Payfazz, an Indonesia-based fintech platform providing financial and payment services, announced today it has made a strategic investment of US$30 million in Xfers, a Singapore-based payments infrastructure company. Following this agreement, both firms will be part of a newly-formed financial entity Fazz Financial Group (FFG).

Both companies will continue retaining their respective names whilst operating under the new financial entity.

FFG has appointed Hendra Kwik, Co-founder and CEO of Payfazz as Group CEO. Joining him as the Group’s Deputy CEO is Tianwei Liu, Co-founder and CEO of Xfers. The two will continue as CEOs of their respective companies. The group has also appointed Robert Polana, former-CFO of Tiket.com, as CFO.

With this investment, Xfers will serve as the B2B arm of FFG – focussed on connecting external merchants to the payment infrastructure and user network amassed by the group. In Indonesia, Xfers currently connects businesses to a range of payment methods that include bank transfer, e-wallet and offline channels such as agent banking networks and convenience stores.

Also Read: How blockchain-powered fintech services can improve financial inclusion

As per a press note, FFG will focus on strengthening its infrastructure and product offerings from Q2 2021. The group will also look to launch a “zero-integration” payment solution targeted at Singaporean merchants and a “single-integration” service to connect brands and fintechs looking to enter Southeast Asia with the local payment methods of the region.

Hendra Kwik, Group CEO of Fazz Financial Group, said, “Leveraging Payfazz’s local Indonesia network and Xfers’ payments infrastructure in the region, it was a natural next step for both firms to band together and work towards a common goal. With the newly-formed FFG group, our team will be broadening the combined capabilities to accelerate inclusion through financial services in Southeast Asia.”

“We are thrilled to further deepen our partnership with PAYFAZZ, and for Xfers’ new role as the B2B and regional arm of Fazz Financial Group. With more resources on hand, we are also looking forward to helping more brands enter Southeast Asia. Especially for businesses looking to access the underserved consumer segment in Indonesia,” commented Tianwei Liu, Deputy CEO of Fazz Financial Group

Established in 2016, Payfazz claims it operates the largest branchless banking agent network in Indonesia, distributing banking services to the 180 million unbanked within the country. The company noted it has more than 250,000 registered agents spread across rural areas in 514 districts in Indonesia, serving more than 10 million monthly active users in 2020.

Also Read: How fintech can help reach the unbanked and underbanked in Southeast Asia

Payfazz announced in July 2020 it had raised US$53 million in a Series B fundraise co-led by B Capital and Insignia Ventures Partners, with participation from Tiger Global, Y Combinator, ACE & Company and BRI Ventures.

Xfers, through agent banking networks (commonly known as warung networks in Indonesia), allows small and medium-sized businesses (SMEs) to accept payments and send money. By partnering with Payfazz and other agent banking networks as its clients, the company noted it has access to over 10 million underbanked consumers in Indonesia.

In spite of Southeast Asia’s recent growth in financial inclusion, a high percentage of the population in the region still do not have access to basic financial services. According to Fitch Ratings, Southeast Asia is home to an unbanked population of about 290 million.

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Image Credit: Fazz Financial Group

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As we move into 2021 and a new decade unfolds before us there are several key digital transformation trends that will come to the fore and transform the way business is conducted.

We are increasingly living in a world where a digital-first strategy, or at the very least integration of the digital strategy as a core feature of business operations, is a necessity not a luxury –only those that digitise operations and themselves deliver digital offerings can hope to succeed.

These are critical and challenging transformations that the world’s leading companies must embrace and implement. The mantra then is ‘innovate or die’.

The past 12 months, where COVID-19 has severely impacted businesses across the globe, have demonstrated that those corporations with a mature digital strategy and capabilities fared much better than those who perhaps failed to invest sufficiently in the preceding years before the pandemic struck.

To those organisations that have suffered from the major disruptions to commerce, digital transformation is imperative.

In the industrial context then, what are the key drivers of this transformation? What can we expect in the coming decade? We can broadly classify them into four categories.

Data revolution

The industry 4.0 movement is defined by data and an organisation’s capabilities to collect, store, analyse and harness the data at their disposal. Harvesting of data through IoT devices, stored in the cloud (AWS, Azure) with flexible accessibility, will be an integral part of this revolution.

The aviation industry must embrace new technologies and move to ensure Standard Operating Procedures (SOPs), facilities and production lines are data-rich so they can effectively compete with well-funded and fast moving ‘digital-native’ competitors.

