. The brand, which was previously operating only in Malaysia, is now offered in Singapore and the Philippines, with further plans for expansion.

LVLY, an Australian brand, is another example. It now also operates in Malaysia, Singapore and Hong Kong.

While the company is ready to launch an initial public offering (IPO), Kux believes that currently, the market is not conducive for such an undertaking.

“We have strong relationships with banks that have indicated that as soon as the market is ready, we will be able to launch an IPO. When it comes to the longevity of the company, I think what’s most important is that we have diversified cash flow,” says Kux. “We are in the process of raising a pre-IPO convertible note.”

Meanwhile, as LTG continues to look for companies to complement its portfolio of brands, organic growth remains a key focus, shares Kux. This will be done by nurturing existing brands and maximising their potential; gaining market share through superior product offerings, competitive pricing and exceptional service; and expanding existing acquired brands to new markets.

Throughout the ups and downs of running a business, technology will remain a constant for LTG, says Frassa.

“I think tech is probably the single best instrument we have to stay sane. To give you an idea, there’re fluctuations [in revenue] every month, but it’s only because of tech that we can understand where these fluctuations are coming from,” says Frassa.

“If you want to build an e-commerce business of a certain scale, it’s not about your marketing mix, but about the operations that hold everything together. It’s making sure that you have a reliable tech backbone that can scale from 1,000 orders one day to 10,000 orders the next day. That’s when you will realise that tech is actually the single most important part of the equation.”

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.