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Smartphone adoption has skyrocketed in the APAC regions in the last few years. If you look at the number of mobile phone users worldwide, China and India occupy the top two slots on that list. Consumers in these countries turn to their mobile devices throughout their purchase journeys, and that’s great news for marketers. To cater to these mobile-first users, companies need to bring about a shift in their approach to customer engagement at all touch-points.
What factors define the mobile-first markets of Asia? What are some cutting-edge growth strategies that companies in these regions implement? What metrics should you focus on? We explored answers to some of these questions in our #GROWTH MIXER San Francisco with Anand Chandrasekaran, who’s an experienced product leader and an angel investor.
We are happy to share a summary of that discussion in this blog.
About Anand Chandrasekaran
Anand has led teams that built products that impacted millions globally. He has the unique experience of leading product teams for Yahoo and Facebook in the US as well as unicorns in Asia such as Snapdeal and Airtel. Owing to his experiences with internet first companies on both sides of the globe, he brings an interesting perspective, comparing the business landscapes and trends of the West and the East.
The center of gravity for mobile businesses is shifting to Asia
In 2018 alone, China had 100 new unicorns, the number in India went from 8 to 26, with six new unicorns created in Indonesia – and these numbers just scratch the surface of Asian markets.
The center of gravity for mobile-first businesses has started to shift towards the East. A few years ago, every founder based in the Philippines, India, or Singapore would go to the Valley to learn from the US businesses. Today, everyone goes to Beijing, Shanghai, or Schengen to understand how new companies run and how consumers are operating on their smartphones. Even investors turn to China and other Asian countries. In fact, five out of the top 10 investors named in the Forbes Midas list have made their primary deals in China.
Key factors that define the Asian markets for online brands
- Android cannot be an after-thought: When companies operating out of the US, venture to the Asian markets like India, Indonesia, or China, the first thing that shifts is your user-base. As much as 90% of your customers will now be on Android. So you need to be Android-first, unlike markets like the US where you build for iOS first and think about Android in the second year.
- A diverse audience: Asian countries are not homogeneous. One needs to cater to 20 different personas at a high level, each of which speaks a different language, might not have traveled to other regions, and has local behavioral attributes.
- They’ve skipped PC: A lot of these countries are mobile-first. What this means is that the users have skipped using computers and went on to adopt the mobile. In India, for instance, there are about 250 million smartphones and about 150 million televisions. For many users, mobile is not only their first screen but their only screen as well.
- Localization is not an option: There are millions of English-speaking users in Asia. So, a service built for the US can primarily work out of the box in these markets. However, the next 50-100 million online users consume content via videos, using voice search, and post voice notes. Next, these users will start using e-commerce, online hotel booking, and other services. Companies need to be equipped to localize their communication to be able to cater to these users.
Companies leading the way to growth
- Internet companies such as Flipkart and Ola, which started as the Amazon and Uber of India, respectively, built a considerable user-base before the companies Amazon and Uber turned their focus to Asian markets.
- OYO Rooms, Asia’s largest hospitality chain, and a member of the Unicorn club create immense value for consumers by bringing together consistency and convenience.
- Another example is Sharechat, a regional language social networking app, caters to the non-English speaking population, has grown to 50 million users in a year.
3 key takeaways from Asia, for marketers world-over
- Data cost in countries like India is lower than those in the US or the UK, and there are millions of new users beginning to browse, consume content, and shop online. Services built for these new users are growing from zero to a hundred million users in a year. This means Asian markets offer an excellent opportunity to learn about new users, their online behavior, and new business models.
- Companies looking to go global cannot afford to ignore the Asian markets, given the massive user-base coupled with an increasing disposable income.
- Consider the LTV of Asian consumers against the cost of acquiring them.
Key metrics to focus on
All businesses need to identify and measure the North Star metric that best captures the core value your company delivers to customers. Identifying the right business metric is perhaps the toughest and the most complex conversation within an organization. Nevertheless, it is of utmost importance as it impacts several business decisions at the highest level. It is a matter of what you want to see versus reality. While the right metric depends on the respective business models, some examples are:
- For a messaging app, the number of two-way messages between users.
- For a music subscription app, the number of songs played.
- For an e-commerce app, total sales minus returns.
How companies successfully use the North Star Metric to drive growth
Take a look at these three real-life examples of companies that have successfully leveraged the North Star Metric.
1. 2-way Sends in a messenger platform
One of the world’s leading messenger platforms uses 2-way sends as the North Star Metric. To determine engagement, they count the number of times that a user has messaged a business, and the company has responded. Similarly, they measure the number of threads where two people have messaged each other. This helped them avoid counting Spam messages and focus on real interactions.
2. Daily orders minus returns minus cancellations in E-commerce portals
One of India’s biggest e-commerce marketplaces uses a North Star Metric- daily order minus returns. The company launched a new category of FMCG goods and saw their orders soar from 0 to 1000 in just three weeks. However, a closer look determined that the company was feeding the growth of small-time sellers who bought the company’s goods at 70% discount and sold them to the neighborhood at almost 50% profit; plus they returned what they couldn’t sell within seven days. The daily orders minus metrics indicated that 85% of the orders were returned.
3. Song plays in a music subscription app
Wynk, a music subscription app in India had an entry pricing at 1/10th of the nearest competitor. Wynk’s team decided to use song plays as the North Star Metric for every feature they launch. This helped them determine that with the right programming and pricing, they could get people to shift from pirated music consumption to authorized channels for music consumption.