As simple as it may sound in theory, expanding business in any new market is not an easy feat. It is crucial to understand which market to choose and why. It is also important to have a clear picture of business and fundraising opportunities in the new market, have solid strategies on how to quickly and effectively scale, and have an understanding of the main challenges and considerations in doing business in the new market.

Owing to a host of factors including tax benefits, ease of doing business, free market, and favourable policies such as visa-free entry policy for overseas investors from 170 countries as well as eligibility for 100% ownership rights of a company for foreigners, Hong Kong serves as a competitive destination in the Asia Pacific region for many entrepreneurs, VCs, and startup founders. 

In partnership with Globalization Partners, we explored why Hong Kong is an ideal destination to expand your business in a webinar titled ‘Why and How Should You Expand Your Business To Hong Kong’. This webinar is a part of the Market Access Series where we highlight different markets in the APAC region and get in-depth insights from experts on the benefits, challenges, and considerations of bringing your business there.

The Hong Kong Market Access Series webinar featured Arshad Chowdhury, Managing Partner at Betatron Venture Group; Jayne KC Chan, Head of StartmeupHK at InvestHK; and Charles Ferguson, General Manager – Asia Pacific at Globalization Partners; in a panel moderated by Dennis Poh, Founder and CEO of Legatcy.

First things first: Why Hong Kong?

Jayne from StartmeupHK at InvestHK opens the answer to this question with a simple but extremely significant point: sales opportunity. “Any company looking to expand to any new market needs one fundamental thing — the opportunity and scope to sell their business,” she said. “Plus, if you are a startup looking to raise capital, there is no dearth of VCs and other funding avenues [in Hong Kong],” she added. Jayne further emphasised that Hong Kong has a relatively small but sophisticated and tech-savvy audience and thus, the country can serve as an excellent destination to test out products and services before launching full-throttle across the region.

In fact, as per research by Statista, in 2020, around 90 per cent of Hong Kong’s population were using the internet and the penetration rate is set to increase to over 94.5 per cent by the year 2026.

Also read: Here’s why startups should consider South Korea for business expansion

Another unique advantage of Hong Kong is the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) which comprises the two Special Administrative Regions of Hong Kong and Macao, and the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong Province. This adds to a market of 86 million people, just 14 minutes away, housing a cluster of tech giants and an extremely tech-savvy audience. A 2019 KPMG survey also found that the majority of Greater Bay Area consumers identify as ‘tech-savvy’.

Furthermore, while talent continues to be a challenge faced by Hong Kong, as with the rest of the world, the quality of talent available is still far better, owing to the fact that Hong Kong is home to 5 of the world’s top universities.

A technology-enabled labour force with a market ripe for digital disruptions

As per a PwC report, the talent pool in Hong Kong is keen on upskilling and learning technological abilities. In a survey, 61 per cent said they are confident about learning new skills or even completely retraining to adapt to technology.

Ferguson from Globalization Partners added that Hong Kong has access to excellent R&D talent. “The government of Hong Kong has been increasingly focused on STEM education for the last four years with STEM internship schemes, launching technology-enabled talent pipelines. This has raised the local labour force’s level of technology enablement,” he explained. Ferguson argued that strategically, Hong Kong is phenomenal as it sits in the centre of the region.

Also read: Looking to expand your business? Head down to the Philippines!

Betatron Venture Group is a Hong-Kong based VC firm focused on early-stage B2B tech companies across Asia, excluding Mainland China. Climate change is one of the main factors that Betatron focuses on. Arshad from Betatron said, “In our portfolio, we have seen successes in B2B companies that are operating across a wide range of industries. Hong Kong is ripe for finding customers across various industries — from corporate services to logistics to hiring and training platforms owing to the nature of the community; Despite digitalisation and innovation, many family-run traditional businesses are looking to modernise. There is a lot of scope for SaaS startups and SMEs,” he said.

From seed to IPO: A bustling fundraising scene

Hong Kong is home to six unicorns including some of the biggest in the world. With such a promising startup scene, the country has a rich and diverse fundraising ecosystem. 

