KUALA LUMPUR: HelloGold, Malaysia's first shariah-compliant gold savings platform, is shutting down its operations in the country and Thailand. It said the business is no longer commercially viable in the current market condition and it will pivot completely to a business-to-business (B2B) model.
In an email to depositors on Thursday (Jan 26), HelloGold chief executive officer Robin Lee said the platform will cease to operate on Feb 2.
The platform was launched in Malaysia in 2017 and expanded to Thailand in 2019. However, due to the pandemic, its plans to venture into the Middle East and Indonesia were halted. According to Lee, the platform had over 60,000 active users with investments amounting to over RM25 million in the two countries.
“Unfortunately, 60,000 isn't a number that is sustainable, because when we launched [the platform] our goal was primarily targeted at the mass market rather than the mass affluent,” Lee told DigitalEdge.
“With the mass market, the amount of money that people have available to save is limited. So, we had to make sure that we get to a level of scale that would justify the acquisition costs of these customers. Unfortunately, we were never able to achieve that. And it wasn't commercially viable for us to continue our retail business.”
However, he is bullish that the shift to a B2B model and white-labelling its product with potential partners will provide more opportunities for the company.
“We do have interests outside Malaysia, from the Middle East and Africa, to white label our product. We just have to focus on building the platform and hopefully secure these partnerships over time. We just couldn't do the retail thing. We don't have the balance sheet to fund it,” said Lee.
HelloGold's users are given until 7am Malaysian time on Feb 2 to buy, sell and withdraw funds and any remaining gold on the platform.
Any remaining gold in users' account after the deadline will be sold at 12pm Malaysian time and 11am Thai time on the same day at a prevailing price. The funds will then be transferred to users' bank accounts on record within five working days.
As for Smart Saver customers, all Smart Saver gold will be delivered into users' HelloGold account for customers to sell and withdraw funds by 12pm Malaysian time on Jan 27.
HelloGold was launched to allow low-to-medium income customers to have access to gold investments. Customers were able to save and buy gold from as low as RM1.
Source : The Edge Markets