The first Techcrunch meet up in Singapore, hosted at Google APAC HQ and put together by Techcruch's Jon Rusell and Seedplus team.
This is a short article, with 3 take aways from these two gents:
Among the many ways for user acquisition, the 5 ways to acquire and incentivise new users were:
- TV Ads
- Pay Per Click Ads
- Loyalty (Shipping) Discount
- Acquire one user/seller at a time [which is one of the real take away]
Discounts are no free lunches as there will be someone who will have to pay to subsidize these discounts.
The other side of discounts is that it does not automatically lead to customer retention. Once a user is acquired via a discount strategy, more discounts have been to be provided to encourage the same user to come back again. For early stage companies, discounts are expensive, inefficient and unsustainable.
TV Ads are plainly expensive for early stage companies, but become ROI-friendly for established companies seeking to consolidate their brand awareness and brand equity.
Pay Per Clicks Ads are a good way to acquire users provided the right strategies are employed. Also known as PPC, this type of digital marketing require a combination of copywriting, data analysis, psychology, behavioural science and market data. Early stage companies should be able to roll out low-cost effective PPC campaigns depending on their niche...
Loyalty (Shipping) Discount comes in two flavours in our opinion.
Firstly, it rewards those are willing to spend more per shopping basket with free shipping. Eventually, someone will end up subsidizing the shipping fee here too!
Secondly, it opens up the opportunity of creating a loyalty programme to retain customers through a customer relationship management strategy. Hereby, it is simply (yet complex) unit economics of the customer/user lifescyle which is to be managed.
Finally, acquire one seller at a time is a rigorous, time consuming and rather expensive strategy depending on the nature of the business. In this case, we wish to highlight that it is Shopee's apparent approach to seller acquisition. The Shopee staff would go to towns and villages outside of Jakarta to acquire one seller at a time. This is a fantastic approach as it helps to build trust as early as possible in the old fashion way before transition is made to the online marketplace.
What is one common factor between China, Taiwan and Southeast Asia?
Hokkien people and to some extent, Hakka people too.
These ethnic groups have built a strong business community in the region. Note: Many other non-Chinese communities have started amazing business too! This cultural and historical link connects the Southeast Asia together with Greater China (China, Hong Kong and Taiwan) when it comes to doing business, even more with the growth of internet.
In Shopee case, we understood that eSports and gaming were the primary drivers of Garena / Sea's expansion into the region. Subsequently, the Sea Group has leveraged on its pre-existing presence and maturing Taiwanese society to grow Shopee into an e-commerce powerhouse within a few years, offering Taiwanese sellers access to the Southeast Asian market.
Become a category leader. Period.
Razer is known for its gaming hardware ranging from keyboard, mouse, laptops among others. It is also has a gaming smartphone too for the avid mobile gamers. Razer is a daring company which has a built a globaly brand, almost cult-like. They invest in M&A and product innovation to enter new categories which they always aim to take the leadership position as quickly as possible.
Today, it is pretty hard to start an online marketplace in Southeast Asia without deep pockets. Alibaba chose to invest in Lazada and Tokopedia rather than build its own. This leaves us with the idea that building a niche / vertical business is a good way to start in the region, and that it could possibly be the fastest route to attain market leadership.
Overall, the Techcrunch meetup, first of its kind, was a pleasant event. It was good to hear from two tech business leaders whose companies recently went public (all in 2017), and hopefully, there will be most IPOs or major exits from Singapore based technology companies.