The rise of micro-influencers are among Indonesia’s top prospects

2018 was a rocky year for Tagtoo, the digital advertising company I work. But, by the end of the 12-months, we were ahead of where we were at the end of 2017.

The road was filled with hardships and hurdles and we had a close call with failure. But, we persevered through the tough times  and eventually found success.

A major reason our hard work paid off is we got a grasp on how we could make a breakthrough in Indonesia.

Since our entrance into this market, we have been paying close attention to the digital marketing development in Indonesia.

As an ad-tech company, we are fortunate to receive first-hand information of future growth trajectory through clients we collaborate and approach. Coupled with insights gained from interviewing marketing professionals, we cherrypicked four key marketing trends to watch out for in 2019.

We hope this can help more companies prepare themselves better for the upcoming challenges.

The strong growth in digital advertising

The demand for digital advertising — banner ads, video ads, and native ads — will become stronger as more Indonesians have access to internet service via their desktops and mobile devices.

Despite 2017’s internet penetration standing at only 54.68 per cent, The Association for Internet Service Provider in Indonesia has revealed that the total number of internet users (around 144 million) signifies a lucrative digital advertising opportunity.

The outlay for mobile ads will account for nearly 50 per cent of total digital ads expenditure in 2019, reaching US$312 million. Since buying a decent smartphone is increasingly conventional, mobile ads are becoming the first touchpoint for advertisers to enter an Indonesian user’s personal space.

The emergence of more personalized ads on mobile devices is anticipated. More Internet user data will be collected from smartphone use.

The next problem for Indonesian e-commerce is how to harness user data to drive more conversions.

In addition, ad-targeting is going to shift from traditional demographic targeting to advanced behavioural targeting. This transformation will show a significant increase in the effectiveness of digital ads and drive more transactions.

More transparent reports are needed

Indonesia’s digital advertising is at a nascent stage.

Many companies are just beginning their online presence and have a limited understanding of digital advertising. This situation creates a grey area or a loophole that can be exploited.

Transparency and reliability in digital advertising remains a serious issue in Indonesia.

Also Read: Internet penetration in Indonesia reaches 143M people: APJII Report

Fake reports and incorrect data are frequently disclosed after advertisers outsource digital advertising to some traditional agencies.

It’s hard to judge the campaign performance.

Most advertisers don’t know if their ads are properly displayed or if the post-campaign reports are authentic. Many are mislead by the incorrect data and falsely believe their advertising campaign performs well.

“That’s why we highly encourage our clients to set up Google Analytics,” Mick Lu, head of Indonesia, Tagtoo, shared.

As more advertisers become tech-savvy, the use of a third-party tracking tool, such as Google Analytics, will help more professional ad-tech companies rise to the top.

“Learning how to interpret their own data in a correct way is critical for the business operation. That way, it helps clarify the performance attribution between agencies and clients, avoiding unnecessary trust issues,” Lu continued.

A report that fully reflects the real performance is what the Indonesian market desperately needs.

This 2019, we are positive that digital advertising will become more transparent.

Agencies offer more strategic values

There is a huge gap in terms of digital marketing in Indonesia.

Top internet businesses have built relatively competitive digital advertising teams and are well-equipped with the latest digital marketing skills.

On the other hand, SMEs and budding startups are trying to catch up.

Indonesia will see this gap becoming bigger in the coming years as more capital is instilled to cooperates and unicorn startups. Most digital placements are tightly grasped and leave no room for small players.

To surpass these difficulties, digital agencies play an important role.

They could provide strategic value through strategy, campaign execution, and scale; helping smaller companies compete with bigger names.

By collaborating with professional agencies to leverage their expertise, smaller companies can stay focused on their core business and product optimization with limited resources at hand.

This way, it could create more chances for smaller companies to survive and transition into the next stage where more resources and capitals are available to assemble a competent team.

Also Read: Happened in Indonesia: Bukalapak launches R&D centre, bike-sharing service in Bandung

“Most Indonesian entrepreneurs haven’t realized the importance of data collection while many international companies have been utilizing data for product optimization for so long,” shared Kent Kong, marketing director of Wellcomm, Indonesia’s largest electronic gadgets retailer.

“With more new methodologies and marketing tools brought by agencies, I strongly believe it would help radically change the way Indonesian entrepreneur does business,” Kong continued in the exclusive interview with Tagtoo.

Micro-Influencer marketing becomes popular

Influencer marketing is the next holy grail for Indonesia companies to push sales to another level.

By utilising the influence celebrities have on their huge fanbases, companies gain an additional secret weapon to stimulate the stagnant growth of revenue.

However, not every company, especially for SMEs, can afford to pay a celebrity millions of dollars for a simple one-time campaign. This amount of money is enough for a startup or small company to run operations for several months.

Actually, turning to micro-influencers (those with 50,000 followers and below) in a specific field could be a more realistic and cost-effective method.

Also Read: 4 startups making an impact by including corporate social responsibility in their business model

While these micro-influencers may not possess as many followers as popular celebrities, their fanbases are far more focused and more likely to make conversions.

Unlike megastars, these micro-influencers seem much more relatable to the average person.

The grassroots spirit they represent shows greater authenticity and reliability, which people can easily resonate with.

