Doing business in Asia is fraught with unknown pitfalls and challenges. Trent Brown, CEO of subscription billing and payments company Ezypay talks about his approach to expansion and doing business in Asia. Ezypay now offers subscription payments service in 6 different Asian countries plus Australia and New Zealand, so Ezypay CEO Trent Brown is well positioned to share his experiences.
“Planning: We spent several years understanding how to operate and how to manage our business in Asia before we actually executed a strategy to perform transactions”
The market in Asia Pacific is a hard one to crack, but with Ezypay’s services being widely available in 6 counties (and counting), you can say that they know the secret behind breaking into the Asian market. Ezypay is an Australian subscription billing company set to conquer Asia Pacific. The Ezypay subscription billing product is very popular with fast growing Asian companies.
Q1. How popular are subscription payments in Asia?
They have been reasonably unpopular. What’s changing is that a lot of start-ups who are doing business in Asia are now exploring the concept of subscription payments. What you’re actually seeing is that there is maturity in a lot of the Western markets, like Europe, U.S and Australia, as opposed to Asia where there is market immaturity. The growth in subscription billing in Asia Pacific is coming largely from the start-up community. These start-up businesses offer a range of products and services such as subscriptions for luxury goods like beauty products and cosmetics, food, pet products, and even Japanese toys are available on subscription (believe it or not). So I guess it’s more the obscure things that are building the subscription economy in Asia, but as that permeates and people see the value of recurring income and having that stable revenue base, I can see that it growing in popularity and more people taking it up.
Q2. What are the benefits of subscription billing for fast growing companies in Asia Pacific?
The biggest benefit of subscription billing in Asia Pacific is to ensure a consistent level of cash flow. Unlike a term based product or a once-off sale whereby you get the revenue, then you spend the revenue and then you’ve got to go out and find more sales to get more revenue, what subscription payments do is they offer you an ongoing revenue stream.
It also removes the re-sale process. A subscription removes that re-sale need as it has an ongoing life beyond the initial 12 month term of the average contract, unless the person chooses to cancel it, so I guess it creates momentum in businesses and enables them to grow faster. Of course, then it’s easier to match your expenses with your income as well.
Q3. Ezypay is an Australian company, but over the years it has expanded into other countries, including Asia, and more recently to China. Why did Ezypay decide to tackle the Asian market?
Principally we decided to expand our services to Asia because of the opportunity. There are two options to choose from: we could either head into mature markets where subscription billing is popular and compete in those markets. Or we could take the opportunity we saw to service businesses in an undeveloped market such as Southeast Asia. So we decided that doing business in Asia was the direction we wanted to take.
Another reason is because we already have established premises in Kuala Lumpur, Malaysia. That has enabled us to understand the market place. We spent several years understanding how to operate and how to manage in Asia before we actually executed a strategy to perform transactions. Some businesses underestimate the pre-work that needs to be done when entering a new market and particularly doing business in Asia. The difficulty is that the barriers to entry are very high. It’s not as developed as a lot of the Western markets so things take a lot longer and are a lot more tedious as a result. A lot of businesses that enter that market feel the pain of that and give up. One of the reasons we chose to enter the market was we felt that if we embed ourselves in the environment we could take that pain away for other businesses. We are not only providing the benefits of the services, but we are providing the security around the service, which is one of the other reasons businesses use our payment service. We are actually taking the pain away from doing business in the Southeast Asian region.
One of the unique things about Southeast Asia, is that if you’re in one country in Southeast Asia, you are most likely to be in multiple countries. This is similar to Europe in way, although Asia is not as developed in its financial and banking systems. As there is no interconnection between the countries, quite often you get a financial institution in one country that is managed separately in another country even if they have a branch. The difficulties of establishing in one country alone are quite high, so to do it in multiple countries is an absolute nightmare. What we do is create opportunities for businesses to circumvent that and remove those barriers of entry to make it a speedy and easy entry into Asia. We saw this pain point that businesses face in expanding beyond a single country in the region by western countries and people who are actually residing in Southeast Asia, as our opportunity to introduce subscription billing in Asia Pacific.
Q4. Do you have any plans to break in to Europe?
At the moment our focus in on doing business in Asia however we have access to process in 30+ countries so whilst we are looking at the European countries, we are waiting for the right opportunity to enter there. If the right opportunity comes along then we will certainly look at those, and we have actually do have the capabilities to do it, it’s a matter of focus at the moment and we see the south east Asian market as the place to be.
Q5. Is the Australian market different to the market in Asia Pacific, and how so?
“Language is one of the biggest differences between the Australian market and the Asian market.”
There are also cultural differences that are usually underestimated by businesses. People can actually get quite offended if you’re not willing to support them in their own language. So once again, you have this situation where you’re trying to build a marketplace, but at the same time, you don’t have tools to actually do that, so what Ezypay has tried to do is to try and change these parameters we are actually supporting people in their own language and in their own currency. I guess, the other thing is, as I said before, proximity. If you are in one country and in another, you need a single application that is able to deal with all the complexity that comes with it.
Q6. What are the biggest challenges you face in doing business in Asia?
I think one of the things that is also underestimated in the Southeast Asia market is language and the difficulties with that. Locating ourselves in Malaysia helped solve a number of problems; we can deal with all the Indian dialects, the Chinese dialects as well as Bahasa Indonesia and Malay.
To help face this challenge, we also have multiple currencies and multiple language support in the Ezypay billing application. We are well-positioned to do this which is really beneficial when breaking into the Asian market because with most providers that offer gateways and other support into Asia, it must be done in English. We are able to differentiate from other providers because we have the capabilities, both from a technical point of view in the technology that we use to do multi-currency and multi-language, but also in terms of the people we have working with us and support systems have multiple languages they can use.
“Regulations: Another challenge of subscription billing in Asia Pacific is regulation. Each country is very different so actually meeting the regulation in every country can actually be quite tedious.”
When we establish our service in a country, we go through a set of rigorous regimes to ensure compliance in those countries, and that means that we are able to offer that benefit to the clients. It’s all about simplifying this and making it easy. It’s giving you a single application that can be in multiple countries with multiple languages in multiple currencies. And it’s supported by people that understand those marketplaces and who can speak the right language.
Q7. Why would a fast-growing company in Asia choose Ezypay as their subscription billing business?
We have a unique proposition in that we settle money to multiple people in multiple currencies. There are many business structures where the business may need to pay sales commission, franchises that have overseas entities that they need to pay franchise fees to. As an example, if you collect $1000, then 50% of that might go to a local agent in Singapore, they might have a franchisee in Malaysia that needs to get 30% and then 20% goes to the U.S. so you’re able to send money in multiple directions in multiple currencies. The effort in actually doing that and calculating that and working it out is very difficult for businesses as they scale so what we’re really doing is we’re actually taking that ability and automating it, enabling people to scale in Southeast Asia. You could say that the biggest benefit we provide is allowing companies to internationalise quickly and easily.
Q8. What advice would you give to companies who are looking at doing business in Asia?
Doing business in Asia can be a huge challenge. I would suggest that you need to do a lot of research. You also need to speak to people who have been doing business in Asia for a while. They will have specific insights and advice that will be very helpful. Make sure you understand the regulations in whatever market you go into. Lastly find the right partners who will help you move your business into Asia – such as Ezypay.
If you would like to find out more about what Ezypay can do for you, please contact us for more information.