In early 2019, there were more than 400 VCs in the country according to the Hong Kong Venture Capital and Private Equity Association. By late 2019, the entire combination of assets managed by VCs in Hong Kong was at USD 1.5 trillion. The landscape is a mix of formal as well as informal processes. Many established VC funds, including Betatron, are open to cold emails and remote transactions, however, for Angels, most businesses have to be here to close deals. 

Arshad suggested that while there is a lot of money here, the business has to match the appetite of investors. Arshad explained that culturally, Hong Kong is a lot like New York. “Investors here are focused on the business model. They ask questions like ‘what’s your burn rate? Does the economic model make sense?’ and so on,” he explained. 

Overcoming challenges and taking the next big step

Finding the right product-market fit and understanding the market are some of the common concerns that startup founders have when looking to expand into a new market. Amidst the pandemic, one of the blessings in disguise has been the emergence of virtual events and this enables people from all over the world to attend top-notch events and get a clear and better understanding of niche industries. 

The panel emphasised the importance of networking. Jayne said, “you have to leverage your network and communicate with as many peers as possible to get a first-hand understanding of the market and industry trends.”

Also read: Challenges and opportunities for startups expanding to Thailand

Ferguson also explained the importance of having local talent on the ground. “Locals have the know-how of the market, the culture, and the capacity to help build better relationships with existing customers as well as help expand the market by reaching new clientele. In addition, a local team helps businesses build a high-quality global workforce that can help contribute to the company’s global growth goals.

Hong Kong is open for business with its free trade policies, tax benefits, and a tech-savvy population ripe for embracing everything modern that digital transformation can bring. Suppose you are planning to scale and look at an ideal next stop. In that case, Hong Kong has a lot to offer: great sales opportunities, fundraising avenues, and most importantly, a warm hospitable attitude towards foreign business. So, don’t wait, go!

To learn more, view the webinar here.

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This article is produced by the e27 team, sponsored by Globalization Partners

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

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As one of the leading names in the alternative protein industry, Buhler has teamed up with several organisations and institutions in the industry to help propel it forward.

In this interview with e27 for the Asia’s Alternative Protein Showcase, Dr Aparna Venkatesh, Collaborative Innovation Lead at Buhler, explains the important role that partnership plays in their mission to support the alternative protein industry.

Also Read: Bühler invests in Big Idea Ventures’s New Protein Fund; to invest in up to 100 plant- and cell-based firms

Dr Venkatesh also shares with us some of the most important milestones that the company has made as of July 7.

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This article was produced in partnership with Brinc for Asia’s Alternative Protein Showcase. Asia’s Alternative Protein Showcase brings together the region’s alternative protein ecosystem of startups, professionals, and investors to share their latest innovations and developments, while also inspiring one another, driving further growth and adoption.

Image Credit: inspirestock, 123RF Free Images

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Animoca Brands, a leading digital entertainment, blockchain and gamification company based in Hong Kong, has completed a capital raise of US$75.32 million.

This is the second tranche of the US$359 million funding round led by Liberty City Ventures announced on 18 January 2022.

Investors in the current tranche included Liberty City Ventures, Kingsway Capital, Alpha Wave Ventures, 10T, SG Spring Limited Partnership Fund, Generation Highway Ltd, and Cosmic Summit Investments Limited.

Animoca Brands will use the fresh infusion to continue to fund strategic acquisitions, investments, and product development, secure licenses for popular intellectual properties, and advance the open metaverse, including through its efforts to promote digital property rights for online users.

Animoca Brands is working to advance digital property rights and contribute to the establishment of the open metaverse. The company develops and publishes a broad portfolio of products, including the REVV token and SAND token; original games including The Sandbox, Crazy Kings, and Crazy Defense Heroes; and products utilising popular IPs including Disney, WWE, Snoop Dogg, The Walking Dead, Power Rangers, MotoGP, and Formula E.

Also Read: Web3 is going to redefine labour in Asia in a big way: Animoca Brands’s Yat Siu

Using technologies including blockchain and NFTs, Animoca Brands is working to deliver true digital ownership of users’ virtual assets and data, enabling various DeFi and GameFi opportunities (including play-and-earn), asset interoperability, and an open framework that can lead to greater equitability for all participants in the open metaverse.