Think of it this way, a friend’s recommendation is always more impactful than what TV stars boast of.

The importance of tapping into Influencer marketing is well recognized.

With more micro-influencers mushrooming up in major platforms, such as Instagram and Vigo, it’s widely believed that micro-influencers will become mainstream in 2019.

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e27 publishes relevant guest contributions from the community. Share your honest opinions and expert knowledge by submitting your content here.

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Go ahead, ask someone to join you at Echelon. We got your second (and third) ticket covered.

We’re not giving you flowers or chocolates or cards or plushies. But because we do love you, we want to make a good impression this Valentine’s week (yep, we’re going for a Valentine’s week and not just a day).

So, two things:

Get one free Starter ticket for every purchase of 1 Starter ticket

We have a lot of things in store for you this Echelon and we know it would be a lot more fun if you bring someone with you. Starter tickets give you access to all three conference stages (Founder, Future, Capital), the TOP100 pitching stage, exhibition areas and partnered zones (TOP100, Marketplace, country pavilions and Talent Zone), the official Echelon App, and the Echelon Official Afterparty.

Our Valentine’s promo can be found here.

Find out more about Echelon 2019

Get two free Starter tickets for every purchase of 1 Premier ticket

They say three’s a crowd but we say the more the merrier. Besides, your Premier ticket will give you all Starter ticket access plus other special features like one-on-one meetings, business matching, access to workshops and roundtable discussions, and many more so you’ll be busy in case you lose track of the two people you’re giving your free Starter tickets to.

Purchase your Premier ticket and we’ll send you a code to get your 2 free Starter tickets. Get tickets here

This promo runs beginning right now until 17th of February (or until supplies last).

 

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Echelon Asia Summit 2019 is bringing together 15,000 of the best and brightest of APAC’s tech ecosystem. Happening on May 23-24 at the Singapore Expo, Echelon features 3 conference stages, over 300 exhibitors, TOP100 startup pitching, special workshops and roundtable discussions, and many more.

Register today!

Get updates and share your Echelon story on social media using #Echelon2019

The post Our idea of a good Valentine: Free Echelon Asia Summit 2019 tickets appeared first on e27.

Albert Lucius talks about OVO’s partnership with Grab as well as how he dealt with failures and challenges

Last week, we encouraged members of our Telegram Group to drop their burning questions for OVO Chief Product Officer Albert Lucius for the revived e27 Ask Me Anything (AMA) feature –and he has returned with his answers.

Find out what Lucius got to say about the company’s partnership with Southeast Asian ride-hailing giant Grab –and how they plan to bring greater inclusivity through their work.

Will Indonesia become a digital-first market for payments? Should it? – Kevin M.

Currently, digital adoption for payments in Indonesia is still very low. However it is growing rapidly. Digital payments have many benefits, including [the ability to] onboard more unbanked Indonesians into financial inclusion.

Whether Indonesia will become a digital-first market depends on many factors: Infrastructure improvements, regulation, and technology enablement. I personally believe Indonesia is heading into the right direction. Indonesia will benefit greatly from digital payments, especially as a fragmented archipelago with physical infrastructure that is far too challenging for a full blown financial and banking service.

What exactly is the greatest challenge in promoting cashless payment in Indonesia? Why did it only begin to take off in 2018? – Anisa M.

The deeply embedded habit of utilising cash and infrastructure are the key challenges in promoting cashless payment. Having an expansive ecosystem also plays a key role in wider acceptance and adoption of cashless payment in Indonesia.

Also Read: [Updated] Tokopedia, OVO team up to offer the payment service on the e-commerce platform

What are some of your most memorable failures, and what lessons did you learn from it?
– Hiro

I’ve personally had many failures in life and I believe that’s part of life. The most important part is that we learned from it.

In the context of building a startup, my most memorable failure was when we put business first ahead of customers. I think the pressure to put business growth ahead is very strong in startup environment, especially due to pressure to grow the business for fundraising. Sometimes, when we are chasing growth, we made business decisions that prioritise short term growth instead of focussing on what the customers really need.

Fortunately, we realised this very early on as we have open communication channel with our customers. We’re here building products ultimately for the customers, so we have to strive to serve them. When you have customers loving your products and services, they will be your supporters for the long term and bring more customers for you.

What is the most unknown and counter-intuitive fact about Southeast Asian startup ecosystem? – Arnaud Bonzom

The Southeast Asia startup ecosystem changed dramatically in the past five years. I remember when I first started hearing about the large Indonesians unicorns (Tokopedia, Traveloka) back then in 2012. No one saw them as a destination to work for.

Then I started Kudo in 2014, we had to literally convince people to move from working in large corporations into joining a startup. Now in 2019, everything couldn’t be more further apart. Working at large unicorns is suddenly the cool thing to do.

What I’m trying to say is that Southeast Asia is a VERY dynamic ecosystem, and it changes very fast. This is not only in terms of people hiring, but also regulation, ecosystem, and competitive landscape. So my tips for any potential founders in Southeast Asia: Don’t wait, do it now. That six months of wait could mean the difference between “you’re the head of the train” or “you’re one of the ‘copycats’ who are always one step behind.”

