From the WIT desk: The next billion users

 

During the WIT conference last month, one clear message hit home – how tech and travel brands in the West were now looking toward Asia for inspiration and ideas, not just growth and profits.

Imagine that.

For decades, it was hard to persuade companies in the West to even look our way – some did not even know specifically where or how the 4.4 billion of us lived.

In his just-published book Flying High, the group CEO of AirAsia, Tony Fernandes, relating his boarding school years at Epsom College, wrote of why he wasn’t invited to parties.

It wasn’t because of his skin color, it was because his classmates thought he didn’t know to use a knife and fork because they thought he lived in a treehouse or something.

Today, not only are billions of people using chopsticks but they now are looking to how travel and tech companies in Asia are innovating around mobile devices and the next generation of consumers.

Asia, it appears, offers a peek into what a software-led and mobile-only world could look like.

In his presentation “Asia is eating the world,” Filip Filipov, vice president, product management for Skyscanner, spoke of how if software is eating the world, then Asia is leading the way in software innovation – around chats, messaging, facial recognition (AirAsia China being the first to use facial recognition for check-in), payments and even the humble QR code is making its way back into fashion.

His company of course having been acquired by Ctrip has found its deliverance and future in Asia, and its latest acquisition of Trip.com is one step towards the creation of a marketplace model, inspired by no less than Alibaba’s Taobao.

In an interview with WIT, Google’s VP of engineering for travel and shopping, Oliver Heckmann, said, “Asia is ahead of many parts of the world when it comes to mobile, and that impacts everything from consumer expectations for faster, more seamless experiences to how we structure information in our products and how companies can assist travelers and improve the customer journey across screens and devices.”

Manchester-based startup Air Black Box, a software company to “help airlines sell stuff,” found its first customers in Asia – it is powering the Value Alliance, a grouping of eight low-cost airlines, a few of which have become its investors. Michael Szucs, chief executive advisor of Cebu Pacific Air and chairman of the Value Alliance, said software is the new alliance – one distribution platform, one payment – to enable travelers to buy across its members.

Traveloka, Indonesia’s leading OTA which blazed from obscurity to become Southeast Asia’s first travel unicorn in just five years, operates in a mobile-only environment in its home market of 261 million people. Hendry Hendrawan, chief financial officer, shrugs off any legacy-type questions as to what percentage of the business is mobile. “To us, it all’s mobile.”

With his background in finance and strategy, you can bet he’s looking at the disruption in fintech, and a Traveloka wallet cannot be that far away.

Mobile (and data) is also the path by which non-travel companies have breached the walls. Paytm, India’s largest mobile wallet, was inspired when founder Vijay Shekhar Sharma saw Chinese vendors paying for vegetables on mobile. Today, you can buy air tickets and hotels on Paytm, which has become the disruptor to watch as it aims to bring 500 million new customers online into travel.

Grab, Uber’s rival in Southeast Asia, has launched GrabPay, and you can now top up your wallet to pay for noodles in a food court. At three million rides a day, its partnership with Singapore Airlines signals broader intentions to grab travellers not just residents.

In South Korea, marketplaces like Ticket Monster (TMON) and Coupang have stormed into travel on the back of their mobile platforms and data power.

Japan’s Rakuten has been chipping away at travel longer than most other marketplaces – it set up a hotel reservations service in 2001 – but it’s only in recent years as e-commerce and digital took hold that it’s making a bigger dent in travel, thanks to its community of 1.1 billion members and Rakuten points system.

The “Look East” swing is not just for ideas of course – it’s the quest for the “Next Billion Users,” a term which came up constantly at WIT. The next phase of growth is in the second and third tier cities of Asia and in offline travel, which still forms 62% of the APAC total market in 2017, according to Phocuswright.

Truthfully, looking toward the East for ideas and inspiration is not new. Sitting on a United Airlines flight as I write this, I am reminded by how it was airlines in Asia – Singapore Airlines and Cathay Pacific, among them – which set the standard in service quality and innovation.

And in hospitality, it was Asian-based brands like Peninsula and Mandarin Oriental that set the standards and raised customer expectations – if you’ve stayed at the Holiday Inn Express in Singapore, you can be in for a rude shock when you stay at an Express in the US.

I’d like to think that Asia showed the world what a service-led economy could look like, and now it’s showing the world what a mobile-led world could eventually look like.

In his book Flying High, Fernandes said, “Disruption isn’t about destroying the competition, it’s about changing the market to your advantage.”

There’s a sign in its new RedQ headquarters that says, “Work hard. Be humble.” Wrote Fernandes, “… you should never forget where you’ve come from – that is a great reminder of your progress, not what people say about you or what you read in the newspapers.”

Jane Sun, CEO of Ctrip, has not forgotten where she comes from. At WIT, she spoke of how she came from a penniless family – on a monthly income of $15 – and how, thanks to a professor and his family, she got a scholarship to study in Florida and today, she’s set up a scholarship fund in the professor’s name and named her daughter Nancy after his wife.

Now running a company valued at US $25 billion, she talked of how she encourages “Baby Tigers” among her team of 33,000 to come up with business ideas.

Traveloka’s Hendrawan spent 13 years in the US before returning to Jakarta. Living in a city like Jakarta where it is said you can spend a total of 22 days a year sitting in traffic teaches you to be positive and to keep it real, he said.

Melissa Yang, who worked in Expedia and then later became CTO and VP of engineering of Escapia, which was acquired by HomeAway in 2010, returned to Beijing to co-found Tujia, the vacations rental giant, because she wanted to make a difference to how Chinese people traveled and experienced their holidays. As entrepreneur-in-residence at IDG Capital, she’s now active in the field of AI.

It is individuals like Fernandes, Sun, Hendrawan, Yang and many more who went abroad for studies and work and then returned to Asia to be part of the current economic boom who are leading the next wave of innovation in the region.

They blend global exposure, Western thinking and Asian sensitivities, and it is to them we should watch, technology is only a part of that.