The Asian market is still the center of attention of the big investors, however you can not succeed without a good product, says Jay Olos

Philippe-born Jay Olos is without exxageration a superstar on the Asian e-commerce and fintech scene. In the first part of the interview with Jan Ruzicka, Olos describes how the Asian market works, in today´s follow up, Olos not only speaks about his personal success at the scene, but also discusses the growing fintech environment in detail with it´s billions of worth potential.
„There is still a lot of investors flocking to Southeast Asia, especially looking at Series A and Series B companies. We are are expecting more than 400 big exits in the next two to three years within Southeast Asian market. But all this is a product-led growth movement, without a really good product, you are nothing and you will not succeed,” says Olos.

Welcome back Jay, in the second part of our interview let's move away from mass-market e-commerce and digital for now and talk about one thing that Asia or Southeast Asia especially is very well-known for - fintech. In the U.S. you have PayPal, which has started as a white-collar app, but here in Asia people from the countryside in India use Paytm, people living in Kalimantan, Borneo, they use the Grab finance app, in China they use WeChatPay. You see it also in your 7,000 islands that people from the very distant regions are very native with the wallets, online lending, Buy-Now-Pay-Later etc. Can we look at the grassroots, how did this kind of leapfrogging start?

That's a very interesting question. Let me share a little bit about what happened here in the Philippines in the early days. That time, digital financial services were mostly small projects of the big telco companies. For example, there was Smart, which was the analog-based remittance money sending system where a SMS-based user can transfer load or a data plan to another island here in the Philippines. But because there were no smartphones at the time, they had to go physically to a pawnshop to cash-in. That's how it worked and even now you can find this kind of pawnshops where people go to cash-in and cash-out.

What came next?

It has started around 2015 with the rise of what we now call the fintech apps. The strategy they employed was to get to the early adopters first, the young professionals and more tech savvy people, and to get the product tested and have a series of iterations thanks to them. The second step was to engage with as many businesses or merchants as possible as billers within the app. It was a well-thought-out plan. And now everybody is using GCash, PayMaya or AliPay.

We also have a HCPay. Like HomeCredit Pay. Everybody is doing that.

Yep, totally. In places with more developed banking ecosystem, like in Hong Kong or Singapore, it's more about the banks that are trying to innovate. This pushed the fintech landscape further.

For me personally Hong Kong is more old-fashioned and brick-n-mortar. I think it's connected to the fact that it was already well-developed market before and thus leapfrogging was unnecessary. But Singapore is a place to be and to penetrate the neighboring countries from the city-state. There are millions of people without basic financial services. Plus, countries are big, so building offline solutions is not possible. How do you see this idea of trying to bring rural people to finance via fintech?

It’s still challenging, because as they say: “You need money to have money.” So, while there is strong push to empower people with fintech apps, many of those people don't have any money to cash into their apps, so they will always use the app because of the free load, free data, and the other freebies. But real e-money won’t be there. That's the cycle that needs to be broken.

One way to address that really is to first look at the source of the funds of those people and to connect it directly, for example connect the salaries and the employers directly. Then, people will start having some money inside the fintech apps and start using them. And then from there comes retention strategies and for example for every cash-in you will have, let´s say, 50 pesos back in the form of a rebate, which would improve stickiness and loyalty. Otherwise, people would just download an app because of its freebies, but once those freebies dry up, they will move to the next freebie app. Therefore, and that’s the lesson learned, the challenge in any fintech company is how to get into the heart of target consumer and get them engaged to ensure the sustainability and usage of the app.

I totally concur. Either you have these freebies in the form of some interesting content, or gamification, or coupons & discounts or you have a super app that people cannot live without. And in that case the financial part is just one of many parts of the super app.

If we use example of the super-app Grab - it started as a ride-sharing scheme. Therefore, it had a high volume of usage and in Jakarta you used it perhaps 4 times a day. Then, you start using it for the delivery of food once or twice a day, so there we have six organic interactions per day. Then logically you build a wallet inside it, because it’s easier to use wallet than your credit card, plus a lot of people don't have a credit card anyway. Thus, you have a wallet and then you will start building financial offerings around it.

But if you have a single app without freebies and marketing money, it is tough. And in all scenarios, you burn lot of marketing cash.

Yeah. That's why there’s a lot of fintech apps that are targeting B2B business models first, because that's the low-hanging fruit. And then, they try to reach out to the end consumer.

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