Also Read: Indonesian digital payment services platform OVO appoints new CTO, with focus on growth

What’s your long-term vision on how the company will change the way Indonesians, Southeast Asians, or even global citizens live? – Julien Condamines

OVO aims to be the premiere digital wallet for Indonesians. We will be supporting Indonesians as they go about their days, from the moment they wake up until they fall asleep. We want to break the heavy habit of using cash, allowing more people to be part of the financial inclusion, and supporting, in the long run, Indonesia’s growth as a digital economy powerhouse.

What is the biggest reward from your partnership with Grab? And what’s the biggest
problem? – Patera P.

Since partnering with Grab, we have seen incredible growth towards our goal of making digital payments something anyone can use anywhere, anytime:

• Made cashless payments available for millions of Indonesians for the first time!
• With OVO on the Grab and Tokopedia platform, OVO is now available on more than 115 million devices
• Our large, shared user base attracts many businesses including many small- and medium-sized enterprises (SMEs)
• With acceptance across offline retail, online-to-offline services and online commerce, we have become the most widely accepted payments platform
• As of December 2018, we have onboarded more than 230.000 SMEs into the cashless movement
• Finally, OVO has now become the e-wallet with the most use-cases
• Millions of middle class consumers use OVO now to pay cashless for Grab transport, Grab food delivery as well as offline transactions at small and large merchants, from warung stalls to major malls

Our value proposition isn’t limited to OVO. As we give Indonesians more reasons to use OVO at more places, I’m glad that it also means Grab drivers can earn more, as more people top-up their OVO wallets with Grab drivers.

Also Read: How coworking space operator UnionSPACE plan to support fintech startups in Indonesia

What are your plans to ensure inclusivity moving forward? – Prisca A.

OVO currently partners with many organisations focusing on financial inclusivity, such as Kudo and Warung Pintar. Through the reach of their agent network, OVO will be able to reach many Indonesians who are still untapped by technology and financial services.

In addition to that, OVO will continue to expand its partnership with notable brands in the technology and retail sphere, as well as strengthening OVO financial services to attract more merchants and customers. Ultimately providing significant contribution to the national financial inclusion rate.

More payments players will enter in 2019. What’s OVO’s user retention and acquisition strategy other than cashback? It seems like payment players are competing in giving bigger cashback percentage nowadays – Richard D.

We keep expanding our services based on Indonesian most use cases. We want to be their primary wallet where customers can use OVO’s financial services from the moment they wake up until they sleep.

In the long run, by enabling consumers to pay cashless for things they usually pay for –but in a more convenient, more affordable, and safer method– that’s what going to make cashless win against cash.

We’ve seen this trend happening in other countries, such as China. I recently visited China, and everyone is using digital payments to pay and send money around because it is the most convenient thing to do. When paying via digital is easier and more convenient than cash, eventually more and more users will create a snowball effect to move to digital payments.

Also Read: Aiming to add 4 new startups, Mandiri Capital Indonesia targets insurtech, investment management sectors

There are so many cashless services. What’s OVO doing differently, and is it too idealistic to think that mobile payments can solve financial inclusion challenges? – Budi Azwar

Our open ecosystem makes it super easy to choose cashless: Our strategy is to build trust and value. We open up our ecosystem and create interoperability with the partners people trust enough to spend their money with: Grab, Tokopedia, Hypermart, Matahari Department Stores, even your favourite cendol and satay stalls.

Is it too idealistic? I really don’t think so. Financial inclusion is all about opening access to the people to begin with, and then providing a product solution that caters to them. Digital payments have far less barrier to entry compared to a full blown banking solution. Digital payments also don’t require the heavy investment of infrastructure such as bank branches; it makes digital payment solutions able to expand more rapidly across the archipelago of Indonesia.

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Image Credit: OVO

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The Singapore-based company raises the round from Singapore’s Wavemaker Partners

Musiio, an AI-based digital music discovery and creation platform, has secured US$1 million seed round from Singapore’s Wavemaker Partners. Joining the round is Exponential Creativity Ventures from U.S. and angels, as reported by Techcrunch.

Musiio focusses on reducing inefficiencies in music curation using artificial intelligence that augments the human curators’ work. The purpose is to give those who lack the time to scour Spotify the opportunity to automate or partially automate the music search process.

Also Read: These are the five startups joining Phandeeyar Accelerator third batch

This would be the second deal Musiio secured but the first that is out of its Entrepreneur First (EF) program. The first one was done April 2018 and was worth US$57,000 courtesy of EF.

The seven-person operation was founded when Musiio CEO Hazel Savage, who’s a former streaming executive, met CTO Aron Pettersson in the Entrepreneur First program in Singapore.

Musiio’s clients include Free Music Archive (FMA), the public music site by independent U.S. radio station WFMU. With FMA, Musiio worked on developing a playlist that raised the profile of a number of songs that had been buried deep in the catalog, allowing fair chances for a track to get more number of plays.

Also Read: IOT-based bike-sharing service GOWES launched in Semarang, Indonesia

“We’re expecting two or three commercial announcements as we’re working with streaming companies and sync companies for now,”Savage said.
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Photo by rawpixel on Unsplash

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Your defining features could be the problem

Two years ago, we took a long hard look at our business.

