eShopWorld founder gets cross-border shopping tills ringing

Irish tech entrepreneur is aiming for $1bn in turnover within 18 months

eShopWorld chief executive Tommy Kelly: “We want to get this business rapidly to $1 billion but we don’t see the runway stopping there.” Photograph: Dara Mac Dónaill

eShopWorld chief executive Tommy Kelly: “We want to get this business rapidly to $1 billion but we don’t see the runway stopping there.” Photograph: Dara Mac Dónaill

 

Tommy Kelly may run one of the most successful technology companies in the Republic but he laughs at the idea that he is a techie.

“People might call me many things both good and bad, but a techie is not one of them,” he says.

The 57-year-old, who hails from north county Dublin, is on a rare trip home, for a family celebration. The entrepreneur, who founded eShopWorld in 2010, may have a home in Malahide but most of his days are spent crisscrossing the United States, where many of his company’s largest clients are based.

“We have a very strong team in Dublin, so the operation largely works independently of me,” says Kelly. “A lot of my time is spent on the frontline with customers, finding out what issues they are facing and how we can help solve them.

“We’re operating in a fast-moving business, so it is far easier to understand the demands that clients are dealing with if I’m out talking to them face to face,” he adds.

His company, which provides bespoke ecommerce solutions that help some of the world’s biggest sports apparel, footwear and lingerie brands, has enjoyed phenomenal success in recent years, gaining both clients and awards left, right and centre.

The Swords-based company, which employs more than 200 people, connects premium brands from Victoria’s Secret to Nike with consumers in more than 200 countries. The group makes it easier for retailers to sell across borders, where they deal with varying currency, tax and localisation issues.

“We remove all the complexities associated with operating in different jurisdictions to enable brands to get to a large-scale audience quickly,” says Kelly. “If you are a brand that wants to get to say between 100 and 200 markets, you don’t want to have to deal with the individual entry requirements for each market so we do it for you.”

Customer service

The entrepreneur stresses that eShopWorld is much more than just sorting out logistics. It also deals with payments, customer service and reducing abandoned online shopping carts and maximising conversions.

Last year it was named company of the year at the annual Technology Ireland software industry awards ceremony in Dublin. That prize came a week after the company was named tech exporter of the year at the Export Industry Awards. During the same month, eShopWorld ranked as Ireland’s fastest-growing tech company in the Deloitte Fast 50 for the third year in succession.

The group, which last year announced plans to hire an additional 250 people to take total headcount to about 400, recorded a 50 per cent rise in revenue last year to €303 million.

Kelly has gone on record saying he believes eShopWorld can exceed $1 billion (€850 million) in annual turnover by the end of 2019. Talking to The Irish Times though, the entrepreneur makes it clear that this is only the start as far as he is concerned.

“We’re only at the beginning of our journey. We want to get this business rapidly to $1 billion but we don’t see the runway stopping there. I think we could easily get ourselves to a place where we’re at between $2 billion and $5 billion,” he says.

“We continue to grow, both geographically and vertically. We were heavy in apparel but are now moving way beyond this, having just signed a deal with one of the world’s leading florists. And we’re also working with high-end whiskey brands, so our offering is continually expanding,” adds Kelly.

The businessman might not be much of a techie himself but he was able to see how technology might help plug a gap for big brands looking to operate in multiple markets. Prior to establishing eShopWorld in 2010, Kelly, who grew up in a farming family and initially studied agriculture, led what was one of Ireland’s largest transportation business after ending up working in the sector “by accident”.

TwoWay Vanguard, which Kelly set up with his brother Joe in 1998, started operating out of a prefab office in the village of Ballyboughal, near Swords. It grew into an international businesses employing about 350 people and providing services to clients that included tech companies such as Creative Labs, Dell, 3Com, IBM and Motorola.

Kelly learned how to deal with trade regulations in different regions through TwoWay, and the company was also an early adopter of technology to grow the business, which was acquired by the Dubai stock exchange-listed logistics group Aramex for an undisclosed sum in 2006.