It has multiple subsidiaries, including The Sandbox, Blowfish Studios, Quidd, GAMEE, nWay, Pixowl, Forj, Lympo, Grease Monkey Games, Eden Games, Darewise Entertainment, Notre Game, and TinyTap. Animoca Brands has a growing portfolio of more than 340 investments, including Colossal, Axie Infinity, OpenSea, Dapper Labs (NBA Top Shot), Yield Guild Games, Harmony, Alien Worlds, and Star Atlas.

In 2021, Animoca Brands raised US$216.28 million to power its vision of digital property rights and the open metaverse, while its subsidiary The Sandbox completed a capital raise of US$93 million.

Yat Siu, Co-Founder and Executive Chairman of Animoca Brands, said: “Digital property rights represent a society-defining generational shift that impacts everyone online and will set the stage for the emergence of the open metaverse.”

Emil Woods, managing partner of Liberty City Ventures, commented: “Over the next decade, humanity will discover and embrace the game-changing power that blockchain-based digital ownership of assets will bring to countless aspects of daily life.”

The global video game market was estimated to generate US$180.3 billion in 2021 (source: NewZoo), while the metaverse market size is expected to grow to around US$829 billion by 2028 (source: Emergen Research).

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Asia is home to nearly half of the world’s population with cancer, with 9.5 million new cancer cases and 5.8 million cancer deaths reported in 2020. This can be traced to population growth, ageing population, and lifestyle or socioeconomic changes.

With a burden estimated to double by 2040 to 30.2 million cancer cases,  swift prevention, detection, treatment and supportive care programmes are critical to saving lives.

Pathologists from the core of cancer care delivery for cancer detection and treatment and oncologists (doctors who treat cancer). Pathologists are specialists who examine diseased cells and tissues for the presence of cancer (i.e. malignancy) and help decide the further course of treatment. The pathologist’s investigation impacts nearly 70 per cent of clinical decisions.

Challenges in pathology

The rising cancer trend and the backlog of cases due to the COVID-19 pandemic have brought the need for trained pathologists to the fore. With advancements in R&D, more effective pathology tests are now available for cancer detection and evaluation.

However, their application requires an experienced workforce. Insufficient inputs can cause delays in cancer diagnosis, consequently impacting patients’ treatment and survival.

Key challenges in this sector include an overall shortage of pathologists, a lack of a trained workforce (it can take up to 15 years to train pathologists) and increasing complexity of analysis, all of which need to be addressed to ensure the quality of cancer detection and staging remains uncompromised.

Under these circumstances, pathologists continue to face tremendous pressure and concerns, such as the possibility of burnout.

Digital pathology facilitates remote diagnosis

Depending on the tissue being analysed, a pathologist performs tests and typically views the tissue on a glass slide under a microscope to arrive at disease-specific scores or diagnosis.

Digital pathology, in simple terms, allows scanning of the slides or whole slide imaging (WSI) so they can be viewed on a computer monitor. Thus, high-resolution images can be conveniently viewed from remote sites without travelling and can even be shared to facilitate consultation with other specialists.

Also Read: MedHyve raises pre-seed round to make medical procurement easy for small hospitals

While the COVID-19 pandemic accelerated digitalisation in several other sectors, its use in pathology is still nascent.

As digital adoption accelerates, the digital pathology landscape in Asia will continue to evolve. By 2027, it is estimated to reach US$125 million from US$74 million this year.

Integrating AI into pathology

AI involves computers that mimic the processes of learning and interpretation by the human mind. AI-integrated digital pathology can help streamline workflow, enhance efficiency, and improve diagnostic concordance.

On the one hand, it can help automate several complex tasks. For example, computer-based analysis of the digitised tissue images can assist with time-consuming yet essential diagnostic tasks (e.g. counting the total nuclei or classifying tumour tissue), easing the overall workload of pathologists.

Conversely, AI integration enables the system to ‘learn’ image analysis per pre-established parameters, thereby supporting the pathologist’s diagnostic acumen. For example, AI has shown to be capable of assessing features indicative of high-risk colorectal cancer from tissue images.