We had recently made substantial changes to our business model but weren’t getting the results we wanted.

After spending some time with a whiteboard and a few smart people, we could see clearly where we needed to focus our efforts — we had a lousy conversion rate.

There were two possible solutions:

1. We could get more eyeballs — drive more traffic to the website.
2. We could figure out why our product wasn’t converting.

Let me state the obvious — dramatically increasing the traffic at your site is not easy. We were already doing everything we could on this front.

Besides, with bad conversion, we were throwing a huge amount of users away. It made a lot more sense to focus on option 2.

Still, option 2 was no easy road. Determining what is preventing users from converting is difficult.

For example, we use Aha! to collate user feedback — and listening to users, you would believe we just needed to add more features.

But features are rarely the reason software adoption efforts fail, plus our product already had a shit ton of features.

According to research from the University of Washington, here’s what is important for software adoption:

_{Most important factors for realising the value of software (I got this from HBR/University of Washington. But sadly can’t find the original link)}

As you can see, functionality is rarely the problem. We also looked at our usage metrics to see if any particular feature was standing out.

After some research, it turned out several features had a high correlation with conversion.

Unsurprisingly, they were the features that made Hiri different from other email clients.

Great! Surely all we needed to do was inform and educate. Tell users about these fantastic features so they would use them and convert.

Time for a new onboarding mechanism

At Hiri, we’re big fans of Samuel Hulick’s UserOnboard.

By tearing down some well-known applications, Samuel does an excellent job of teaching people how to think about onboarding. It’s fantastic.

We created an onboarding process that followed Samuel’s rules. We refined the login process, carefully highlighted our key features. We took the time to craft the copy, adding some much-needed personality. The results made us pretty happy.

But, when we pushed it, it didn’t have the impact we were hoping for (not blaming Samuel here!).

We iterated and measured, redesigned and tweaked. But nothing seemed to work.

The reality was that most users paid little attention to our onboarding.

They weren’t reading our precious copy. They simply blazed their way through it as quickly as possible — dismissing pop-ups and walkthroughs just as fast as they could click.

I mean, who doesn’t know how to use an email app?

A different lens to look through

I’ve been handling “User Experience” (UX) since before it was called UX.

By training, I’m an Industrial Designer. A lot of UX concepts have been taken from Industrial Design, but I think one is particularly relevant when it comes to onboarding:

Mental models.

A mental model is an important part of the product adoption process, which looks something like this:

^{The line in the background depicts how a user is feeling at a particular gate. Might cover this in a future post.}

I’ve highlighted the attributes relevant to mental models. The two key points here are:

1. Your product should work the way I expect it to.
2. How I expect your product to work is largely based on my experience using other products.

I’ve known this stuff for a long time but always looked at it as a usability principle rather than a conversion principle.

Also Read: These are the five startups joining Phandeeyar Accelerator third batch

We use elements of this stuff throughout Hiri.

For example, we use conventions that people are familiar with; dropdowns, toolbars, autocomplete, yada yada.

But it occurred to me that we might be able to leverage this principle to help with conversion.

The other important onboarding concept came to light when my co-founder, Kevin, finished the book Hacking Growth, by Sean Ellis.

This is a much more natural way to discover features.

It puts the user in control — no more force feeding them information through a complicated educational onboarding process (which people ignore anyway).

More importantly, it reduced our time-to-Aha moment from one week to one hour.

Our conversion rate shot up from 1 in 50 to 1 in 10. A huge difference.

Conclusion

This approach isn’t going to work for everyone. But I think everyone can take something from it.

Here are the key takeaways:

1. Know what your Aha moment is.
2. Know how long it takes to get there. Try to reduce this time.
3. Be aware that what makes your product unique could also cause confusion.
4. Try to meet user’s expectations — before they use your product, how do they think it should function?
5. Find ways for users to take control and discover your USP/Aha moment naturally.

I hope you’ve found this article useful. Questions, comments? Leave them below and I promise that I will try to answer them. If you liked this article, please share!

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David Power is Founder & COO of Hiri, an ingenious email app.

Photo by John Schnobrich on Unsplash

e27 publishes relevant guest contributions from the community. Share your honest opinions and expert knowledge by submitting your content here.

The post A novel approach to onboarding appeared first on e27.

Investors seemed open-minded, but did not think it would radically change their strategy

The Stock Exchange of Thailand (SET) has applied for a digital operating license, a move that would allow people to buy and sell cryptocurrencies on the bourse, according to the Bangkok Post.

A core part of the plan is to leverage third-party private companies that already use the exchange. Companies that trade securities on the SET will be able to apply for a broker and dealer license that will allow them to trade “digital assets” (aka cryptocurrencies).

If approved, SET would join a handful of stock exchanges around the world that allow people to buy/sell cryptocurrencies.

Pattera Dilokrungthirapop, the Chairwoman of the Association of Securities Companies told the Post that the hope is to follow the trend of people using cryptos as an investment vehicle.

Dilokrugthirapop said the SET still needs to iron out important details like setting up the actual wallet and and figuring out the back-office workflow.