Cross-border shopping

The entrepreneur stayed on to lead Aramex’s European and North American operations for a further eight years. During his time there, he noted was how difficult it was for brands to retain the customer experience when shipping goods overseas.

“Most of my career prior to setting up eShopWorld was in cross-border transportation and the supply chain, and it became obvious that there was a real gap in the consumer experience for both customers and brands when it came to shopping cross-border,”says Kelly.

“Shoppers were buying goods, predominantly from the US, but these were fulfilled through third parties, so brands lost the relationship with the customer once their product left the premises. In addition, there was little clarity about how long or how much something might cost until it was delivered, so the brand experience was dreadful,” he adds.

There was a general acceptance that consumers would settle for a “less than optimal” experience buying goods online, Kelly says, because ecommerce was predominantly seen as a business-to-business marketplace. However, he felt that brands would increasingly want to reach a bigger cross-border audience and so set-up eShopWorld to address this problem.

The businessman admits it was difficult getting those all-important first deals. Many of the big brands weren’t aware there was an issue.

“We stepped in and said we wanted to give customers visibility from A to Z on pricing and everything evolved from there,” says Kelly. “We won business by pointing out the problem to clients. A lot of large retailers weren’t aware of the international challenges facing them or the complexity faced by customers trying to buy goods from them. They were completely in the dark, so we alerted them to the problem and showed how we could solve it for them.”

Kelly is personable, but also prone to slipping into corporatespeak, making plenty of reference to eShopWorld being “best in class” and so on. There is no doubt, though, that clients think highly of the company.

As Kelly sees it, part of the attraction is that while Amazon might lead the online retail space, its “pile ’em high and sell them cheap” philosophy is unappealing to clients of eShopWorld.

“Amazon is all about being cheaper and is very ‘unbrand friendly’. The type of client we work with wants to make sure they have a good brand awareness. It isn’t just about selling stuff for them,” he says.

eShopWorld has competitors to worry about, including Borderfree, International Checkout and PFSweb, but none that pose a serious threat at present, according to Kelly.

“Borderfree are one of our big competitors and they were acquired by Pitney last year, which is effectively a postal transfer company. They and other competitors are being snapped up by the likes of Pitney, FedEx and DHL and being consumed into a transportation group so they end up being locked into providing solutions based on what their parent owns,” he says.

Increased stake

eShopWorld was last year valued at €300 million, after Asendia, a joint venture from the French and Swiss postal service companies, increased its stake in the group by 10 per cent to 50 per cent.

While Asendia might be a big shareholder, Kelly insists the arrangement eShopWorld has with the company is different from deals involving his competitors.

“Logistics are only a very small part of our focus and, unlike our rivals, we offer complete neutrality, promising best-in-breed providers in different markets,” he says. “As if proof of that were needed I’ve said openly more than once that we only do between 1 or 2 per cent business with Asendia. They have been a fantastic shareholder though.”

While many of us may dread the prospect of Brexit, or the introduction of protectionist measures elsewhere, Kelly is confident that, if anything, they’ll lead to more business for eShopWorld.

“From a personal point of view, I think Brexit is disappointing but it wouldn’t be something we’d be especially concerned about from a business point of view,” he says.

Looking ahead, the businessman is optimistic about the company’s prospects and its ability to ward off rivals. “The next couple of years will all be about focusing on organic growth but I wouldn’t rule out acquisitions in 2019 and beyond if we see suitable businesses that would augment our growth trajectory,” he says.

“We’ll always have competitors but, at this stage, we’re a good few years into this and are well past the proof-of-concept stage. We’ve a mass-market audience and continue to evolve, so I think it would be difficult for others to catch up with us.”

CV

Name: Tommy Kelly

Age: 57

Position: Founder and chief executive of eShopWorld.

Family: Married with three children and six grandchildren.

Lives: Malahide, Co Dublin.

Something you might expect: “Our main desire was to be a global business from day one.”

Something you might not expect: Kelly is a beef farmer: “I grew up as a farmer’s son and have retained my roots by keeping a small farm in north county Dublin. I don’t get much time at it now but I’m looking to devote more energy to it at a future date.”