|Asia-Pacific II 2002
|The Intricacies of Internet Businesses in Asia – Pacific – What Lessons Can We Learn?
Martin Roll is the founder of VentureRepublic, an international strategy consulting firm with core competency in global branding and marketing based in Singapore and Copenhagen. Mr. Roll is Danish and a resident of Singapore. He earned his MBA from INSEAD and his Bachelor’s degree from the Copenhagen Business School. Prior to founding VentureRepublic he served as the Vice President of Global Marketing and PR for Ascio Technologies Inc. in Singapore, as the Chief Marketing Officer of the NetDoktor.com Group, Copenhagen/London and as Account Director for DDB Needham Advertising Worldwide in Denmark, among others. He is a Member of the board of the Danish Business Association of Singapore (DABS) and, from 1991 to 1999, served as Chairman of The Marketing Management Board of the Danish Marketing Association. Martin Roll is fluent in several languages and an avid sailor and sailing instructor, photographer, student of Asian culture and art collector.
Internet statistics are performance indicators in the global development race. In the Asia-Pacific region, government and industry have programmes to catalyse Internet business. We have learned from the Internet bubble burst that it is more important to start well than to be first. The key to success is to prepare, scale your business model for constant change, integrate marketing and branding from the start, educate your customers, track results to constantly improve and always deliver what you have promised.
Around the world, governments have begun viewing their Internet statistics as one of the performance indicators in the global development race. As Internet gains increasing prominence on the global political arena, many countries are now convinced of the value of broadband in linking people and businesses together, enhancing overall communications, and creating a national competitive advantage. In the Asia Pacific region, governments and industry authorities are beginning to put in place programmes to catalyse the opening up of competition and development of a pro-Internet business environment. Major Internet players and a new wave of entrepreneurs are once again back into the game arena, building up an arsenal of technologies and services and stronger business models to complement and leverage commercial opportunities resulting from these efforts. The ugly episode of the Internet bubble burst seems to be a historical issue with no significant relevance in today’s business environment. But there are lessons to be learned from it. In Singapore, the government is urging Singaporeans to work together and secure Singapore as a global leader in e-business and technology. Various government-funded initiatives are put in place to attract budding entrepreneurs with good ideas and a solid business plan. IE Singapore is one of the government agencies which are aggressively pushing local industries and companies into the global market place. Other Asian countries could learn from these efforts. However, danger comes with excitement and failure comes with inexperience, as demonstrated during the last couple of years. We have read news about dot-coms collapsing and running out of funds. Surviving Internet businesses are barely above water and are reviewing their business models. There is a high chance that most Internet – related businesses would cease to operate if this trend continues. Yes, we should embrace the digital future, but what are the lessons we can take away from the last episode? What are the intricacies of an Internet business? I would say, ‘Observe and learn. Prepare and deliver.’ Fast and effective? Or quick and sloppy? In an Internet business, time is of the essence. Technology advances rapidly and there is always a possibility of being overtaken by competition. As a result, many Internet businesses skimp on the initial preparation process. Some may not have conducted market research to identify a unique and real consumer need before developing the business strategy. They are worried others may come up with better solutions/services by the time detailed consumer and market analyses take place. Some of us may think all we need is an interesting idea and lots of passion. However, it is not as simple as that. For example, more than 50 per cent of website visitors do not get past the front page. ‘Follow-preneurs’ Consumers need to have a product or a service which they cannot find elsewhere. We also have ‘follow-preneurs’ who identify a particular successful Internet business and decide to follow the same business model. But what differentiates you from the rest? ‘Don’t follow the crowd’ is an old saying – more relevant than ever in a fiercely competitive world. I agree we should move at Internet speed. However the speed alone does not guarantee a successful business. The fundamentals of the business structure and the reason for its mere existence have to be achieved in the first place. Never skip the research and preparations because they are the first step to your success. Start Well or Start First? Some may think that an Internet business can always be launched first and revised later. Perhaps they feel safe as long as their business is in the market. But the rush may also mean that some of these companies have missed out certain requirements. As a first timer to the website, if I do not like what I see or if I cannot find any product or service that meets my needs, I will not visit the site again. Why not start with something which the consumers will be happy with in the first place? Starting first does not mean anything if you do not start well. Education or Information? The Internet has rich resources and plentiful information. Of course you must know how and where to find it. Many may not know the full benefits and value of your online product and services. Do you merely provide information or do you educate your potential consumers of what is beneficial to them and how to make use of these services? I get disappointed when I go to a particular website and get overwhelmed by its content. This is what consumers need: simple, easy-to-find information – and they want it fast. So What Should You Do? There are six rules which you can apply to your Internet business to maintain its viability and success. 1. Prepare: Before the launch, prepare adequately. Make sure that your business addresses a unique consumer need and survey the ground before tailoring your business to meet real needs. Think already at this stage about going international and take adequate steps in this respect. 2. Scale: Maintain a flexible and scalable business model. Make sure all processes can be revised and expanded upon as both the technology and the e-business environment are ever changing. 3. Integrate: Technology is not the only factor. Involve marketing and strategic branding as an important part of your management process. From planning and design to launch, after-launch and marketing, they should be fully integrated to communicate and provide a complete picture to your consumers. 4. Educate: Where and how to get your products/services. Convey the benefits you bring to consumers. 5. Track: Start with a well-thought product/service. Then maintain constant feedback and track consumer perceptions and reactions to your products/services so that you can constantly improve your business. 6. Deliver: Deliver what you have promised. If you over – promise and under – deliver, you will only undermine trust and confidence in your business. In the next few months, we will see more developments in the Internet arena. Terrorism activities have further escalated the importance of online communications for businesses and virtual networks and management structures. There will be rising opportunities in the Greater China region as new Chinese leadership sets in and Asia, generally speaking, is an important region for future growth, an attractive market place, which provides substantial opportunities for foreign companies and investment. Much will depend upon the ability of local and foreign companies to establish a strong local name for themselves. Branding and identity impacts the business performance of all modern companies regardless of industry, market and culture. They need to leverage the brand assets within the entire organization. Today’s consumer demands that brands live up to their promises in every interaction, whether it is through products and services, employees, identity or communication. Even when faced with better price/performance combinations, consumers tend to choose their favourable perceptions over the facts. A coherent brand will gain the trust and loyalty of its customers and foster a profitable relationship between brands, the company and its customers. Successful brands are long-term investments – you must communicate your promise and keep delivering it over time. The growing emphasis on international branding will move up on the boardroom agenda since it has a direct impact upon the business and its financial performance. We believe that branding will become one of the most prominent drivers of value in Asia Pacific in the next five years. More Internet businesses will fail, but we will see even more joining the new Internet game. Businesses with a sustainable model will benefit from this process as the consolidation moves on. However, the challenge is not to look at failure as failures. Learn from mistakes and become stronger. Having the technology is no longer adequate. You need to be a complete player who covers all grounds and have the vision to follow through and improve. Being a techie is no longer enough. You also have to be an excellent business leader and marketer. Therefore, reconsider your management team and take on highly skilled people with global experiences and preferences for rapid change, new knowledge and best practices. All these factors are no longer a luxury but a necessity. Last Words There are many opportunities and challenges within the Internet universe, especially for technology deployment, government participation, industry collaborations and corporate and product branding.