Also Read: A novel approach to onboarding

The stock exchange is hoping to attract investors because of its advantage in public capital and trust. The issue of trust is particularly highlighted this week after the CEO of Quadriga, Canada’s largest exchange, died suddenly and left US$145 million worth of crypto unaccessible.

That being said, private companies have been operating wallets for years and have a lot of experience to lean on.

Presumably, the SET would be subjected to tougher government oversight which could make mom-and-pop investors more comfortable to put their money in the exchange.

The SET will be responsible for regulatory oversight but the Ministry of Finance will control the operating licenses.

Also Read: AI-based digital music discovery platform Musiio secures US$1M seed round

Investment companies quoted by the Bangkok Post were open-minded to the cryptocurrency push but were quick to point out that it would be viewed as something of a ‘side project’ internally. The quotes suggested investors would still be focussed on their main business and the crypto exchange would not be part of that core.

While the application from SET signals a strategic desire to be a crypt0-friendly bourse, there is still a long way before it becomes a reality.

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Photo by Adam Dore on Unsplash

 

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Launching consumer loan service, Akseleran plans to continue on fundraising to hit its IDR105B (US$7.5M) target

Indonesian peer-to-peer (P2P) lending platform Akseleran announced that it has raised a IDR35 billion (US$2.5 million) funding round from undisclosed banks as well as local and foreign venture capital firms.

On a press conference on Thursday, February 7, Akseleran CEO Ivan Tambunan said that the company is aiming for IDR105 billion (US$7.5 million) for this Series A funding round. If everything goes according to plan, the startup will finalise the funding round in March or April 2019.

With the funding, Akseleran plans to develop it technology, particularly its UI/UX; acquire new talents; and expand its presence in Bali and Celebes. The company is also planning to launch several new products.

Akseleran said that at the beginning of the year, it has begun working with e-commerce giants Tokopedia and Bukalapak. By working with these two marketplace platforms, the company expects to add the number of loan recipient this year.

“Our target is to have more than 2,000 loan recipients by end of 2019. By far we have secured around 450 loan recipients. We also have plans to work with B2B companies to add the number of loan recipients,” Tambunan said.

Also Read: Akseleran launches as Indonesia’s first equity crowdfunding platform, aims to bridge funding gap for SMEs and startups

Throughout 2018, Akseleran had channeled a total of IDR210 billion (US$15 million) of loan. By the end of 2019, the company aims to channel up to IDR1.2 trillion (US$85 million).

“We had also experienced an increase in the number of lender, from 25,000 in 2018 to 56,000. The majority of them came from three finance institutions –Indo Surya, Global Indo, and Andalan– and individuals,” Tambunan said.

At the moment the company own four lending products for businesses: Invoice financing (which contributed to a total of 85 per cent of loan on the platform), inventory financing, capital expenditure, and online merchant financing.

“We have recorded 75 per cent of repeat transaction. This indicates lenders’ commitment to loan recipients on the Akseleran platform,” Tambunan said.

Licence finalisation and product launch

 

Akseleran has also begun to add consumer loan to its list of new products since January. In this segment, the startup is working with relevant partner Best Finance.

Also Read: Beauty services marketplace Mecapan completes equity crowdfunding campaign, launches in Indonesia

“We also have plan to launch employee loan service. Once it is ready to launch, the service will be beneficial for recipients with employers’ recommendation,” Tambunan said.

As a P2P lending service, Akseleran claimed to have been able to curb non-performing loan (NPL) rate to 0.5 per cent. The company was able to achieve this number by focussing on mid-size businesses such as oil and gas, retail, and construction. These certain nature of these businesses is able to convince lenders to continue on using Akseleran platform, according to Tambunan.

To strengthen its position as a P2P lending platform, Akseleran expected to secure licence by the financial service authority (OJK) this year. The process requires time and preparation, which includes the implementation of seamless digital signature feature. OJK also requires digital lending companies to keep money on escrow accounts for no more than two days.

“In accordance to OJK’s regulatory sandbox, we aim to be able to fulfill all the requirements for official OJK licence this year,” Tambunan said.

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The article Akseleran Kantongi Dana Segar Baru 35 Miliar Rupiah, Fokus Kejar Izin Resmi dari OJK was written by Yenny Yusra in Bahasa Indonesia for DailySocial. English translation and editing by e27.

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The key is in mastering the basics

For most businesses, e-commerce is (and has been for some time now) an indispensable topic for C-level executives, strategists, analysts, agencies and more when it comes to crafting growth plans.

Beyond all the incredible, exponential figures about e-commerce’s size, growth and potential, I would like to share some perspectives that could bridge the gap between vision and success.

Note: By definition, “Brands” refers to (mostly) companies with B2C brands that have an e-commerce business, primarily through e-commerce platforms with an “Official Store”. These Brands can be selling products from any of these categories: FMCG, Consumer Electronics, Fashion, to name a few.

Currently, I lead a team “at the tip of the spear” where we work closely with Brands to convert the shoppers at the end of their customer journey into delivering the sales (GMV).

The rigorous interaction and engagement with Brands have taught us that multiple key factors often cause significant gaps between vision (e.g. “We want to grow ten times bigger”) and success (e.g. “How come we only grew twice?”).