AI-based digital imaging analysis also helped detect metastatic areas (cancer which has spread to other organs). It showed great sensitivity in scoring certain markers that predict survival in breast cancer.

Hence, it can be used as an effective screening tool for detecting malignancy and metastases and evaluating prognosis. These assistive technologies help improve efficiency, freeing up pathologists’ time for other important tasks requiring specialised input.

When associated with pathology, deep learning (a more complex subtype of AI) can assist with diagnostic evaluation (e.g. differentiating between diseased and normal tissue, grading cancer or distinguishing cancer types) and offer deeper disease insights.

This includes predicting the status of gene mutation, outcomes and disease recurrence. The synergy of human and AI-based insights in cancer pathology no doubt opens avenues for early cancer detection, with the potential to offer patient-specific disease assessment and treatment. Ultimately, this inflicts less strain on the healthcare system and enhances patient care.

Future perspectives

Lastly, managing pathologists’ perceptions of AI and enhancing their adoption is critical to aiding this transformation. Educating and supporting pathologists using such cutting-edge technology can help alleviate pressure on the system and manage the rising disease burden.

AI-integrated digital pathology can thus work in synergy with the pathologist to deliver optimal patient-centric care, right from detection to the treatment of cancer.

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Indonesia-based manufacturing hub startup Imajin raised pre-seed funding from Init-6 for an undisclosed amount. This funding will be used to accelerate digitalisation in the manufacturing industry through market expansion and new product development.

In a discussion with DailySocial, Imajin Co-founder & CEO Chendy Jaya said that Init-6 is currently the sole investor for this round. However, the Global Fund is said to participate in this funding.

In Indonesia, Imajin plans to expand to several cities in Java and Riau Islands province. In addition to that, the company is strongly considering an expansion to Japan. After his recent visit to Japan, he implied gaining a positive response from the local companies.

“I think we’ll need representatives in the country, in order to onboard [prospective customers] to Imajin,” he added.

Imajin is a platform that bridges demand and supply in the manufacturing industry. By positioning itself as a manufacturing hub, Imajin offers three business models: (1) a platform to gather business players in the manufacturing industry, (2) project financing, and (3) a marketplace to supply raw materials.

Also Read: Startup Studio Indonesia names the 15 startups shortlisted into its third batch

Throughout the first semester of 2022, he continued, Imajin has recorded an Annual Recurring Revenue (ARR) contract of almost ten times growth compared to two years ago. The company has just started its expansion to East Java and released an AI-based Quick Note feature to detect 3D files and instantly determine the price range of the goods.

On his LinkedIn page, Init-6 Venture Partner Rexi Christopher believes that Imajin will have a significant role to play in revolutionising the manufacturing industry in Indonesia. Moreover, 20 per cent of Indonesia’s total GDP is projected to come from manufacturing. Its growth is also predicted to be faster due to the adoption of new technologies.

In addition, he believed that Imajin is backed by know-how founders in this sector. “We believe that Imajin can accelerate digitalisation in manufacturing so as to make its industry in Indonesia more competitive in the global market,” he said.

In fact, Init-6 was founded by Bukalapak Co-Founders Achmad Zaky and Nugroho Herucahyono with a focus on investing in early-stage startups. Recently, Init-6 channelled funding to edutech platform Dibimbing.

Manufacturing digitalisation

On a separate occasion, Imajin said that it works closely with the Sole Agents of Brand Holders (ATPM) in the automotive and other sectors and cooperates with the Ministry of Industry to accelerate the digitalisation of manufacturing in the country.

Also Read: Growthwell Foods raises US$22M Series A to manufacture plant-based meat, seafood for F&B businesses

In its efforts to enter the Japanese market, Chendy said that the automotive industry in Indonesia has great potential. Moreover, some high technology for automotive products such as servo-brakes, gearboxes, and drive-axles, are still imported from Japan. According to a report by the Indonesian Embassy in Tokyo with Mizuho Bank, the import value reached US$1 billion.

