Sam Kim, 24, founder of Auckland-based digital gifting company Gifticon talks receiving investment from rich-lister Bill Smale and how a car crash involving a Maserati set him on the path of business ownership.
What does your business do?
Gifticon is a digital gifting app which tries to solve the problem of long-distance gifting. How it works is users can use our app to purchase gifts from the app like a small cup of coffee through to something like cosmetics or clothing and gift it in the form of a voucher, Instagram DMs (direct messages), or Facebook Messenger or any other third-party social media app that your family and friends use to redeem the actual item in store.
Our goal is to make long-distance gifting easier by reducing labour, time and money as well because it can be costly arranging couriers to get items delivered if you're on the other side of the world. We do product-specific vouchers instead of, say, a $20 voucher. The business is based in Takapuna in Auckland and launched about six months ago.
What was the motivation for starting it?
The idea was started in South Korea in 2005. In South Korea, they don't use gift cards or gift vouchers, instead they use a concept called Gifticon, which means a gift in a digital icon. Because it was a huge success and everyone there uses it, we thought the Asian market was big enough in New Zealand to bring it here.
When we first tried it out we sold over 10,000 vouchers, which was a good sign it was resonating and hopefully we can continue to expand. Koreans and Asians are very familiar with the concept of Gifticon, we wanted to familiarise other people with that. They don't say 'I'm going to give you a gift', they say; 'I'm going to give you a gifticon'.
How big is the team?
We have a team of seven people including our investor Bill Smale, who owns the Smales Farm commercial site, which was previously a farm that housed livestock.
How much investment has Gifticon received from Smale and how did he first get involved in the business?
Bill's role is our investor and director of the company. When I was still a university student at Auckland University, I was studying architecture, I saw an article in the New Zealand Herald mentioning Bill Smale investing in a company called Niesh and so I decided to reach out to him, spoke to him and he decided to invest in the company. It was a seed investment of $200,000. He is an adviser and helps us.
What impact has Covid-19 and the alert level 4 lockdown had on Gifticon?
Because we're in the gift voucher industry, the lockdown hasn't really affected us that much. We see that people are still buying during the lockdown to support their local businesses. An example of this is with global tea brand Gong Cha on our app: over the last two to three weeks, we have sold more than 600 vouchers for them. Even if people can't redeem the vouchers right away, they are still purchasing them for future visits and to support their local businesses through these hard times.
What are your long-term plans for the business once lockdown is lifted?
At the moment we have around 70 businesses that have registered to Gifticon, in Auckland, so once the lockdown ends we want to expand that stable and database to Wellington and Christchurch. After we expand to those cities, and other major cities, our aim is to move onto Brisbane, Melbourne and Sydney.
What are you working on right now?
We working on a project called Gifticon High School where we are signing contracts with high schools in New Zealand to accept the vouchers. We are starting with Westlake Boys High School in Auckland's North Shore, whereby the canteen in the school will have all of their products listed within Gifticon so students can buy the products from the canteen on discount and go to the canteen and redeem the product, making it better for the canteen and easier for the student. It also allows parents and grandparents to buy something for their kids in school, from a distance.
What does competition look like in this market?
There's no one doing digital gifting like us, but there is Grab One and Group On, which have a gifting feature. The difference is that their gifting feature is done via email whereas we are social media orientated.
Have you had any other businesses prior to Gifticon?
I was involved in a minor car crash while I was in university. The car that I crashed into was a Maserati and that guy went to the panel beaters and got a quote and I had to pay $10,000 to fix the back bumper. To pay that off I started an online website, which eventually got quite big, and I was able to finish off paying the $10,000 while I was at university. The website was basically me doing AliExpress drop shipping, whereby I chose a product from AliExpress and created a website on Shopify to sell those products via marketing on Instagram. This was a hot topic back in 2018, everyone used to do it because it was a way to make easy money online. That was a different concept to Gifticon.
What advice do you give to others who want to start their own business?
You need to love your idea. If you don't love your idea you won't get carried away with the idea. For me, I got carried away with the idea of Gifticon and suddenly when I opened my eyes I realised that there was a team around me. Without loving your idea it is impossible to make the idea work.