Why we built Armada – an introduction from the founders

Updated: Nov 13, 2021

Enabling e-commerce entrepreneurs to build the brand of their dreams

By Gelo Torres & Andreas Hufnagl | November 8, 2021

The Situation

The world of ecommerce in the Philippines has seen unprecedented growth momentum. In 2019, the e-commerce GMV in the Philippines amounted to 3 billion USD. In 2020, it climbed to 4 billion USD. It was projected to reach a staggering 15 billion USD by 2025. Accelerated by the pandemic, the online sellers in the country will likely outperform such projections for the sector again, as they have in the past.

Every month in 2021 so far, more than 10,000 new online shops were created on Shopee, Lazada, and Shopify, in the Philippines. As the lockdown restrictions blocked people’s incomes from traditional employment, the pronounced entrepreneurial spirit of the Filipinos translated and still translates into the creation of new e-commerce businesses by the thousands. We see a wave of Entrepreneurs building direct-to-consumer (D2C) brands, selling products online, and generating their own income.

The e-commerce era in the Philippines kicked off. As seen in other economies, these D2C brands have the potential to create massive value. In some cases, such brands have accomplished annual sales of 50 million USD within the first 2 years of business (Glamnetic, United States), have been valued at 1 billion USD by investors (Gymshark, United Kingdom), or grew to 20 million USD within just 4 years (KeaBabies, Singapore). In this era, the hot consumer brands of the future are being created by e-commerce entrepreneurs.

The Problem

Over the past year, we observed this development. We spoke to a couple dozen e-commerce entrepreneurs and brand owners in the Philippines and learned that they were doing well and that their businesses had picked up. Monthly sales quickly soared up to 5 to 7 digits in PHP sales or more. The businesses started generating profits almost immediately in double-digit percentages.

However, the entrepreneurs encountered growth constraints. The entrepreneurs told us that whilst their businesses were growing at a fast pace, the growth could have been much better. They were confident they could have been making sales 10x the amount they were currently at, and potentially even much more if not for such constraints.

When asked what challenges and constraints these entrepreneurs were facing, some of the things we heard were:

“We run out of stock.”

“We cannot budget more ad spend.”

“We don’t have the money to buy stocks of new products.”

“We are basically just my family and me.”

“We only have 5 people on the team, some are part-time.”

“We spend most of the time on fulfilling the orders.”

“We know the product and the customers. We don’t know how SEO or retargeting work.”

“We want to sell in other countries, but we don’t have the infrastructure.”

We started to hear the same issues again and again. Most D2C brands are facing the same growth constraints. It basically boils down to three areas:

i) Lack of access to capital in sizable amounts

ii) Lack of capacity in terms of time, people, and resources

iii) Lack of capabilities in e-commerce, operations, tech, data, human resources, cross-border, etc.

These are the constraints and roadblocks that hinder the entrepreneurs from taking their brands from e.g., 5 million PHP sales per year to 50 or 500 million PHP.

The Solution

We want to offer to the e-commerce entrepreneurs a platform that will remove all growth constraints and unlock the full growth potential of their brand.

Armada invests into vanguard e-commerce entrepreneurs and their promising D2C brands. We form a partnership together where we provide growth capital and run the operations of the business, from sourcing (first mile) to channel management to fulfillment (last mile), including customer service, across countries in Southeast Asia. We deliver the tech-enabled backend to handle processes from payments, accounting, reporting, and inventory management. We provide technology, data, infrastructure, and resources. We offer all this as a platform for growth to enable the entrepreneurs to build the brand of their dreams.

That’s why we built Armada.

The Key Message

We believe the best possible way to run and grow a D2C brand successfully is to combine the creative mastermind of the brand (= entrepreneur) with an effective and well-funded operator (= Armada).

To the e-commerce Entrepreneurs

If you would like to grow your D2C brand to new levels, then get in touch with us. Partner up with us. Join the Armada. Expand across Southeast Asia. You focus on what you like and what you do best and we’ll do everything else for you. Together we will make your brand grow 10x and more in no time. You can reach us directly at andreas.hufnagl@armada-brands.com.

We are looking forward to hearing from you.

All the best,

Gelo and Andreas