Meanwhile, the Indonesian government is aggressively encouraging domestic digitalisation in order to meet the regulation of the Domestic Content Level (TKDN) of at least 35 per cent and increase to 80 per cent in 2026, especially in electric vehicles.

“We found a classic problem that often occurs in the manufacturing sector, which is finding trusted vendors. We want to digitise the procurement process to production, therefore, the Indonesian market can compete with other countries,” he said.

Currently, Imagin has more than 400 local manufacturing partners and 80 customers including Japanese companies in Indonesia. Imajin strives to provide dozens of customers from leading companies, such as Tom’s Racing, Toyota Motor Corporation, Mitsubishi Motor Corporation, so that they comply with product standards owned in Japan.

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The article was written by Corry Anestia for DailySocial.

Image Credit: Imajin

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Indonesia-based proptech startup Tanakuhas secured US$5.5 million in a pre-seed funding round led by East Ventures. 

The round included equity and debt capital from an international bank. 

The fresh capital will be used to build the product, expand the team, acquire homes, and execute the go-to-market strategy.

Tanaku was founded by Jonathan Ma (CEO), Andries De Vos (Head of Product), Bhanu Prakash (Head of Marketing) and Alwin Hajaning (Head of Commercial).

Headquartered in Jakarta, Tanaku aims to build a ‘pre-mortgage solution’ for owning a home. It builds an end-to-end technology platform to facilitate the purchase and transaction of homes entirely online.

Also Read: Indonesian proptech startup Jendela360 secures US$1M led by Beenext

Prospective home buyers can get pre-qualified with Tanaku at much simpler terms than a traditional bank, pay just 2 per cent of the down payment (DP) for their home and move in immediately. 

They can then focus on building their remaining DP with monthly instalments and decide to either upgrade their house with Tanaku.

In the initial rollout, prospective home buyers can select the home from Tanaku’s curated list of properties. In the future, it will facilitate the purchase of any homes in the open market with partner agents across multiple cities in Indonesia.

Since 2000, homeownership has declined in Indonesia by 2 per cent each year, and 70 million millennials are the most impacted segment, with 70 per cent unable to afford their own home.

The problem stems from how the home needs to be purchased. Many millennials do not have large funds saved for the initial down payment, and banks reject the majority when applying for a mortgage. 

Property developers often offer instalment plans called ‘cicilan’, but they come with expensive hidden fees, high-interest rates and predatory terms. This leaves millennials frustrated and resorting to long-term rentals, causing a steady decline in home ownership.

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This article is published as a part of a partnership with Recruitery. Recruitery is an all-in-one hiring platform that provides headhunt, payroll, taxes, and compliance solutions for remote teams in SEA.

Although the COVID-19 pandemic has been controlled, an economic downturn is still heralded due to the disruption of global supply chains and soaring inflation.

Across Southeast Asia, micro, small and medium-sized enterprises (MSMEs) have suffered massive losses in income and capital due to COVID-19. Small businesses also face new challenges, such as higher business costs, growing debt, and operational uncertainties that require structural reform to improve the local business environment.

If you’re running an enterprise, you better find ways to align your overall strategy and business model. For many company leaders, this presents a significant challenge. For example, how to deal with a recession?

After experiencing two terrible waves of the pandemic in Vietnam and achieving specific achievements, we have some practical advice below which can help small businesses better prepare for a recession:

Make decisions carefully

While you will likely need to adjust your business shortly, don’t make decisions irrationally or quickly just to make them. 

Seek the advice of boards, advisors, mentors, and others who have experienced economic uncertainty. Then, combine your complex data with realistically honest trend forecasts.

Don’t be paralysed by analysis or consensus group thinking. Instead, get your data, input from the leadership team, advice from a mentor or mentor, and then make a decision.

In 2020, our company had some problems because we were almost paralysed and did nothing. However, by making careful decisions by 2021 and this year, we can confidently state that, before any of our choices are made, we have considered them very carefully.

Pay attention to even the slightest problems

As you consider your business strategy, business model, and revenue forecast, it’s necessary to make small decisions because if you wait and assume things will be better in the future and just wait, you may be unprepared or unable to weather a recession.

