Techblog
Lessons from three successful Asian start-ups
Luxola, KakaoTalk and Tokopedia are three examples of Asian start-ups who have gone through the challenges of initial growth and made it big. Here are the lessons their success offers aspiring businesses of today.
Entrepreneurship and start-up culture is growing rapidly in Singapore and the Asia Pacific region. The digital era has fueled staggering growth in the region’s technology sector and recent years have seen many promising start-ups emerge. Within their success stories are valuable lessons for SMEs to take note of.
Gaining international presence: Luxola (Singapore)
Launched in Singapore in 2011, this online beauty empire now has a presence in 10 countries, including Australia, India and the UAE. When asked about its strategies for expansion into new markets, Luxola’s chief marketing officer, Adrien Barthel, stressed that it is absolutely crucial to understand both who your customers are and how customer behaviors vary in different countries.
For example, before expanding into Jakarta, Barthel realised that customers in Indonesia and Singapore use Luxola for very different reasons. In Indonesia, Luxola is all about convenience, as this is a country where public transportation is notoriously difficult. In Singapore, it’s used to discover new trends and products.
Learning points: Investing time and effort into understanding who your customer base is can take a business far. The valuable insights gained from this will influence, for example, which marketing channels should be used to reach out to target audiences and how best to communicate with them.
Achieving market presence locally: KakaoTalk (South Korea)
KakaoTalk, Korea’s dominant mobile messaging app, has enjoyed unparalleled user growth and has gained popularity over other more common messaging services such as WhatsApp. Six months after its launch, KakaoTalk had already recorded one million users. Today, KakaoTalk is used by more than 90 million people worldwide.
The key to KakaoTalk’s success was to diversify. Starting out as a free chatting app, it then sold stickers and emoticons to users and introduced in-app games. KakaoTalk also developed partnerships with other brands to earn more through advertising and began branching out into commerce. Today, KakaoTalk has gone public – a major achievement for a company that started out as a simple chat service.
Learning points: If a business is growing steadily, there might be potential to further increase its market share by offering other products and services that can also cater to target audiences. SMEs can add value to their customer base by diversifying their offerings and enhancing the user experience with their existing products.
Securing funding successfully: Tokopedia (Indonesia)
Arguably one of the most popular consumer-to-consumer marketplaces in Indonesia, this homegrown e-commerce start-up set the record in 2014 for securing the largest venture capitalist investment that an Indonesian tech company has ever received – a staggering US$100 million (Rp1.2 trillion).
Following an initial round of seed funding from PT Indonusa Dwitama in 2009 (after gaining traction by supporting merchants on their platform who were part of an internet movement), Tokopedia founder and CEO William Tanuwijaya expanded his network and gained exposure to China, Japan and South Korea with the help of several Japanese investors.
Tanuwijaya, who could not speak English very well at first, credits constant learning as a key part of the Tokopedia culture, which helped him to successfully raise funds yearly from 2009 to 2014. He also positioned the company similarly to that of e-commerce giant Taobao during its early years in China, which gave locals the chance to start their own online businesses at very little cost and almost no risk. This helped to encourage entrepreneurship amongst the Indonesian public.
Tokopedia is now backed by investment giants Sequoia Capital and SoftBank, companies that Tanuwijaya have acknowledged are the perfect fit to help improve his knowledge in technological innovation in the US and business innovation in China and India.
Learning points: Setting a precedent locally doesn’t preclude learning from and being inspired by success stories in and around the region. Businesses that are persistent with clear goals in mind – and know how to execute them – will give investors the confidence to provide them with financial backing.
Whether a business is aiming to market a new product or expand internationally, learning from examples in today’s market will be instrumental for newer companies experiencing the first stages of start-up growth.