- Article
- Innovation & Transformation
- Improve Efficiency
RENPHO’s cash made simple with one-stop e-Commerce solution
RENPHO is a healthcare household manufacturer with a vision to enhance people’s health, fitness and wellness journey with Smart Healthy Simplified solutions. The company aspires to create a growing ecosystem of smart lifestyle products that provide technologically advanced solutions that are essential, accessible and everyday.
The Challenge
RENPHO’s products are predominantly sold on Amazon’s e-marketplace platform across 30 markets in more than 10 currencies. Over the past five years, RENPHO’s business has grown exponentially – amassing a portfolio of over 100 SKUs that’s managed through six trading entities and sold to over 20 million customers.
With its e-Commerce flows managed through a mix of banks and third-party payment service providers (PSP), RENPHO faced increasing risks as transaction volumes surged, including:
• Operational risks. With cash sitting across multiple banking partners, RENPHO was having to make substantial telegraphic transfers each month to consolidate its balances, impacting visibility while incurring unnecessary banking fees.
• Counterparty risks. RENPHO had been relying on a single third-party PSP to process all its e-Commerce transactions on Amazon. RENPHO sought to mitigate counterparty risks by moving its flows to a global bank to reduce unnecessary movement of funds across parties, while speeding up the time for cash to reach its accounts.
• Fraud risks. With business booming, RENPHO sought a more structured solution to make payments on Amazon’s platform, including for expenses related to advertising, marketing, and store maintenance. For a long time, RENPHO’s employees had used the personal credit cards of senior executives to make such payments, exposing its staff to risk of fraud.
The Solution
RENPHO collaborated with HSBC to adopt a one-stop solution to support its end-to-end e-Commerce flows. With HSBC Merchant Box (powered by HSBC Global Wallet) solution, RENPHO has the flexibility to directly collect multicurrency e-Commerce proceeds from Amazon’s platform for each of its six trading entities in 10 markets – bypassing the need for third-party PSPs to collect funds on RENPHO’s behalf.
The solution removes the need for RENPHO to open local currency accounts in each market to collect proceeds in local currencies, while facilitating the flow of e-Commerce proceeds directly into RENPHO’s bank account in real time, meaning the company can now access funds immediately. HSBC Merchant Box currently supports e-Commerce payment collection in USD, EUR, GBP and SGD, with more to be added in the future.
The solution is complemented by the bank’s sophisticated self-service FX tool, GetRate, that’s accessible on HSBCnet. The solution enables RENPHO to access real-time FX rates to convert its sales proceeds across 10+ currencies into one of its three functional currencies (USD, HKD and CNY) to meet day-to-day operational needs.
To support RENPHO’s growing online payment needs, the company adopted HSBC’s Virtual Card solution. This allows RENPHO’s Group treasury to assign cards with tailored limits and timeframes to each trading entity based on their operating needs, with each entity able to issue unlimited number of virtual cards under the pre-set limits. The solution provides flexibility for each trading entity to manage their own business and advertising expenses, while the Group treasury continues to have oversight and control on the company’s overall credit limits and budget spends.
HSBC has enabled us to receive like a local in each market we operate, simplifying the management of our e-Commerce flows and reducing overall risks. The working capital and operational efficiencies we’ve achieved will go a long way in helping us accelerate and scale our business.
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Success
- Reduce counterparty risk by consolidating flows to a single bank
- Enhance operational efficiencies by leveraging a single banking portal for all cash-related matters
- Improve days’ sales outstanding (DSO) through quicker collection of sales proceeds
- Improve days’ payables outstanding (DPO) resulting in improved liquidity optimisation
- Eliminate unnecessary fees associated with moving funds across banking providers
HSBC’s global payment network, strong digital infrastructure and deep financial prowess enable us to deliver innovative solutions that help SME clients like RENPHO reduce cross-border complexities and mitigate risks associated with e-Commerce growth.
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HSBC is committed to innovate new digital propositions to support our clients in this evolving new economy. With e-Commerce being a centerpiece, we are glad to help clients like RENPHO optimise their liquidity and manage risks so they can focus on what they do best – continue their innovation and better serve the world through their smart lifestyle products.
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Currency conversion risk - the value of your foreign currency will be subject to the risk of exchange rate fluctuation. If you choose to convert your foreign currency to other currencies at an exchange rate that is less favourable than the exchange rate in which you made your original conversion to that foreign currency, you may suffer loss in principal.
