Local companies have suddenly caught the Internet bug. From banks and hospitals to cab companies, everyone seems to be launching web portals and mobile apps. Even B2B businesses are making an active effort to offer more of their services online. Until recently, the only active digital presence for most local companies was on social media networks and vanity engagement metrics (like counts on Facebook) were the yardstick for successfully engaging digital consumers. The focus now seems to be shifting to actively encourage consumers to transact online.
The emergence of the local e-commerce industry, driven by a bunch of scrappy startups, has revealed the potential for driving sales as well as engagement online. One would have expected the shift to digital channels to be well under way, given the technologically savvy younger consumers coming into the market, with a preference for convenient online services available anytime from anywhere. Perhaps realizing that they are behind the times local offline brands are now eager to catch up.
The ability to collect more targeted personal and behavioral data using digital touch points as well as build direct channels are a few of the advantages of digital mediums over more traditional channels. Most local companies and consumers haven’t evolved to that extent yet, but there will probably come a time when service companies can use online self-service portals to cut down on call-centres and branches island wide.
Supportive demographic trends and efficiencies aside, some current digital investments are also driven by a more primal need to survive and stay relevant to consumers. Findmyfare.com disrupted the airline booking industry by offering a convenient, transparent digital model and managed to capture significant market share from long established traditional travel agencies. Ikman.lk similarly captured the classified market and quickly became one of the most visited websites in the country at a time when Hit Ads, the established market leader, was more focused on print media. There are many more such examples in foreign markets of nimble fully digital operators entering and capturing market share where incumbents were digital laggards.
The message to traditional brick and mortar industries is clear – go digital to the furthest extent allowed by the industry or leave room for a competitor to eat your lunch. For example if traditional banks don’t launch transactional mobile apps, a startup may capture the market for peer-to-peer mobile transactions. Similarly, if cab companies don’t offer an easy method for users to hail their taxis, a cab hailing app may capture the market by offering users a smoother and more convenient booking experience.
Not every traditional offline business is set to make a smooth transition into the digital space. In fact, most will suffer from a mindset too set in traditional physical product development and launch strategies. Companies looking to build engagement around web and mobile apps should aim to build basic minimum viable versions of their product, launch, build traction and use feedback to improve. The process is the exact opposite of developing and launching physical products, which need to be refined and tested before mass production. Offline businesses that experience such issues could well benefit from a dose of startup thinking. Indeed some have already realized this and are spinning off their digital initiatives as startups. However there is more room for large offline businesses to use startups and established e-commerce businesses to their benefit. For example many businesses building their own e-commerce portals could test the online sales for their products by listing on already popular portals such as Takas and Kapruka before investing in a proprietary platform.
Media companies could similarly partner with news aggregation apps to test traction before launching their own apps. Once the decision has been made to create proprietary applications, companies could look at purchasing white label solutions from startups. For example a courier company looking to launch a mobile app for customers to arrange their package pickups could easily customize a taxi-hailing app, if a white label solution was available.
The small size of the market makes it a necessity for web and mobile app startups to partner with bigger brands and find multiple streams of revenue to survive. A few mutually beneficial partnerships could go a long way towards creating more viability for local Internet startups and securing some new age digital native thinking for bigger brands trying their hand at the startup thing.