Conquering the Asian mobile market the mig33 way [Part Two]

It’s not often we find Internet based startups with large user traction by focusing solely on the South East Asian market. The few
that have achieved this are, Koprol, BuzzCity and mig33. Last week, we wrote a backgrounder on mig33 – covering its transformation from a VOIP startup to a mobile social networking site.

mig33 now has 40 million users and it’s adding 30,000 – 40,000 users every day. It’s also one of the largest mobile social networking applications in Indonesia and India.

We interviewed Steven Goh, mig33′s chief executive to find out more about his perspective on the mobile landscape in emerging markets. He provided interesting snippets on why North American market is radically different, how Japanese companies are more representative of the future of mobile application market, how mig33 compares to another Singaopore-based startup BuzzCity and what’s next for mig33.

North American and Indonesian mobile usage patterns

“Americans use their cell phone very differently to the way people use cell phones in other markets. You will hear this term in America – feature phones. Lot of it is because when people buy phones in America, they buy one with a purpose. So if I buy a BlackBerry, it’s for mobile email. If I work in a place like the US, everyone has 24 inch monitors, multiple computers at home — and I use my phone as an extension of my fixed line.”

“But you go to a place like Indonesia, your phone is a concetration of your computing power.  You don’t have access to terrestrial fixed Internet and if you have access to PC or laptop, that’s because it’s a shared infrastructure. If I look at a home in California, people have 6 computers at home. If I look at a home in Indonesia,there might be the internet café around the corner. Computing power is a persons mobile phone. So as a result of that, people’s approach to phone usage is very different.”

Indian and Indonesian mobile market

“The reality is that the average incomes of people in India is like US $70 a month, it’s heavily skewed. In places like Indonesia the average income is about US $110 per month.  The reality is that US $80 to buy a phone is one and half month salary.  To buy a laptop might be 8 months salary.”

“If you look at the time and rate of economic growth, it might be 5 – 10 years before buying a computer becomes like a simple thing because it’s only one month’s salary. Just because people’s disposable income takes that long to come to that level, where buying a computer is a trivial thing. And this once again is the reason why you see the growth of Chinese handsets in places like Indonesia, there’s like 50 million of these devices sold. It’s got an opera browser, TV and FM radio.”

“What we’re finding is that as popular as mig33 is in places like Indonesia, it’s not just among the A’s (Socio-Economic class), we’re popular among the B’s and D’s. So the A’s will tend to use us more like Foursquare. There will be like 50,000 Foursquare users in Indonesia and then 10 million mig33 users. You tend to see Foursquare because the media and the journalists write about it. But the median population uses mig33.”

How does mig33 compare itself to Buzzcity?

“Firstly, we are bigger. So, BuzzCity is now largely an ad-based network and now they are doing really well in mobile advertising. Kok Fung (BuzzCity founder) is a great guy. They are doing really well at that.

myGamma which is an old community in BuzzCity is sort of a WAP based portal. If you look at our numbers and theirs, we’re substantially larger.”

What’s next for mig33?

“There are sort of two parts to this. GREE is the largest social entertainment company in Japan. It’s a $4 billion worth company. I know a lot of people are familiar with Zynga — GREE and some of these companies have been doing it longer and actually they are more interesting companies.

So, I know people like to talk about Foursquare, but in Japan companies have been doing it for five years. So lot of these new mobile news you hear from Silicon Valley are old news. Having access to a relationship with GREE, means we are getting access to the very best in mobile thinking in the world.

Having access to our partners in Indonesia is important. Sugiono Wiyono is a shareholder in Trikomsel. They are the largest distributors of mobile sets and content in Indonesia. They have got like 20,000 outlets. Having a relationship with them then means that we can then be on every single phone that’s sold. We can be on the handset economy. We’re building apps for all these phones.

Also, it complements our other shareholders. With Accel, we know the Facebook people quite well. Through Red Point, we are very familiar with Google and Android. DCM is great because they have introduced us and helped us with relationships in China and Japan. So all these relationships make for an interesting company.

It’s not the Facebook model, but the East-Asian social networking model and applying it to emerging markets.”

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