While everyone looks forward to life beyond Zoom, it’s worth noticing what the current season of living digitally has produced. New patterns of behavior and preference are being set in digital markets. Many will persist after the shutdowns end. Companies that serve these needs well are using technologies and strategies that could set the pace in digital business for years to come.
My Singapore-based VC firm, Golden Gate Ventures, invests in tech startups across Southeast Asia. As such, we’re always trying to gauge what the digital future may look like in the region’s emerging economies. The pandemic gives us an accelerated view because Southeast Asians are now adopting new services so rapidly. Here’s how some key companies are shaping the markets in four verticals: education, e-commerce, entertainment and healthcare.
Education: The shift to learner-driven and ‘blended’
Schools in many countries under lockdown have tried to emulate the classroom experience by videoconferencing. While that trend may have some uses in the future, guided group activities will probably remain among the things best done in person. Potential game-changers in edtech (education technology) do not attempt to be digital clones of traditional processes. They shift the paradigms.
In a previous Forbes column I described how pre-coronavirus, new forms of edtech were being pioneered in Southeast Asia, as governments and public schools have been leaning on online educational tools more than their Western counterparts. Thus, waves of edtech startups are helping to meet the demand for quality education in this region’s fast-growing countries.
Indonesia’s Ruangguru bills itself as a “one-stop learning” company. Tap the Ruangguru icon on a mobile screen and you’ll see, at first, a seemingly typical app for learning enhancement. There are game-like videos and practice tests for students of various ages, in subjects from math and science to world history. If kids get stuck, they can click for an instant live chat with a tutor. Or be connected to longer-term help, or join online multi-student sessions in subjects of their choice.
Ruangguru was growing steadily even before the pandemic. But once schools in Indonesia began closing, visits to the company’s website very quickly jumped from around 7.5 million to over 11 million per month. Ruangguru offers a free intro version of its platform and draws revenue from students’ families buying full-up versions.
Another mobile-based edtech startup doing well is KooBits. (KooBits is a portfolio company of Golden Gate Ventures.) The startup teaches the vaunted Singapore math curriculum, which lends itself to presentation on a screen, as it includes visualizing math problems. KooBits now sells into the Middle East as well as Southeast Asia. Some schools actively promote the app to parents.
Stanley Han, founder and CEO of KooBits, explained how startups like his and Ruangguru may change the basic nature of education. Whereas it has long been the teacher’s job to wrangle diverse groups of students into learning new material, online platforms now exist that can “successfully engage learners at scale,” Han said. “As a result, these students’ learning is becoming self-directed and collaborative in nature,” which frees up teachers “to do more important coaching and mentoring.”
Many observers see the future of education tending toward a “blended” mix of online and in-person learning. Students will drive their own learning to a greater degree. They’ll use mobile apps, plus digital conferencing with friends and tutors, to collaborate. Teachers will oversee their progress while stepping in to lead crucial in-person parts. And this may happen first in Southeast Asia, where most nations’ budgets simply can’t pay for quantum improvements in conventional schooling.
E-commerce: Digital startups open a lead
Predictably, homebound Southeast Asians are hammering their screens to order groceries for delivery. Just as predictably, they’re finding limits on order amounts and deliveries that must be scheduled days in advance. But some firms have handled the surge better than others. One is RedMart. (RedMart was previously was a portfolio company of Golden Gate Ventures.)
Founded in 2011 and later acquired by Singapore-based Lazada Group—owned, in turn, by Alibaba—RedMart has ample financial backing. The more important factor, though, is that it’s been an online-only e-commerce firm from day one. This enabled RedMart to scale up more effectively than bricks-and-mortar retailers that offer online ordering as a side feature.
RedMart’s management and tech staffs are focused entirely on e-commerce. They have spent years fine-tuning details such as order tracking, customer notifications, and software debugging. And though they’ve been slammed by the rise in demand, difficulties have come mostly from the physical aspects of the business: for example, there just weren’t enough refrigerated trucks to go around. Meanwhile, conventional grocers have hit phenomenal pain points on the digital side. They wrestle with issues like poorly fleshed-out user experience, order changes and cancellations, and soaring server loads.
