The Asian market covers a vast majority of the global market. Many have attempted to gain a foothold in the region, and only a few can claim success. What does it take to tackle the Asian market? We take a look at the different approaches of 2 of the most highly valued startups in the world – Airbnb and Uber.
The Asian Market
Asia is the biggest continent in the world, with a huge population of over 4.5 billion people, abundant resources and exciting opportunities. Approximately US$103 billion worth of investments were channeled into the region in 2017, up by more than 100% from US$50 million in 2016. Additionally, the rapid rise in the purchasing power of Asian consumers over the past 20 years has also contributed to the irresistible lure of the region.
This incredibly attractive market comes with its own unique set of challenges. A large unbanked population, mobile-first consumers, cultural nuances and over 2,000 different languages are just a few of the hurdles companies face when penetrating the Asian market. What’s the best way to approach an expansion into Asia? Uber and Airbnb takes two very different approaches.
Uber – Sticking to Their Core Beliefs
In 2013, Uber began its expansion into Asia under the leadership of the founder and former CEO, Travis Kalanick. Their approach to Asia has been described as a ‘one-size fits all’ strategy, sticking close to the company’s core belief of having a global vision and a global solution.
Uber’s cashless solution to ride-hailing did not sit well with Asia’s largely unbanked population. When the company first entered the market, drivers could not accept cash. This decision was based on Uber’s belief that one of their core strengths was their seamless payment platform. As a result, Uber came across as a premium service, available only to the wealthy elite. It was only 3 years later that they realised they could not survive in Asia without the option of cash payments – a fact that local rivals, Grab, Ola and Didi Chuxing already knew.
Another example of Uber’s overconfidence in their technology was their decision to hold off on setting up call centres in Asia – until they faced troubles in India. Local companies, however, understood the complexities of Asian languages and the deeply ingrained cultural preference of face-to-face communication. Local players featured voice commands and 24/7 call centres to deal with customer issues in their native languages.
Having a playbook can be helpful in expansion efforts. Uber had a playbook, but without sufficient research and data on the local market, there was little chance at succeeding. Many of Southeast Asia’s emerging countries are plagued with traffic jams, making journeys by car much longer than journeys by bike. This issue was actually the impetus for Uber’s Indonesian rival, Go-Jek, allowing Go-Jek to gain a majority market share in Indonesia by focusing on transportation by bike.
Airbnb – Global Citizens Thinking “Glocally”
One of the most valuable startups in the world, Airbnb’s global expansion has been described as the ‘industry standard’ that many companies look up to. Their mission to build a global travel community where you can belong anywhere is at the heart of their localisation strategy.
From the get-go, Airbnb realised the importance of localising languages, relying on a global translator community to localise their platform. The company went on to build their own highly sophisticated translation management system, Polyglot.js, to allow users to update translated versions of their own content easily.
The process of localisation requires a company to be incredibly fluid. In Airbnb’s case, they went as far as changing the company name to Aibiying in China. They recognised that ‘Airbnb’ isn’t easily pronounced or translated in Chinese, and they decided to let go of their brand for a Chinese name which translates to “welcome each other with love”.
Another big challenge when it comes to Asian expansion is the country’s regulations. Each country has their own set of rules, and these regulations are especially diverse in Asia. They can range from the incredibly strict rules of China, to the mercurial guidelines of developing Southeast Asian nations. Airbnb has been in constant negotiation with relevant governing bodies to ensure that requirements are met and that all information is kept transparent. They managed to secure ‘partnerships’ with the Thai government, compromise with Singaporean regulators and have backed down to enforce the rules set out by Japan’s government. The key to such negotiations is compromise. Airbnb has approached this hurdle with the intention of benefitting everyone, including governments.
Choosing a Strategy
Based on the 2 very different approaches from Uber and Airbnb, it seems like the latter’s strategy to tackle the Asian market has seen a little more success. However, there needs to be a right balance of fluidity and rigidity. Localisation is important when it comes to hitting the right notes with Asian audiences, but maintaining core values is essential in developing a loyal following and brand recognition.
The most important takeaway from this is the necessity for research. Every country in Asia has its own unique problems, taboos and preferences. Make sure that you understand the market and localise your solutions to address the incredibly diverse needs of the region.