Also Read: Why Southeast Asia’s locally owned adtech and martech industry will survive the recession

We have a tip: look at your business model and move people and resources into areas that will generate or protect revenue. For example, it is possible to cut spending on advertising media and use services like retargeting, email marketing, or better social media efforts soon.

Cost control

This is crucial regardless of whether you are a large or small business. You must control your costs in the best way.

For founders to make a profit first, they need to widen their runway and make the money they raise go further, especially during an economic downturn.

If you’re in a large company, you’ll receive an email, if you haven’t already, to manage your area, division, and division expenses for the rest of the year.

Cash management

Perhaps not much need to be said about the necessity of cash management. This is the “blood” of every business.

Manage your cash, whether it is through more aggressive efforts in accounts receivable, negotiating payment schedules with vendors in your accounts payable, or keeping staff expenses in line with stagnant wages and few hiring.

All are important right now as your primary goal should be to generate strong cash flow in the business.

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Intellect, a Singapore-headquartered mental health startup, has raised an additional US$10 million in a Series A extension led by Tiger Global.

K3 Ventures, JAFCO Asia, Singtel Innov8, and PERSOL Holdings, with participation from existing investors Insignia Ventures Partners, and HOF Capital, also joined the round.

This brings Intellect’s total Series A capital raise to US$20 million. Early this year, the mental health startup secured US$10 million in a Series A financing round led by US-based HOF Capital.

The fresh injection will be used to scale the startup’s commercial expansion plans and teams across Asia. The business is focused on building the region’s first digitally-enabled, fully-stacked mental healthcare system.

Intellect is a modern-day mental health company aiming to make mental healthcare and wellbeing support accessible for everyone. Launched two years ago, it claims to serve more than three million lives in over 60 countries through its therapists and coaches based in 20 countries, providing localised coverage and self-guided programmes in 15 languages.

Also read: How to tackle employee mental health to build a resilient workforce

The company currently works with various international enterprises such as Merck, Philips, foodpanda, Singtel, Shopee, Omnicom Media Group, and abrdn.

In August 2021, the firm announced the closing of its US2.2 million pre-Series A round led by Insignia Ventures Partners, alongside new investors Y Combinator and XA Network.

Theodoric Chew, Co-Founder and CEO, said: “Intellect’s mission is to normalise mental health and shift the culture towards more open conversations about personal wellbeing, ultimately removing the stigma attached. We are fortunate that Intellect is able not just to defend but heavily double down on our work to change how mental health care is done for all of Asia Pacific.”

As the current workforce struggles with burnout and adopting unhealthy coping mechanisms, focusing on mental health in the workplace is more important than ever. A 2021 APAC workplace health study by Intellect showed that 84 per cent of APAC respondents reported high levels of exhaustion, while 88% said they were disengaged from work.

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In this episode, we are excited to welcome Frédéric Mazzella, Founder, Chairman and Former CEO of BlaBlaCar, the world’s largest carpooling platform. Mazzella is also an active investor, startup board member and Co-President Entrepreneur of France Digitale.

In our conversation, Mazzella speaks to us about how to think big but act small at the beginning of global expansion initiatives, how to create a business name with global appeal, building a community of trust within an organisation, successful strategies like how to “build for two markets,” and how to hire a talented, internationally-minded local team who connect with your company culture and how to listen to them and leverage their local market expertise.

Also Read: Vietnam can be an excellent launchpad for regional, global startups: says Eddie Thai

This episode is sponsored by our partner ZEDRA. Learn more about how the ZEDRA team can support you in expanding to new markets here.

Find our entire podcast episode library here and learn more about our forthcoming book on global business growth here.

Interested in learning more about our book Global Class? Be the first to get a copy (coming out August 23), and get a ton of valuable free bonuses for pre-ordering. Learn more here.

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The article was first published by Global Class.

Image Credit: Global Class

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Consumers eagerly anticipating a long-awaited vacation are set to encounter something of a frenzied return to the tourism scene. As chaotic images at airports and stories of lost baggage hit global headlines, the travel sector is looking at a less than smooth ride to normalcy. Yet beyond the headlines, there is another threat that’s quietly undermining the travel industry: ad fraud.

