Unusual partnerships could be the key to accelerated growth
Emerging markets in Asia are now experiencing a period of development like nothing we’ve seen before; accounting for two-thirds of global growth. The region’s rising middle class – expected to reach over 3 billion by 2030 – are voracious consumers, expected to spend US$20 trillion in 2020 and a stunning US$36 trillion in 2030. And when they do spend, these emerging Asian consumers often choose local businesses rather than global brands; preferring to work with a business that speaks their language and can offer competitive prices.
In this context, there is now an unprecedented opportunity for local challenger companies in Asia to grow their business as never before.
What is a local challenger? Unlike long-standing global corporates, the local challenger is agile, experimental, and not afraid of making investments that defy the status quo. These are the disrupters, the former underdogs-turned-wonderdogs, ready to set the trends of tomorrow and reshape how we do business in the future.
Local challengers in Asia are thriving; with each success story, other small businesses are empowered to see that they, too, can be regional changemakers. Asia’s startup scene has produced one-third of the world’s unicorns, demonstrating the power of the Asian entrepreneurial spirit: complacency is not an option, and big risks can have big payoffs.
However, despite the continual growth and ongoing success of local challengers, Asian startups operating across emerging markets mustn’t overlook the potential threats to growth and success. Asia Pacific now faces a labor shortage of 12.3 million workers, a number that is expected to rise to 47 million by 2030. Rising labor costs, meanwhile, are continuing to erode many businesses’ competitive edge. Moreover, startups are further challenged to adapt to the age of the digital-minded customer, who demands speed, convenience, and innovation built around their every need.
One way to increase competitiveness and meet the needs of digital-first customers– without investing in more manpower–is to work with local partners who already operate via cutting-edge technology. That way, a startup can leverage digital platforms and capabilities without making sizable investments of their own.
There are many examples of what these local partnerships can look like. It might be a boutique yoga studio collaborating with a home-grown wellness app like GuavaPass to get more attention from new subscribers looking to access a range of fitness activities. These kinds of local partnerships helped GuavaPass grow, bring in more business to smaller workout studios in Hong Kong and multiple Asia markets, and eventually catch the attention of ClassPass, which acquired the platform in 2019.
Local partnerships might also involve two startups in the same industry coming together to capitalize on one another’s innovations, as in the 2020 partnership between Lalamove and Klook, the travel booking platform. Working together to launch A Guide To The Best Meal food delivery service for individuals in Hong Kong who are working from home, the partners leveraged one another’s strengths to bring a fresh offering to the market.
What with the ongoing coronavirus reducing foot traffic for retail locations, last-mile delivery solutions have become an important resource for startups. When an SME doesn’t have the manpower or resources to develop its own logistics solutions, a digital delivery platform can offer a quick and easy way to schedule deliveries, track vehicles to ensure goods have arrived, and continue to deliver solutions to customers. This kind of partnership enables even the smallest businesses–whether they’re a mom-and-pop flower shop or a famous local bakery–to get value from cutting-edge technology, without their own direct investment.
The future of business in Asia has never been brighter. Now is the time for local challengers to set themselves apart and position their business for future growth. Every business knows the importance of digital transformation, but to remain on top, it’s critical to stay open-minded to new ideas, insights, and innovations as the next decade kicks off. Finding the right partner to work with is the key to success, as markets–just like mountains–are meant to be climbed together.
About the Author
Blake is Managing Director, International at Lalamove. **Lalamove is a leading tech company that connects people and businesses to on-demand delivery services. It uses technology to make delivery fast and simple; matching over 15 million registered customers, SMEs, micro-sized businesses and larger corporates with a pool of 2 million trained and professional drivers.