What’s Next 2017: Seizing opportunity

  • Identify a market gap and strategise to fill it
  • Innovative concepts and tech to solve problems

 

What’s Next 2017: Seizing opportunity

 

THE panel session Seizing Opportunity at What’s Next 2017 comprised three entrepreneurs who were able to scale their startups by taking advantage of the opportunities the market provided. Though there was some risk involved, hard work and forward thinking kept them going.

The panel comprised founder and CEO of Global Rooms Ltd Kaneswaran Avili, founder and CEO of Soft Space Sdn Bhd Chang Chew Soon, and CEO of Forest Interactive Sdn Bhd Johary Mustapha, with managing director of Ansible Malaysia Manu Gopinathan as provocateur.

Global Rooms is a virtual hotel operator that offers rooms in budget hotels in various countries across Asia via its online platform NIDA Rooms. Kaneswaran started Global Rooms in Indonesia in 2015, trying to digitalise budget hotels, especially independently-owned ones.

“Penetration of branded small hotel chains in the Southeast Asian hotel market is very low compared to in China or the US, so we saw a huge opportunity there,” said Kaneswaran, adding that this is the startup’s second attempt to build a branded hotel chain in SEA; the first was with Tune hotels. Global Rooms has about 4,000 hotel partners across SEA.

Kaneswaran explained that the startup’s strategy was to start with ‘soft integration’ with hotels – putting them online – and then move on to deeper integration. This second stage, which has just been put into play, involves launching its first lease-and-operate hotel in Kuala Lumpur.

Chang said that the idea behind payment platform and service provider Soft Space is to empower people from all walks of life to use electronic payments. Today, 22 banks across SEA use Soft Space’s platform.

Chang sits on the EMV (Europay, Mastercard and Visa – the global standard for chip cards) board and the Malaysian national bank Bank Negara’s advisory committee for finance and technology.

The journey to get to this point took about five years, with the beginning being full of challenges, especially getting banks on board. Soft Space faced a lot of rejection in those early days.

Soft Space recently signed an agreement with convenience store chain Family Mart to provide it with e-wallet solutions. Chang said that instead of launching its own e-wallet, Soft Space saw the opportunity to allow big brands such as Family Mart and 7Eleven to create their own e-wallet leveraging on Soft Space’s technology.

He explained that because these brands already have loyal customers, their e-wallets are more likely to be successful than a Soft Space-branded one.

Johary said that Forest Interactive was difficult to scale at first. The mobile-related services provider specialises in developing software solutions in creative multimedia, telecommunications and ICT, and is now also working with mobile services operators to address payment shortfalls in Asia.

Because credit and debit card penetration is relatively low in certain parts of Asia, especially rural SEA, there is a lot of opportunity for mobile payment solutions, smartphone penetration being around 60% on average. “Once smartphone penetration reaches 100% in the next few years, we will see a lot more services offered through smartphones,” said Johary.

The panellists revealed that they saw opportunities in their respective markets to solve a problem by meeting a specific need and making things easier and more convenient for customers.

Kaneswaran said that Global Rooms’ current lease-and-operate strategy solves a large underlying problem: “[Budget] hoteliers are generally strong in operations but absolutely horrible in marketing, pricing and branding. With their competition rising, they were struggling. We decided that instead of just providing them additional sales, we could help them solve the entire problem.”

Global Rooms has a three-part strategy here – it leases the hotel from owners who don’t want to run it anymore but still want to own the business, operates it and brands the hotel with its own NIDA Hotel brand.

Soft Space, meanwhile, has come up with an innovative way to use its technology besides with payment gateways. It has enable access to second screens in local cinema chain TGV, using tablets to allow movie-goers to not only order from the concession stand while watching a movie but also look up and purchase items they see in the movie at the mall they are in. The software pushes item recommendations and promotions to the movie-goer, encouraging them to spend at shops in the mall.

As for challenges faced, Johary said that the biggest one for Forest Interactive was convincing potential clients, even locals, that technology from Malaysia was good enough to solve a problem and succeed. Nowadays, years on from where Forest Interactive started, people are more accepting of Malaysian technology can be innovative and successful.

A future challenge and opportunity that he sees is imposed by the advent of cryptocurrency, that is the problems of figuring out payments and taxations when using cryptocurrency. “How do you make it easy for your customers who use cryptocurrency, how do you let them pay the way they want to? Those are the challenges we will face.”

Kaneswaran and Chang said that their businesses face regulatory challenges. For Kaneswaran, it affects scalability. He said that working with regulators to overcome the problem is the only way to eliminate the challenge.

For Chang, the strict financial regulations in Malaysia were a big initial challenge but he pointed out that the national bank has now come around to the fact that technology is the only way to move forward. There is, however, some way to go, both in Malaysia and the rest of SEA.

“I’m looking forward to regulators and policy makers continuing to catch up [with innovation] instead of trying to regulate and supress it. They must embrace it, within a controlled environment, of course.”

“This will give other fintech startups a chance. I don’t want them to go through want I went through.”

What’s Next was sponsored by big data and analytics specialist, Fusionex International, Malaysia Digital Economy Corporation (MDEC), Maxis Bhd and Anaplan. Accenture Malaysia was Knowledge Partner, iTrain as Training Partner, Leaderonomics as Leadership Partner, Ansible Malaysia as Digital Partner and Valiram Group as Lifestyle Partner. BFM was the Media Partner.

 

Related stories:

What’s Next 2017: Getting the ball rolling for SMEs

Global fintech investment robust on back of strong VC funding: KPMG

GuestReady raises US$3mil in seed funding, acquires Easy Rental Services

 

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