These can be narrowed down to three most frequently observed factors:

1) Lack of effective organizational set-up optimized for E-Commerce

For all the amazing things about Digital Commerce, the realization of success (e.g. convert more shoppers to buy, and shoppers to buy more) still depends largely on People & Teams.

Any partnership between Brands and e-commerce platforms cannot succeed by solely depending on the biggest exposure, best tools (e.g. search, store decoration, flash sales, etc) and best deals (e.g. free delivery, heavy discounts, vouchers, etc).

It still boils down to the People & Teams (both on Brands’ and E-Commerce Platform’s side) who will work together to strategize, plan, execute and ideally, perform real-time optimizations.

However, at most Southeast Asian Brands (particularly in Indonesia), a lack of organisational set-up that’s designed optimally for e-commerce is a major impediment to true exponential growth.

The first challenge: some Brands lack an e-commerce team.

If the same Brand Key Account Manager (KAM) has to prioritise between three to five offline channels (around 90 per cent of national annual sales) and three to five e-commerce platforms (one to 10 per cent of national annual sales), it’s clear where the attention, effort and resources will go to.

The same goes for the Operation’s role (to manage online stores & product page front-end operations), Graphics role (to develop visuals for mobile-App-optimized presentation to online shopper) and even Supply Chain roles (to manage On-Time-In-Full (OTIF) stock fulfillment for high availability, either through the Brand’s own warehouses or a third Party like Distributor or “Enabler”).

It is crucial that Brands have a “Head of e-commerce” and a KAM specially dedicated for e-commerce.

The best brands can even take it further by having dedicated KAM per E-commerce platform to increase agility/speed and minimize conflict of interest.

The second challenge: some Brands are either not truly committed to or lacking support from the organization, due to poor cross-functional support.

The most typical structural setup is the reporting line between the Head of e-commerce and the Sales Director.

While this may make sense on the surface, the reality is the Sales Director would inevitably be incentivized to prioritise “bigger” offline channels again, decreasing the necessary investment of effort and resources into future-proofing the business through e-commerce.

Also, to win in e-commerce, Brands need to have the attention, expertise and insights from multiple functions — excellence in sales tactics, marketing and supplying.

The best practices we see from exponential-growth Brands to combat these two problems include: having the Head of e-commerce report directly to the CEO in the market or to an N-1, equipping the Head of e-commerce with its autonomous e-commerce budget independent from offline channels, and even designing the budget to be “complete”.

This will increase the speed of decision-making, problem-solving and brainstorming so that Brands grow in a more dynamic, real-time manner.

2) Eagerness to “shortcut” to the “cool, sexy” stage before mastering fundamentals

All e-commerce practitioners know the following basic theory: To sell successfully, one requires a lot of eyeball-traffic which can be exchanged for product page views that can be converted into GMV/Sales through things like compelling content, product availability, competitive prices, other value-enhancing mechanics and multiple payment options. All while being underpinned by a seamless end-to-end experience (no bugs, no crashes, minimal latency, etc).

The real challenge is not being unaware of the theory, but knowing how to execute each of these building blocks with quality output, speed and consistency.

Also Read: 15 more awesome startups that will be apart of TOP100 APAC 2019

From my experience, Brands often start most discussions by asking these types of questions for e-commerce planning:

“What’s the big launch for next year?”

“What are the cool stuff we can do (or do more of)?”

“What’s the latest technology that we can leverage on to do cutting-edge stuff?”

These types of questions are valid and important, but the problem arises when Brands only focus on these questions and neglect other fundamental questions as a result.

Also Read: What we learned from almost failing before an Indonesia break through

Exponential-growth Brands always work hard to prioritize mastering the fundamentals before moving on to the “cool/sexy/awesome” topics.

They put a high priority on “hygiene factors” before anything else.

Questions to Brands: Do you have your fundamentals in check?

• Support from top management to work with Supply Chain and Distributor to ensure that stock fulfilment to consumers is On-Time and In-Full for consistent high product availability.
• Collaboration with marketing teams, creative agencies and graphics team to ensure that all product shots are of high-quality. The same goes for all the Brand’s key visuals on the e-commerce platform, within their stores and beyond.
• Clearing weekly and monthly content and promotional plans to refresh key messages to shoppers.
• Strong channel management practices and pricing strategies to ensure regular competitive prices while not destroying brand value through over-discounting.

Most of all, since e-commerce platforms operate by algorithmic ranking, they need to do all of the above consistently to gain traction for their Brands and SKUs in order to stand out from the millions of products on e-commerce.

3) Not driving enough traffic to the Brand’s official product page

A commonly mentioned analogy that e-commerce practitioners have heard of many times goes like this:

“Imagine the e-commerce platform as the traditional offline Shopping Mall, and your Brand’s Official Store is one of the many shops in the mall. While the Mall will invest in bringing in total traffic to the building, the shop needs to do its own advertising within and outside the Mall to bring more of its target shoppers to its doorstep.”

Most Brands that fail to grow as fast as their expectations often have the misconception that “The e-commerce market is growing fast and it has a huge quantity of daily active users (DAU), so there is more than enough traffic to give my brand sustained growth in Page Views. Therefore, why do I need to invest in bringing my own traffic?”

