Australia is often considered a stepping stone to South East Asian markets. For businesses incubated in Australia, South East Asia is as natural a progression as Europe is for UK businesses; so companies looking to move into the SEA region can find plenty of experienced talent (and horror stories) Down Under.
Australia is, of course, also English-speaking and Westernised, and a significant market in its own right; so it is a gateway to SEA with its own deep pockets. For an insight into the leap from Australia to SEA, we spoke to Tim Andrew, CEO of Localz.
Localz provides a location orchestration platform that powers the “last mile” experience, helping clients deliver goods and services to their customers using the most efficient and effective means possible whilst providing a high degree of transparency along the way. Made in Melbourne, Australia, but sold globally, Localz makes last mile innovations work for enterprises in the real world, at scale.
TELL US ABOUT YOUR EXPERIENCE…
“I was finishing university and working on a ferry out of Portsmouth when I met my future wife – an Aussie – who’s visa was about to expire. I ditched my plans to open an 8-ball pool bar in the Caribbean and followed her back to Australia. I figured I’d stay for a few months, but I came back 20 years later with my wife Tam and four kids in tow!
My first job in Melbourne was with Cricket Australia, selling sponsorship/media rights, before being recruited to NAB to head up their sponsorship team. I then spent eight years moving around and upwards in the bank.
While I was there, I realized that there were only two meetings that were actually directly impacting on the immediate performance of the bank: those involving pricing and those involving risk. And as I wasn’t the leader of either, I decided to move on.
I left to set up Split It – a transparent commission marketplace to split deals with consumers – and raised some money to get the operation started. It was reasonably successful but not brilliant, and I spent a little under three years there before deciding to sell the business.
As that was wrapping up, I started Localz with my co-founders, CTO Melvin Artemas and Product Director, Pete Williams. Within the first six months we were invited to pitch to join the first JLab program in London (the John Lewis Partnership’s startup incubation scheme focused on the retail technology horizon). We got through to the top five and went on to win the whole thing.
That project opened a lot of doors, and not long after we started landing clients like DPD, the courier. That early success was a catalyst to move back to London, and shortly after we raised a Series A round with Notion.
WHAT DID YOU LEARN FROM YOUR TIME IN AUSTRALIA?
“The Aussie roots thing is interesting because we clearly share certain characteristics with other start-ups from that part of the world. First, we focus on building an awesome business and we’re not ‘hype merchants’. We also believe in GDP: “the global domination package”; which is typically Aussie, as you generally need to grow outside of Australia to build a big business.
Time and again, we’ve seen SaaS companies from Australia like Atlassian, Envato and more recently Canva, do things the GDP way: focus on building awesome global businesses first and then if big opportunities come along, we’ll have a crack at them. When the opportunity to join JLab came along, we were actively planning to focus on South East Asia; it is only circumstance and the remarkable opportunity presented by JLab that led us to London instead.
Another Aussie trait that we share is the relationship-led approach to business. This is partly due to the fact that, despite Australia being a huge country, it only has a small population. From the beginning, an Australian entrepreneur knows that to build a big business, they will have to service customers at a great distance domestically and then leave the country. To do that, you have to focus on building relationships through partnerships and JVs.
HOW WOULD YOU THINK ABOUT SOUTH EAST ASIA?
“South East Asia is hard. People who don’t understand it refer to it as an amorphous blob. You may think you’ve got “a strategy for Asia”, but it’s a region of very large and very different countries. While we felt we had an advantage when looking at Singapore as the next place to expand, once the JLab opportunity came along, the UK seemed the right place to start.
Now our plan is to expand out of the UK to the US first and then cycle back to target one or two specific countries in South East Asia. We believe our strength lies in our skills in commercializing opportunities and building strong partnerships, so far from having a locked down roadmap or geographical plan, we will be led by market conditions and partner opportunities.
And those partnerships are essential in the SEA region. Those who don’t understand the cultural and commercial nuances in these wildly different countries often try to set up standalone operations. But I don’t know of anyone who has succeeded in the region without a local partner to lead or JV with.
WHICH ASIAN COUNTRIES WOULD YOU TARGET?
“From Australia, it’s key to establish a base within hopping distance. Singapore and Hong Kong both have highly developed ecosystems and are both startup-friendly. However, you run into the problem of both being small addressable markets; so while you may start there, you will quickly have to broaden elsewhere in the region.
Vietnam and Indonesia are interesting because of their rapidly growing tech sectors and their enormous populations. With a large and emerging middle class, and their comfort with ecommerce, they are a burgeoning delivery market. Their focus on mobile experience – like many Asian territories – is allowing them to leapfrog the market in terms of last-minute delivery, but Localz can deliver huge improvements in capability.
Both have their complexities too. For example, while Indonesia has a huge 200 million population, it’s spread across hundreds of islands with awful traffic in the big cities. And parochialism can be challenging. I worked at one stage with an Indonesian who started a business selling flights online. Yet he still had to set up a network of individual travel agents, who would then sell to their local communities. Customers did not trust buying from a website with no local presence for recourse in case something went wrong.
And then there’s Thailand. It’s home to many Australian ex-pats, plus they have incredible technical resources and a massive market opportunity, but low GDP per head.
- Don’t think of Southeast Asia as a whole: these are massive, distinct, and very different markets and you will need the help of local people to navigate the market.
- Work with people you trust. Take the long view and build up relationships over time.
- You will need to localize your product/ service for each market. This may require structural changes to both product and commercial approach
For more insights on doing business in Asia, you can download your copy of The Journey East here.