Also Read: How this Tokyo-based IoT startup seeks to revolutionise healthcare

Success is dependent on access to real-time data combined with intelligence software platforms that translate raw information to meaningful insights, which are then actionable.

Critical infrastructure such as 5G will unlock new possibilities with vastly improved data transfer speeds– Asia is leading the way here with Korea and Japan already launching their 5G networks and Singapore recently announcing multi-million dollar grants to develop, test and adopt 5G solutions.

Automation

This is another key driver where the implementation of digital-capable hardware and integration with software platforms that support business requirements will form the basis of vastly superior industrial processes. The use of next-gen robotics, Artificial Intelligence (AI), machine learning and Augmented Reality/Virtual Reality (AR/VR) technology will drive this automation revolution.

These data rich environments in turn will ensure production sites, facilities, warehouses are far more efficient and will provide real-time insights into the health of operations and critically will offer the ability to predict potential issues ahead of time.

Over the past decade we have seen an exponential rise in the quantum of data available, but for many companies, it remains dormant, its secrets hidden – designing automated, intelligent systems that analyse and extract relevant information is the first step towards autonomous systems which will be able to predict and make business-critical decisions.

Data-driven predictions will be a game-changer for aviation companies that are asset-heavy by ensuring minimal to no down-time of assets.

Even front-line workers will be able to enjoy the benefits to this momentous shift by the use of smart devices (smart glasses, tablets etc enhanced by the aforementioned capabilities) in the field – their daily tasks will no longer be manual, error-prone and paper-based, with technology eliminating repetitive and mundane tasks, freeing them to focus more on the problem-solving aspect of their jobs, and thus transforming them into ‘super engineers’.

Collaboration and communitie

Collaboration with external providers to speed up and enhance innovation efforts. The traditional R&D model and corporate strategy to build solutions in-house will fall by the wayside (inward facing investment into innovation projects are more often than not too narrow in scope and siloed).

Also Read: Digital transformation is now real: How COVID-19 has sparked innovation in tech companies

They will increasingly be replaced by a hybrid collaborative model where ‘Outside-In’ innovation programmes that engage with the technology and research communities across the globe will become the norm. Partnerships with startups of all stages will form an integral part of this new model.

In addition, industry communities have had a digital presence for a while now, however, the exchange of ideas and knowledge has predominantly existed at conferences and other physical encounters among each industry’s domain experts and professionals.

Now is more important than ever that these interactions are digitised and harnessed to drive growth and innovation. The winning platforms that will emerge will be the ones that enable digital interactions with secure information sharing amongst its users, and providing a wealth of digital solutions that help companies solve their biggest problems.

No code platforms

Although part of the wider data and automation drivers mentioned earlier, these software platforms should be highlighted by the new capabilities they offer industrials to take ownership of their digital transformation strategy and projects. These platforms are game-changers because they have the power to disrupt the very process of digital transformation – they empower industrials to take control of the implementation of their digital strategy ‘freeing them from the dependency on traditional consultancies and system integrators.

Low/no code platforms can help deliver transformation projects at a velocity and cost that was previously unthinkable. Need to improve operations on the factory floor? Just use these platforms to create a digital process/application and deploy it to a digital device – individually or to teams – within a few weeks and without coding (thus replacing expensive developers with internal ‘assemblers’).

Think of it this way – you want to construct a building with toy bricks – you can use the Lego brick platform and have it assembled in moments – or you can spend the time, money and effort to research the bricks, design them, produce them (takes several attempts to do it properly!), quality check and then build. The former is eminently easier than the latter – it is critical to business success and is becoming a necessity, not just due to competitive pressures but more importantly due to customer expectations!

The following chart encapsulates the new digital operating model where customer life cycle is measured in terms of solution and platform based development with recurring long term relationships rather than discrete and transactional interactions found in traditional business models:

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Xendit, a Jakarta-based digital payment infrastructure company, has secured US$64.6 million in a Series B funding round led by Accel, TechCrunch has reported.

Y Combinator also participated in the round, which brings the fintech firm’s total amount raised to date to US$88 million.

Xendit intends to use the fresh funds to expand its digital payments infrastructure service to small and medium-sized businesses within the region.

The company is currently operational in Indonesia and the Philippines.

Originally launched in 2014 as a P2P lending platform, Xendit evolved into a payments infrastructure company that enables businesses to accept digital payments without the need to implement integrations with individual providers. It has since expanded its services to include services such as fraud detection, lending, and tax management.

Xendit claims it processes more than 65 million transactions, amounting to US$6.5 billion in payment value annually. The company counts companies such as Grab and Traveloka among its clients.