The thing is, just like the offline Mall, all e-commerce platforms want to grow the number of brands, sellers, assortment and product categories and it is not efficient for the platform to invest in hyper-targeted online traffic that’s best-suited for every Product Category and every Brand.

So while the DAU continues increasing, it may or may not benefit the specific Brand immediately.

This means that, while it’s easy for Brands to tap on the existing platform DAU at the start to gain a fast uptick in Page Views, it will become increasingly difficult to sustain this trajectory.

Brands must also remember that on any platforms, there exists a highly dynamic environment.

Every Brand wants to stand out and grow fast, and while one of e-commerce’s advantage is the so-called “infinite” shelf-space, one must remember that there are limits to online shoppers’ attention span.

The wisest Brands understand this and invest in driving quality traffic consistently to their Official Stores or Product Pages on the e-commerce platform.

They have a good mix of “re-targeting high-affinity customers” and “acquiring new relevant customers” traffic strategy. They constantly perform optimizations to continuously improve the quality of the traffic. Plus, they don’t simply focus on the quantity but equally devote attention to the quality.

Finally, these exponential-growth Brands leverage on both their Paid and Owned Media assets to do an always-on traffic strategy instead of just waiting to only drive traffic during the major campaigns by the e-commerce Platform.

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In reality, it is definitely not easy to immediately implement the above practices.
It requires strong willingness & commitment to shift mindsets and make short-term trade-offs and sacrifices, especially from the top-level decision-makers.

But, from experience, it is very much possible, and it takes courageous talents & executives in any Brands to start the ball rolling (& keep it so).

“Rely not on your euphoric vision, but make it your victorious reality”.

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Photo by rawpixel on Unsplash

e27 publishes relevant guest contributions from the community. Share your honest opinions and expert knowledge by submitting your content here.

The post Why brands fail on e-commerce and what they can do about it appeared first on e27.

Orangewood Labs was part of Y Combinator’s Winter 2018 batch

Aditya Bhatia, an alumnus of National Institute of Design (Ahmedabad), used to work as a furniture designer in Delhi, but was wasn’t happy with the way the whole industry functioned. He realised that most of the custom pieces being designed and created at traditional design studios would take two to three months to finish and it also involved a lot of manual labour.

Bhatia was determined to rewrite the whole concept, and knew that new-age technologies could be leveraged to bring in a change. He went to his friends Abhinav Das and Akash Bansal, both have prior startup building experience, and brainstormed.

“We started thinking of making the whole process better and thought of making a smart CNC (computer numerical control) router which can cut pieces of wood very fast and very precisely,” Das shares the story with e27. “This ended up in the founding of Orangewood Labs.”

Established in 2017, Noida (near Delhi)- and California-based Orangewood is a design-led startup that creates customised furniture on demand, using robotics. The company, which follows a zero-inventory model, says it can make furniture within a few hours of receiving the order from the client and can ship it the same day. Orangewood’s robots are cheaper, light-weight, and easier to deploy, says Das. Since these robots are connected to the internet, it is easy to run applications on the cloud and operate remotely.

“With the ability to create custom furniture on demand, we can help you get that unique look that sets you apart from the rest,” Das claims. “Using robots for crafting the furniture pieces gives a millimetre level accuracy. We have a virtually limitless supply of fresh designs from designers all over the world.”

Also Read: He built a robotics startup with just US$100 and no prior experience; It has now won some top e-tailers

Most of Orangewood’s customers are enterprises, which are in need of custom furniture but don’t want to wait two to three months getting it done. The startup is also working with several co-working spaces in India to design furniture for them. “As of now, we follow a services model, where the customer pays a monthly or per operation fee,” says Das, who is the CEO of the startup.

Orangewood targets businesses in the countries like the US, Europe and India.

The tech venture, which is currently based in California, was part of Y Combinator’s (YC) Winter 2018 batch. The YC experience was very rewarding, adds Das, since the trio got an opportunity to meet in person most high-profile entrepreneurs they follow and admire.

“But getting into YC is really hard, with the number of applications increasing every year (the Winter 2019 has 10,000 applications). Thankfully, we got into it. We learnt lots of things from YC partners,” he says.

Das, who holds a Mechanical and Automation Engineering Degree from Guru Govind Singh Indraprastha University (Delhi) is not new to the startup world. In 2009, he founded a startup called Evomo, which built rural utility vehicles. The startup, however, ceased operations in 2015.

“But the whole experience of building ultra low-cost trucks helped me build better machines, and it came in handy when we started Orangewood,” he smiles. “Overall, startups are an evolving science and when you build things that have not been built before, you should know where to fail. We are making less mistakes since we have the experience of failing in the previous venture.”

Talking about the robotics industry in Asia, Das says that robots are not as popular as they should be in the industry at large. Just like computers in the 60’s, robots are expensive and still require trained professionals to handle them.

“Asia is doing as good as some of the developed nations when it comes to robotics, with China leading. India is slow in terms of adoption and its is still expensive to deploy and use robots here. Most SMEs are aware that they would become obsolete if they don’t move towards more automation. But access to capital for most SMEs in India is still a problem,” he adds. “We want to change that, starting with furniture industry. Having said that, India is a very good test bed and it’s now easier for us to develop technology here.”

