First there was Didi Chuxing, now there is Snow. Never heard of them? They are just two of the Asian developed and headquartered mobile apps that are challenging the received wisdom that US based online services will dominate the global scene.
(Mainland China is so far the honorable exception, proving censorship can beat any digital company, and note that Facebook especially is on a long-term campaign to have its block by the Great Firewall lifted).
It is here, in what we like to think of as our backyard, that exists an opportunity for smart Australian software developers.
The evidence is that Asian-developed applications – as Chinese ride sharing group Didi Chuxing has comprehensively proven – prove there is no substitute for deep local knowledge, language skills and cultural understanding that a native can bring to the existing model.
The company, itself a merger between China’s two biggest ride hailing services, comprehensively out-booked Uber in the accelerating and lucrative Chinese market via this very local savvy and smart consolidation.
Last August Uber capitulated, spending $1 billion and a 17 per cent stake in the company, but not until it after spending countless more money battling the locals on their home turf.
Like Facebook, Twitter, Instagram and many other globally pervasive US apps, Snapchat is blocked in China, leaving the world’s largest internet and mobiles market wide open. Chinese digital conglomerate Tencent, owner of messaging giant WeChat has Pitu, a runner in the race to be Asia’s Snapchat, and the country’s groundbreaking messaging service QQ which has 870 million users, has added Snapchatty features, on paper dwarfing Snapchat but in reality a multi-purpose application playing catch up.
Imitation remains the greatest form of flattery, no matter what the platform, and Facebook’s latest “innovations” that mimic Snapchat. (Google’s social media lift from Facebook
“hangouts” is further testimony, and that list is endless)
Right now Snow, a South Korea application is making all the headlines as the emerging Asian rival to Snapchat is leveraging what reviewers say is a far greater range of features than its US rival.
That Snow should come from South Korea should really be no surprise.
It is the latest piece of what is now referred to as the Korean Wave, a trend that began in the 1990s and has been gathering pace ever since where Korean popular culture has swept its influence across movies, TV shows and music through all of North and Southeast Asia – including China.
Snow is controlled by the Naver Group, whose biggest hit to date has been Japan-based messaging application LINE which raised US$1 billion in joint US-Tokyo listing last July.
LINE is also the default social media application in Thailand and increasing popular in other parts of Southeast Asia.
Facebook made a play for Naver last year. That bid’s failure has lead Facebook, as noted, to add Snapchat features recently. LINE has bolstered Snow’s balance sheet recently with a chunky US$45 million investment.
Naturally, such successes attract capital, increasing their ability innovate and grow, the basic requirements for stretching market leadership.
For Australian companies to be even in this game, they must from the get-go “think Asian”. While of course every country in Asia is different, there are also plenty of broad similarities in culture and taste.
Australia is fortunate to have a very healthy overseas student population, over 500,000 on the latest government figures. Many of these are keen to stay and work in the medium to long term and it’s a cornucopia of language skills and cultural insights that can be leveraged by smart operators.
There are also some stand out opportunities in untapped vertical markets. Australia’s biggest neighbour Indonesia is a huge opportunity for application developers.
It is articulate in FinTech – with tens of millions of ‘unbanked’ and uninsured people – and there are e-commerce opportunities aplenty in an archipelago nation where infrastructure is wanting.
The same opportunity same opportunities exist across more of the 600 million plus ASEAN and further afield into India and other parts of even more heavily populated South Asian. Oft forgotten Bangladesh, has a population of 180 milliom.
Capital in the technology sector is increasingly mobile and Australia is at last attracting a steady and significant flow of venture capital; like more traditional investment capital where countries like Singapore Thailand and Malaysia rank in the top 10, this will increasingly come from Asia.
But to crack a model, or market gap, like Snow or the Singapore-based Grab Taxi, which is giving Uber a shake in much of Southeast Asia the way Didi Chuxing did in China, there is no substitute for being there.
Brave and savvy Australian companies are already planting a flag in Jakarta, Singapore or Manila as disruption accelerates throughout the region.
The timid, insular thinkers will be left behind, with no chance for a crack at the big time, waiting for their lunch ready to be gobbled up by Asian rivals.