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While both are necessary for business growth, most companies focus on paid advertising instead of building communities within their apps.

Why not leverage both tools together? In this piece, we’ll explore how you can turn users attracted by your ad campaigns into loyal users who can deliver lasting results for your app.

Paid advertising has been a go-to solution for marketers to capture and target their intended customers. According to Hubpsot, Google ad spending can go between US$9,000 to US$10,000 per month — and that’s only the median spending.

But with the staggering cost, why do businesses still prefer paid advertising?

For one, online ads such as paid-per-click ads get you immediate visibility against your competitors. Second, paid advertising also enables companies to control their spending based on the types of ads and how much visibility they want vis-a-vis the costs.

All costs, all promises?

However, if you want quality ad space, of course, you have to pay more. With over 3.5 billion searches per day just on Google alone, competing and capturing the attention of your intended customers can be a challenge.

Add that users often reject or ignore online advertising as it affects their overall online experience. Aside from skipping ads, users also use ad blockers, which caused an estimated US$2.12 billion loss for businesses in 2020. That’s quite a lot of money down the drain.

Staying on top of users’ minds

But let’s say you managed to get the right audience and bring them to use your product. How do you then engage and retain your users to support your brand? How do you make sure that your well-spent ad money does not go to waste after all?

Also Read: The Unicroach approach: 10 tips on community building

Let’s take a look at mobile applications, for example.

While marketers can pool thousands of dollars to bring their product to top search results and promote it on app stores, they still need to compete with tons of applications on both Google and Apple app markets. As of June 2020, there are about 2.96 million apps published in the Google Play Store, while there are nearly 4.4 million apps available in the Apple App Store, according to Statista.

But then, aside from the competition, apps still have to make sure that those who downloaded their products will continue using them. The sad truth is, only 32 per cent of users will return to an app 11 times or more after downloading it, while 25 per cent of the users abandon an app after one use.

Using online advertising is indeed beneficial in that it brings attention to your product to eventually convert, engage, and retain users. However, with the high costs and unpredictability of results, businesses and developers should learn to take advantage of their existing users and their communities to ensure their apps’ success.

Building communities is the best marketing strategy

More than the catchy copies and stunning visuals, what makes users stick to a brand or an app is the experience they get from patronising it. People today crave authentic experiences, they believe in companies that support their causes, and they rally behind brands that foster human connections in a world where everything seems disconnected.

That’s why social media applications remain at the top of the app world hierarchy. In 2020, the short-form video platform TikTok was the most downloaded app worldwide. Among the top 10 top app downloads, seven are social media applications.

It’s no surprise that social media applications are the most downloaded, especially last year. With social distancing measures in place due to COVID-19, a lot of people turned to their social apps to stay connected with their community.

So, how can you translate this into your app?

Bringing the in-app community together

Apps should then start taking advantage of their customers and the in-app communities they build and incorporate them into their marketing strategies. It is possible that apps already have marketing strategies that include spending on advertising. However, an in-app community could offer the missing link between acquisition and retention.

Community building can help fill the gap between one-time use and long-term adoption. Think of your current in-app community as your brand ambassadors, bringing in more people to use your app and incentivising them to stay because of the meaningful relationships they’ve built with other users. According to Facebook, 2.7 more users are more likely to stay in-app for a sense of community and belonging. It only shows that in-app communities play a vital role in retaining app users.

In a survey conducted by the influencer marketing platform Aspire IQ, 92.3 per cent of brand respondents said that the community has positively impacted their brand.

In the same survey, the company also found that 81 per cent of the user respondents agreed that others could affect their brand preference. To them, friends influence them the most, followed by influencers, employees, and experts.

That is why it is crucial to engage your users and their community actively. “Customers [also] provide significant impact beyond purchases, with word-of-mouth referrals to their networks,” the survey revealed.

Making the experience more social

Communities can take shape offline and online. As more customers want to engage with their favourite brands and influence their community, it is necessary to create a meaningful social experience in your application.

In-app communities allow you to forge strong connections by bringing users into one place,  letting them interact, and influence others. A social feature like chat and groups can help foster communities in your app, as it creates an outlet for users to talk about the things they love.

And by finding people who value the same things as them, they will feel a sense of belongingness and acceptance among their online peers. Once they feel like they created their virtual community, they will find themselves coming back to your app to connect and share their thoughts among their group.

Mobile performance company Applift says that adding an in-app messaging feature can increase app retention by as much as 3.5 times.