Also Read: A novel approach to onboarding

Finding experienced hardware talent in India is hard, admits Das. “However, we have been quite lucky to have an awesome team which is not afraid to push the boundaries. Most of our team members are fresh graduates and are happy to learn new skills as we grow.”

In addition to YC, a few funds and angels have also invested in Orangewood, and the startup would be raising the next round soon.

“Its been a roller coaster ride till now, the very thought that your creations will have a huge impact on how humanity functions is awesome,” he concludes.

The post This robotic startup can make custom furniture on demand within few hours of getting your order appeared first on e27.

Flourishing in the “same same but different” continent

Between the Asian and Western (US and Europe) markets, the latter was once considered the more lucrative option of the two whereas the former was dubbed as slow-paced and laggard.

But this concept has changed dramatically over the past decade.

More and more international giants have steadily set foot on the Asian soil and are continuing to do so.

Asia now holds many profitable business prospects given its changing economic scenario — the steady progression of its countries are now leading more people to embrace technology.

Hence, there is a huge untapped potential in the developing Asian markets due to the surplus of mobile devices, internet accessibility, and cloud technology.

That being said, the big commercial ventures that have been successful in the Western markets have not yet been able to obtain a stronghold in Asian markets.

In fact, many businesses have tasted failure when they set foot there.

Why? That is because they have failed to alter themselves to better suit the Asian market.

See, Asia is a diverse community where preferences change every mile.

The local customs and traditions are so varied that businesses need to make a complete change in their marketing strategy or partner with local businesses in order to secure a place in the Asian markets.

Let’s see what challenges business ventures face when they decide to enter the Asian markets.

1. Which country?

First, know that each country in Asia is different.

India, China, Indonesia, and Japan — all these countries share very little in common from the language spoken to the food consumed.

In Asia, businesses have to use a step-by-step approach; taking one country at a time.

Once they familiarise themselves with one country, making a business mark on the second would be more easy and comfortable.

2. Similar yet so diverse

As pointed out before, Asian countries seem similar to outsiders but are in fact vastly different. Thus, businesses will have to sort out or alter their plans for each country based on local preferences.

Take McDonald’s for example. The fast-food giant famous for its non-vegetarian menus had to insert vegetarian meals when it entered India.

In a similar vein, Subway segregated its vegetarian menu from the non-vegetarian menu to avoid offending Indian sentiments.

Culture is the defining point of making a good entry into the Asian markets.

Imagine McDonald’s entering the Indian market with a completely non-vegetarian menu. Would it have been able to taste success with such a strategy?

So it is simple.

What works for the US and European markets might not necessarily work for the Asian markets.

3. Local competition

If you want to succeed in the Asian market you will have to deal with the stiff local competition.

Local businesses have flourished in their markets because they have a better understanding of the local preferences.

An Uber would not work in a country like Indonesia simply because locals prefer the two-wheeler ride here. That is because it is cheaper and easier to commute in the traffic snarls than hitch a four-wheeler ride on the roads.

This is where local businesses come into play.

They understand the local challenges better and design their businesses around it.

4. Payment options

Asia is a place that uses cash as its main mode of payment. And because of that, many businesses have failed to take off in Asian countries.

Therefore, the wise thing to do is to start accepting payments in cash. Remember that the card-only mode of payment would never work in Asia.

Another challenge is that of online shopping.

Also Read: Why brands fail on e-commerce and what they can do about it

Till businesses start to accept cash on delivery as a mode of payment, it will certainly find few takers in the Asian market.

5. Political challenges

The governments in Asia are very finicky when it comes to foreign investments.

Recently, many countries have tweaked their rules and regulations to be more inviting, of which cyber and encryption laws are included.

With the many cases of cyber data misuse, the Asian governments demand that the customer databases be maintained in their respective countries only.

These new laws on data protection have to be adhered to.

Also Read: On Cybersecurity and Digital Forensics: How Group-IB is Reshaping What We Know

The fake news issue on our social media platforms is another grave challenge that businesses have to resolve before entering the Asian markets.

This, in turn, requires sharing the customer database with the local authorities so that they have full control to monitor content closely.

6. Local mobilisation

For effective business strategy, it is wise for international businesses to align their interests with the local partners.

This will help them initially to gain ground and lay a strong foundation.

The local recruitments and the sourcing of raw materials also become easy once they partner with a local team which will help take care of rules and regulations.

The fragmentation found in Asian countries has definitely been a challenge that any business would face when trying to gain entry there.

Thus, this has to be rectified by finding trustworthy local partners.

Conclusion

Setting foray into Asian markets is easier said than done.

It is beyond the obligatory handshakes and the bows.

Many-a-times, you will need to micro-manage things to resolve disputes at the initial stages itself before it gets into a full-fledged problem.

Asia is every businessman’s dream. It is developing much faster than any other European or American nations.

Just get your priorities and risk recognition in check and seize this golden time to penetrate the Asian markets!

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Image credit: www.pexels.com

e27 publishes relevant guest contributions from the community. Share your honest opinions and expert knowledge by submitting your content here.

The post Top 6 business challenges to consider before entering Asian markets appeared first on e27.