09 Feb Lessons From A Successful Asian Startup: How LocalBrand.co.id Growth Hacked Indonesia
While trying to figure out what makes successful founders tick, a quick search on Google would lead you to articles or interviews citing Silicon Valley titans like Elon Musk or Jeff Bezos. You are unlikely to find much information on outstanding Asian innovators and entrepreneurs, or insights from lessons learned while they were building successful Asian startups.
We weren’t satisfied with this, because we know that there is so much to learn from South East Asian startups and their founders. To start this quest to consolidate that knowledge, we thought it would be best if we got the information straight from the horse’s mouth. We spoke to Sayed, the Founder of LocalBrand.co.id, a startup which went from a simple idea, to one of the biggest e-commerce platforms in South East Asia in just three years.
Here is his story with some actionable growth secrets sprinkled along the way.
The Ideation Stage
Supply or Demand? Who Should Marketplaces Startups Target First?
Sayed: We went for supply first. We had contacts with designers and brands who already had an established customer base. The brands had a real need for our solution, because they could not sell online. As soon as the brands came onboard, they brought all their customers, so the demand side was easy.
Should Startups Go For Funding Straight Away?
Sayed: At this point, we made a mistake. If I could do it again, I would raise funds straight away. Instead, I used my own money for the company, and by the time big players such as Lazada jumped in, it was too late to call for investment. We just couldn’t compete with the promotions that they offer. Customers go where it is cheaper, and the brands eventually follow.
“Marketplace startups face issues with brand loyalty. So if you are building one I would advise getting funding early on.”
The Acquisition Stage
How Long After Launch Should Startups Expect To Get Their First 1000 Customers? What Is A Good BenchMark?
Sayed: We received our first 1000 customers within 3 months after our launch. I think 3-4 months is a good timeline to aim for.
Which Channels Worked Best To Aquire Customers At This Stage? What Strategy Did You Use?
Sayed: We were lucky to have successfully executed a few online and offline growth strategies right from the beginning.
Offline, we started Local Fest – an event to showcase Local Brands and allow offline sales.
We used the festivals to learn more about our customers and define them for targeting purposes. I would recommend really taking the time to do this if you have a smaller budget. Identify one customer type and zero in on it. Map out their journey and find out where they hang out online.
Make sure you develop the product based on what you learn from this. In our case, the customers followed fashion bloggers and influencers, so we targeted these people and partnered with them to get them talking about our service.
Which Online Channel Worked Best? How Did You Make it Work?
Sayed: We employed quite a few successful online tactics. We found the organic channels were by far the most effective.
1. Social Media. We were one of the first companies to use Instagram. Indonesia is now one of the most active countries on social media, but back when LocalBrand had just started, not many people were on there. We correctly identified the early adaptors of Instagram as our target customer, and were able to make the most of this channel.
2. Influencers & Affiliate Marketing. We defined an influencer as anyone with over 1000 followers. We built relationships with local fashion influencers early on, and got them to endorse our products. Now they have millions of followers, and we still maintain the same partnerships. These online celebs have consistently brought a lot of traffic to our site, so identifying our ideal customer as someone who follows them was a good tactic.
3. Content Marketing.Aside from targeted outreach, we made sure to leverage our relationships with influencers to drive LocalBrand’s SEO strategy as well. They wrote articles about us, and we did interviews with them. They would link to us a lot and through this, our page built authority and trust from Google quickly.
4. SEO. At the start, we focused on target long-tail keywords where the competition was low. Local, Indonesia-specific terms which had low competition but high search volume. These keywords were easier to get on the first page of Google for, and so helped to build our page authority as well as traffic.
The Growth Stage
Which Channel Brought The Highest Number of Converting Customers? Would You Recommend it?
Sayed: The mix of offline and online worked the best for us as both of these reinforced each other.
We executed one large and well-organised offline event every year. This brought us a lot of customers for the following reasons:
1. Partnerships. Every event has at least 50 partners, including those from the media. All our partners used their social media to promote us. We made sure we included this in all our agreements.
2. PR. We got media and bloggers to cover the event. We paid for some, but we also received organic coverage by using our existing partnerships with celebrity bloggers and influencers. We told the press and media about it, and many dropped by of their own accord. By Year Two, we managed to achieve an attendance of 40,000 people at Local Fest over 3 days.
Is There A Difference Between The Growth Channels Which Work Here And Those Which Work In Western Countries?
Sayed: The main difference is the timing.
“Trends tend to repeat themselves, so what was big in the US is big in Indonesia 1-2 years later. Staying ahead of this curve gave us a very effective free growth channel – Instagram.”
Indonesians are more likely to buy products from social media than customers in the US. We use these channels as a means to inform ourselves on where the demand lies, much more than US marketplaces or retailers.
Having High Customer Retention Is Often Cited As Key To Building A Successful Startup. How Do You Make Sure You Achieve This?
Sayed: Actually that’s our biggest problem right now.
In e-commerce, Indonesian startups, like those the world over, struggle to compete with the big guys when it comes to scaling.
We have loyal customers who identity with the brands on the platform, and we keep everything we do focused on these customers and what we know about them. But when it comes to retention, it’s hard to keep most people because the big platforms such as Lazada can offer promotions such as free delivery.
Customers will ultimately go where it is cheaper and the brands will follow.
What Is The Biggest Challenge You Faced? Do You Have Advise For Anyone Who May Share This Issue?
Sayed: User retention is our biggest challenge. We have overcome this by first realising that we cannot compete in terms of price with the players with a lot of funding, so we have had to change our tactics. We decided to partner with these large marketplaces instead of compete with them.
Thus, we created LocalBrandAsia, which is a connection for the local brands to all the market places and e-commerce sites. We focused on our strength – a connection with the local brands, instead of our weakness, an inability to provide the cheapest prices.
By making this move, we made Localbrand.id even more focused on our targeted customer, and created a lifestyle brand for them.
Do You Have Any Advise For Someone Looking to Create A Startup In Indonesia?
Sayed: Yes, don’t give up.
“Failure only happens when you stop trying”
It is so rare that anyone will succeed on their first attempt. Make sure you learn from your mistakes and bring those insights with you to your next attempt. So many of the companies I see here give up after their very first failure. See it as a learning opportunity, pick yourself back up and carry on.
After thanking Sayed for sharing the LocalBrand.id story, we took a little time to reflect and identify the main factors determining LocalBrand’s success in Indonesia.
We came up with two main reasons but would love to hear your thoughts.
1. Tenacity. Even when Sayed saw an obstacle which many would consider too impossible to overcome, he thought outside the box to find ways to dissolve the competition with players far greater in size and funding.
2. The right tools. In this case, social media was a crucial tool for building a successful e-commerce company. Indonesia is the one of the largest user of social media in the world. Many consumers rely on it as the sole way to decide what to buy. Identifying the right channels for their customers early on, led to early adaption to Instagram and successful influencer marketing. These tactics proved to be crucial factors to LocalBrand’s success as an Asian Startup.
If you’re a startup founder based in SEA looking for help with growing your business, let’s have a chat about growing your startup through an experiment and data-driven approach.
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