Further, social tools such as likes and comments can generate a positive effect on your app. They can be an excellent and real-time measurement for user engagement and bring people who share the same interests together through their interactions on posts featured on profiles and feeds.

Moreover, social media takes the process of mutual acquaintance to a whole new level by allowing the user to find, connect with and share information with a much broader online audience — even those outside of the user’s circle.

The role of UGC

On the other hand, user-generated content (UGC), such as product reviews, as well as discussion threads in in-app group chats and feeds, can be beneficial for your app, too, as customers view them as more impactful and authentic.

According to Forbes, 97 per cent of online buyers read reviews before they make a purchase. Further, 79 per cent of people say that UGC positively impacts their purchasing decisions.

Also Read: How to continue community building online amid the pandemic

In fact, Stackla reports that 90 per cent of consumers value authenticity in deciding which brands to support. Most especially to younger consumers — the Millennials and GenZs — they look for authentic and community-driven brands.

So aside from product quality and customer service, positive ratings and reviews are among the top three characteristics that younger consumers look for in a brand for them to support it.

Relying on your loyal customer base

Having a solid community believing in your brand or app can organically help you bring your company to new heights. It can also create a loyal customer base that can get more people to utilise your product.

And aside from bringing in more users, a positive app experience and brand association can increase app retention by bringing in returning users who simply cannot resist using your app.

Beauty brand Glossier is an excellent example of a brand succeeding through brand loyalty. According to the company, they believe that 90 per cent of its revenue is due to repeat customers who regularly engage with them.

That is because brands stand a chance to make 60 to 70 per cent profits with returning customers. On the other hand, the probability of making a sale with a new customer is only 5-20 per cent.

It’s what inside that counts

Communications firm Edelman found that fewer people trust advertising, with three out of four saying that they avoid it altogether. With that, we see that paid ads are often ignored, despite the constant visibility and strategic online placements.

The most important thing is creating authentic, communal relationships among your users— and your app can definitely make these experiences happen. Provide them with the space to reach out to people who value the same things as them. Give them the platform to influence their peers. And ultimately, create social experiences for your users to ensure app engagement and retention.

People say it’s what’s outside that lures us in — just as how paid advertising can attract users. However, always remember that what makes us stay is often what’s inside.

While targeting the users via paid advertising can be an excellent step to bring in customers to use your application, it’s not always that the consumers will take a bite. What ultimately matters is the user experience you provide and the connections they build through social interactions that happened in your application.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

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SiCepat Ekspres, an Indonesian last-mile delivery company, has received US$170 million in a Series B funding round from a slew of investors including Temasek subsidiary Pavilion Capital, Falcon House Partners and MDI Ventures. DEG (the German Development Finance Institution), Indies Capital, Trihill Capital and Daiwa Securities also participated.

“This financing round is designed to further fortify SiCepat’s position as the leading end-to-end logistics service provider in the Indonesian market and to potentially explore expansion to other markets in Southeast Asia,” shared The Kim Hai, Founder and CEO of the parent company Onstar Express.

SiCepat claims its new funding round is the largest Series B raised in Southeast Asia. While the company did not explicitly disclose its valuation, it termed itself as a “soonicorn” – a term used for companies approaching unicorn status (US$1 billion in valuation).

Also Read: COVID-19 triggers supply chain and logistics transformation, but there are gaps to fill: Marc Dragon of Reefknot Investments

SiCepat was bootstrapped in 2014 as a last-mile delivery services company for social commerce merchants in Indonesia. Since then, it has expanded its last-mile delivery to cater for e-commerce platforms in Indonesia. Recently, the company consolidated its key logistics assets across warehousing, fulfilment and e-distribution to provide an integrated suite of logistics services.

The company claims it is profitable and fulfilled more than 1.4 million packages daily in 2020.

“Indonesian e-commerce market stood at US$32 billion in 2020 with a projected five-year CAGR of 21 per cent to become US$82 billion industry by 2025. We believe that SiCepat is ideally positioned to serve customers from e-commerce giants to uprising social commerce players which contribute an estimated 25 per cent to the total digital commerce economy,” said Sebastian Togelang, Managing Partner of Kejora Capital.

SiCepat’s funding comes amidst an uptick in investments for logistics companies in Indonesia. This week, Dropezy, an Indonesian startup focusing on next-day delivery services for daily essentials such as groceries, announced it received an undisclosed amount in pre-seed funding from investors such as Taurus Ventures and Kopi Kenangan Fund.

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Image Credit: SiCepat

 

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