Photo of Shirley Leong, HSBC and Paul Chan, Renpho.
Paul Chan
Financial Controller
Founded in California, USA in 2016, Renpho was created with a simple idea: to give people affordable lifestyle products that would act to improve the health of users by being a simple add-on to their regular daily activities.
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The challenge
Renpho’s business has grown exponentially over the past five years. Its vast portfolio of over 100 stock keeping units (SKUs) is managed through six trading entities, with the company’s products sold online to over ten million customers across 19 markets in more than ten currencies.
As volumes surged, Renpho faced increasing risks in the form of:
Operational risks – Renpho’s reconciliation processes had become ill-equipped to manage the growing volume. With cash sitting across multiple banking partners, the company was having to make over 1,000 telegraphic transfers each month to consolidate its balances, impacting visibility while incurring unnecessary fees.
Counterparty risks – Renpho had been relying on a single third-party payment service provider (PSP) – which provided its services to Renpho gratis – to process all its e-commerce transactions on Amazon. Renpho sought to mitigate counterparty risks by moving its flows to a global bank.
Fraud risks – with business booming, Renpho sought a more structured solution to make payments on Amazon’s platform, including expenses related to advertising, marketing and store maintenance. For a long time, Renpho’s employees used the personal credit cards of senior executives to make such payments, exposing 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 – marking the first-of-its-kind for an online commerce company in Hong Kong.
Leveraging HSBC Merchant Box (powered by HSBC Global Wallet) solution, Renpho now has the flexibility to directly collect multicurrency e-commerce proceeds from Amazon’s platform for each of its six trading entities in ten 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 the company’s bank account in real time, meaning Renpho 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, which is accessible on HSBCnet. The solution enables Renpho to access real-time FX rates to convert its sales proceeds across more than ten 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 an 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.
Best practice and innovation
By consolidating its e-commerce flows to a single provider, Renpho has not only reduced counterparty risk but also sped up time to collect its online sales proceeds by two days to improve its days’ sales outstanding (DSO) by US$100m.
The company took further steps to fortify its treasury against potential fraud risks by adopting the use of virtual cards to manage business expenses across trading entities and projects, improving days’ payments outstanding (DPO) by up to 56 days, to optimise group liquidity.
Key benefits
Cost savings.
Number of banking partners/bank accounts reduced.
Process efficiencies.
Improved key performance indicator (KPI) metrics.
Increased automation.
Risk mitigated.
Improved visibility.
Errors reduced.
Manual intervention reduced.
Increased system connectivity.
Future-proof solution.
Yvonne Yiu
Co-Head of Global Payments Solutions, Asia Pacific, HSBC
Heartiest congratulations to Renpho on this significant achievement! Not only does it mark a transformative step in e-commerce banking, but also sets a new standard for operational efficiency.
With HSBC’s global payment network, strong digital infrastructure and deep financial prowess, our solutions are designed to help small-to-medium sized clients like Renpho simplify cross-border complexities and mitigate risks. Through a single banking provider, Renpho also benefit from improved liquidity management and faster cash flows to grow and thrive amid a competitive e-commerce environment.
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The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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