It is more than two years since the COVID-19 pandemic brought the world to an abrupt standstill, putting a lengthy halt on leisure travel and vacations. Now, however, all signs point to an incredible rise in Asia Pacific travellers this year.

One report estimates that APAC’s travel and tourism sector is expected to approach pre-pandemic levels while another estimates that the ASEAN region will receive an estimated 155 million tourists in 2022.

Meanwhile, an estimated 430 million more passengers are predicted to fly in Asia-Pacific compared to last year as leisure and business trips return to pre-pandemic levels.

Naturally, these numbers should give business leaders in APAC’s travel industry a cause for optimism. However, travel’s resurgence should be a wake-up call for travel leaders to ensure they are safeguarding their marketing efforts.

The travel industry remains one of the most adversely affected by ad fraud than other sectors. According to our research, bots make up to 80 per cent of all invalid traffic for travel advertisers, a stark contrast to the 15-to-30 per cent effect on other industries.

Also Read: Business travel in the new normal: Strategies and tools for SME travel programme

For the uninitiated, ad fraud is when bots, click farms, ad stacking and other illegitimate tactics are utilised to sabotage a brand’s advertising efforts through invalid traffic. When a campaign is plagued by fraudulent activity, the advertiser and agency receive no return on investment and no valid metrics with which to measure their real results.

Since the explosion of digital advertising, notably display ads, fraud has posed a never-ending headache for marketers and their agencies. Already pressured following the two-year global lockdown, the travel and hospitality industries are among the most vulnerable to ad fraud.

Travel advertisers saw an 82 per cent higher brand suitability violation rate than the average rate across other verticals. In the Asia Pacific, the violation rate was up 52 per cent. Display viewable rates in APAC were 11 per cent lower for travel advertisers as compared with other industries, and video viewable rates were 15 per cent lower.

The reason travel is so vulnerable to this type of fraud is partly due to the proliferation of third-party online travel agencies (OTAs), some of which are authorised and some that are not. These OTAs function by scraping the data of airline and hotel databases and then selling them on behalf of airlines and rentals.

As airline websites and travel apps are home to a host of data such as flight and pricing, they are prime targets for bot activity. Unauthorised OTAs deploy bots to scrape flight information and fares, then hold seats to resell them later. This makes it appear as though far more people are viewing than booking flights, thus skewing airlines’ attribution data.

In addition, the travel industry also has many high-value loyalty programmes, such as frequent flyer points and hotel chain credits, and these pose an alluring target for fraudsters to assume control of. 

Moreover, in an increasingly digitised world, travel vendors are turning to apps and mobile experiences to ease the travel journey and reach their target customers. But, by trying to drive installations of their apps, travel brands are more susceptible to receiving bad quality traffic and misattribution.

According to our analysis, performance networks that are being paid to drive these installations are delivering upwards of 30 per cent invalid traffic on average. This results in many fraudulent installations and misattribution of post-install events such as flight and hotel bookings.

Also Read: How can influencer marketing help the travel industry in a post-pandemic world

This is a grim picture for travel marketers in the Asia Pacific as many markets here are particularly susceptible to high rates of ad fraud. A recent study revealed that Singapore has one of the highest fraud rates worldwide, followed by Vietnam, as other regional markets reported above-average volumes.

Taking ownership

If unresolved, ad fraud essentially remains a leaky bucket within a travel marketer’s budget. Not only are countless advertising dollars lost every day to ad fraud, but advertisers are left vulnerable to low latency and even malware from the onslaught of bad bots.

Resolving the problem requires third-party verification tools and ad fraud detection technology. Marketers and advertisers need to start adopting this technology at scale to stop the proliferation of fraudulent traffic.

For the travel industry, ad fraud technology should be regarded as a core protection tool and should be added to other cyber security measures. This kind of adoption requires a cultural change from the top-down.

Chief marketing officers, therefore, need to take ownership of this by advising their peers on which ad fraud technology they use, how they use it, and how it will impact their business.

Once ad fraud detection tools are seen as a vital part of a business’ marketing and technology stack, then the travel industry can finally solve the problem together.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

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