Global history across a number of market sectors shows that newer firms with e-commerce in their DNA often win share from older companies adapting to the shift. If what we’re seeing with RedMart and others is an indicator, the pandemic will magnify this trend.
Online Entertainment: localized and customized
Gojek, founded in Indonesia as a ride-hailing company, has expanded into a decacorn selling a host of online services around a payment app. (Gojek is a portfolio company of Golden Gate Ventures.) Last summer, Gojek removed the stylized figure of a motorbike driver from its logo—echoing the time when Apple dropped “Computer” from its name—and that move was followed shortly by the launch of a new Gojek enterprise, GoPlay, for streaming entertainment.
A key part of the GoPlay play is to offer locally customized content. Licensing the Gossip Girl brand from the owners of the teen-oriented TV series set in New York, the company released Gossip Girl Indonesia, made with Indonesian story lines and actors. Expect more to come. This March, Gojek closed a $1.2 billion Series F round of financing, while the shutdowns were creating literally captive markets for online content.
Gojek’s story illustrates the unusual growth that can occur in emerging markets. The firm branches into new sectors more boldly than a U.S.-based ride-hailing firm like Uber could, and it uses local focus to compete with U.S.-based or China-based entrants throughout Southeast Asia.
Iflix, based in Malaysia, also has taken up the local-focus playbook. The firm began by streaming mostly Hollywood content, then went “hyperlocal,” encouraging Asian productions and making them accessible outside the countries of origin. The Singapore police procedural series C.L.I.F., filmed in Chinese language, streams on iflix with subtitles in Bengali, English, Malay, Nepali and Bahasa Indonesia. Other popular content includes South Korean dramas, Thai comedy and horror movies, and more. Iflix now claims to be “the world’s leading entertainment service for emerging markets.”
There’s also content that promises more than entertainment. Jakarta-based Inspigo (short for “Inspiration on the Go”) streams motivational and self-improvement podcasts in categories from “Mindfulness” to “Productivity.” Inspigo podcasts are honed to be short and impactful, and the company is seeing growth through the pandemic, some of it pushed by employers urging their people to upskill while working from home.
Healthcare: Telemedicine claims its niche
Last but far from least, a recent Reuters article featured two startups meeting medical needs in Indonesia during the pandemic. Alodokter and Halodoc (both names mimic “Hello, doctor” in a regional accent) link patients at home with physicians for online consultations. (Alodokter is a portfolio company of Golden Gate Ventures.)
Telemedicine of this type has been growing worldwide, with the virus shutdowns obviously creating a demand spike. Patients who suspect they’ve caught COVID-19 can get preliminary diagnosis and next-step advice; patients with other needs can often have them met digitally while physical care facilities are unavailable.
Alodokter and Halodoc stand out in two respects. They’d shown robust growth beforehand—Indonesia has many citizens in remote rural areas, far from quality health care—and the nation’s government has put the firms on an official list of care sources that even big-city residents should use.
At present the startups have had to scale back services that involve physical contact, such as scheduling and billing in-person visits. When some semblance of normality returns, Alodokter and Halodoc should be primed to move forward.
Where we go from here
Pre-coronavirus, we were already seeing online-to-offline (O2O) innovations in Southeast Asia that had not existed in U.S. markets, such as mobile classifieds player Carousell launching in 2012 and Gojek turning ride-hailing into a super-app. (Carousell is a portfolio company of Golden Gate Ventures.)
Entrepreneurs operate best under constraints, and I think 2021 will bring a renaissance of innovation coming from the COVID-19 lockdown period. By then, the region’s markets will be readier than ever to embrace new digital offerings. Shifts in mass behavior toward digital, which might normally take five or 10 years to play out fully, are now being fast-forwarded. Southeast Asian startups are staking the outlines of a future lived in real life, but with digital tech playing increased and often unexpected roles.
This article was written by Vinnie Lauria from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
