There’s a common thread running through the likes of HappyFresh Malaysia (e-commerce: grocery shopping and delivery app), Be Malas (e-concierge), the Lorry (transportation and e-commerce), CatchThatBus (transportation and e-commerce), and Kaodim (e-concierge). They each belong to the marketplace industry, connecting buyers and sellers of a specific product or service.
Echelon Malaysia 2015 brought together senior executives (all Co-founders sans one) from each of these companies for the first of five panel discussions, titled, “The rise of service platforms and marketplaces in Malaysia.”
The panel discussions added to the slate of keynote addresses and fireside chats amongst other initiatives for stakeholders in the entrepreneurship and startup ecosystem to interact during the one-day event.
Moderated by Dmitry Alimov, Managing Partner at Frontier Ventures, the panel covered topics such as trends in the marketplace industry, the appeal of mobile apps and mobile web platforms for a business, and differences in consumer behaviour in certain Southeast Asian markets.
The panel, in general, agreed that the demand for marketplace services was growing, especially in the Asian environment they are located within.
“Asians generally work long hours and spend very little time getting errands done. I think that’s why the platform of marketplace [services] is actually thriving in this part of the world,” said Adlin Yusman, CEO of Be Malas.
Industries primed for disruption
Alimov’s question about specific industries primed for disruption by marketplace services led the panel to suggest personal insurance and real estate.
“Personal insurance…is probably one of the areas where there’s a lot of inefficiencies and lack of transparency, very much also because of the inherent complexity in [financial] products. I have no idea how […] to get around the whole regulatory system (governing insurance sales), but I think it’s definitely […] ripe for disruption,” said Choong Fui-Yu, CEO of Kaodim.
The theme of transparency that marketplace services can offer was also one that Opal Wu, Managing Director of HappyFresh Malaysia, visited.
Wu, who identified the real estate industry as one that startups are increasingly targeting, said, “Having the feedback loop, being able to see reviews and ratings by other people, is where the customer can get a lot of value, especially when selecting a particular agent or service provider [amongst whom] the quality can be highly variable in Malaysia.”
Web app, mobile web and mobile app?
Operating a marketplace requires a platform through which customers can solicit and obtain a service. This often means companies have to decide on investing resources into an appropriate platform, whether a website, web app, mobile website or mobile app.
The panel was split on this issue, with emphasis placed on different platforms depending on their business needs.
“We don’t really see repeat users because most of our customers are people moving house or moving office (and they don’t usually need to move again very soon), that’s why we’re not building a mobile app yet,” said Goh Chee Hau, Commercial Director of the Lorry, which currently operates through a web app.
Choong, however, has found both the mobile web and mobile app platforms useful for Kaodim, which helps users find, compare, and hire professional services ranging from movers and wedding planners to personal trainers and photographers.
“From the perspective of local services, we found web to be a huge driver for our business, simply because when you’re looking for a service provider, you gravitate to Google search to look for a plumber around your area. You don’t go into the app store to look for plumbers,” said Choong.
“Now, I think the mobile app also plays a role in terms of [user] engagement, repeat use rate…and it forms a dashboard that will eventually, as we open up more services, become that ‘home’ for the user,” he added.
On the topic of customer acquisition, both Ashwin Jeyapalasingam, COO of CatchThatBus, and Wu agreed that it was easier through mobile web than mobile apps. Jeyapalasingam, however, noted that market differences could also spell different results.
“In Singapore, we found that more people are coming on the app straightaway. So that’s slightly different from Malaysia. It might differ from market to market. And, also, of course, it depends on your business,” said Jeyapalasingam.
Also Read: 5 basic steps for building a mobile app
Noting that the companies of the various panellists each started in Malaysia and have since expanded to various extents within the Southeast Asian region, Alimov sought their insights on the customer differences they have had to deal with.
With the proximity of Singapore to Malaysia, comparison of the two markets was unavoidable.
“In Singapore, it’s much easier to set up, incorporate, get running and get some traction. But…people are more critical and more demanding. You have to have a faster turnaround. Malaysians are quite reasonable to deal with I would say in comparison,” said Jeyapalasingam to laughs from the approximately 400-strong audience.
While concurring with Jeyapalasingam, Choong also added, “Unsurprisingly, the education that is needed in order for you to get your product out to the market and get people to use it is a whole lot less compared to Malaysia.”
Wu, speaking from HappyFresh’s experiences in the Malaysian and Indonesian markets, had a lesson to share.
“You cannot treat Southeast Asia as one homogeneous region. You need to have a very good local understanding of each market [and] treat each market almost as a separate test of your product,” said Wu.
Ending the 45-minute panel discussion, Alimov posed a few questions from the audience to the panel. One of them was about how the Malaysian technology ecosystem afforded significant advantage, if any, over those in other countries in terms of scaling.
With a population of nearly 30 million spread over 13 states and three federal territories, Jeyapalasingam said, “Malaysia is quite a fertile area for you to grow your idea, test it out, and refine it before taking it out to [other] market[s]. It’s much bigger than Singapore if you’re talking in terms of size of market.”
Malaysian governmental support
Geography and demographics are not the only factors friendly to the startup ecosystem in Malaysia, however, as audience members heard in a second panel discussion titled, “Government Agencies Catalysing Growth In Malaysia’s Tech Ecosystem.”
The Malaysian government, it seems, is also making efforts to understand the needs of the technology and startup ecosystem.
“I [would] also like to mention that, over the course of the last few years, the human capital within the government organisations has also evolved to reflect the need of the community,” said Naser Jaafar, COO of Agensi Innovasi Malaysia (AIM), a Malaysian statutory board set up in 2010 to foster innovation and produce entrepreneurs who will stimulate economic growth in the country.
According to Jaafar, “There are other government agencies for which the top management are of the private sector. So we understand what drives the private sector, the business, the startups. So from a human capital perspective, we’re seeing that evolution already.”
Explaining AIM’s role within the ecosystem, Jaafar said, “At least from AIM’s perspective, we don’t call ourselves an agency that gives grants although we do. We position ourselves and the programmes that we do – to facilitate, to assist from ideation all the way to commercialisation. And, along the way, should there be a need for funding, we will put that to make it happen. But we’re not there just to give money.”
Cheryl Yeoh, a former startup co-founder who spent 12 years in the US before returning to Malaysia to head the Malaysian Global Innovation and Creativity Centre (MaGIC) as CEO, was also on the same panel.