Why Bitcoin is Important

Most have now heard of Bitcoin because there is so much coverage of people getting ‘rich’ from Bitcoin. But the more I research, the more I realize: Not that many people know exactly what it is, how it applies to them, and why ‘Bitcoin’ is so valuable.

I put Bitcoin in quotes because Bitcoin only represents a sliver of the possibilities behind the fundamental reason Bitcoin, or cryptocurrency, digital assets, alt coins, and blockchain are so important. That said, disclaimer: If you’re here to learn how to instantly make money from ICOs, this post isn’t for you.

Let me back up a bit.

The rapid growth of the middle-class is the reason I choose to live in SEA but it also should be worrisome to the world for one reason: by 2030, it is projected that 2/3 of the world’s middle class population will be living in Asia.

I use the term Asia broadly, but these countries include, but not limited to: Asia-Pacific (Southeast Asia ie: Indonesia, Malaysia, Thailand, Vietnam, Singapore, Philippines, Myanmar, Cambodia, Laos, Brunei), and of course, China, and India. (Sources: 1, 2, 3, 4)

What this implies is if 2/3 of the middle class population is based in Asia, the economic power will start shifting, new problems and solutions for these problems come alive. Or, as we commonly hear: disruption and innovation.

My interest in Bitcoin (or crypotcurrency and blockchain technology) simply started as a curious, technologically savvy person residing in this region, as crypoto is only one of the ‘disruptive’ or ‘innovative’ technologies deriving from quick change. Within the short 4.5 years I’ve moved from the States to ‘Asia’, I’ve seen with my own eyes, massive advances.

What does this mean?

I’ve been obsessed with messaging apps, anything mobile, and SEA — specifically how technology is changing economies in high-growth nations, driving innovation from need, reducing socio-economic inequalities, and the failures of first world nations to keep up. (This sounds like a bunch of jargon but whatever. Deal with it.)

Messaging apps that started as communication utilities are now full-blown ecosystems where billions of micro-transactions from communication (messaging), payments (cashless), to things that make daily life easier (food delivery, share economy, etc.) take place on a daily basis. And this is just the beginning.

In a region where things change on close to a daily basis, conversations about currency are naturally floating about because

  1. according to the World Bank’s Global Financial Inclusion Database, over 2.5B adults in developing economies do not own bank accounts
  2. and only 20% of those living in extreme poverty own bank accounts

Source

And by 2020, there will be 1 billion new smartphone subscribers only in SEA. (source)

With the mobile penetration changes, our daily lives are impacted, as daily necessities are physically met through mobile technology. If you live in a first world, it may be hard to imagine a world where getting from point A to point B can take an entire day, since city infrastructures in developing nations aren’t designed to handle traffic and congestion. Imagine taking a day off to run simple errands, such as shopping, banking, and paying bills. Now, imagine not having a bank account because you can’t afford to pay banking fees or you don’t have a valid I.D., or worse: the nearest bank to your home requires a day trip.

Enter Bitcoin.

In regions with pain points such as the above, the notion of currency that doesn’t require the middleman (banks) is the reason investors, bankers, and smart people in fin-tech find Bitcoin so alluring.

Put it this way: If we can make free calls between San Francisco and Beijing, why do we have to pay to transfer money from San Francisco to Beijing? If it takes all day to take out cash from my bank account, why won’t I leave it in a safe under my bed unless there’s a better option? In a world where middlemen can potentially take six paychecks worth of fees, why wouldn’t I find a way to cut out the middleman and directly transact?

These are only a few problems ‘Bitcoin’ or more accurately, cryptocurrency and blockchain technology can solve. 

Do note, these are examples in high-growth nations to simply illustrate the promise of cryptocurrency, but there are a ton of first-world scenarios where the blockchain can innovate and disrupt that I’m looking to share in the upcoming months.

In the meantime, hope this post clarified what the fuss about Bitcoin is about.

Stay tuned for Part II: An Explanation of Blockchain for Non-Tech People
Edit: published! You can read it here.

Why Are We Still Carrying Wallets in 2017?

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The food court inside one of the biggest malls in Bangkok — Paragon — has digital menu boards and is cashless. This food court in this ‘third world country’ Bangkok is more advanced than Japan or America. This digitization not just aesthetically pleasing, it actually works and here is why:

  • efficient — because cash is not exchanged, there is barely a line and even the most popular spots the transaction is really fast
  • effective for SMBs — zero cash transactions with profit reconciliation at end of day, the number of mistakes are limited to erroneous input vs erroneous input + too little/less change

In Bangkok, the public transportation system is called BTS. And each BTS station also have similar methods where all the tiny stalls take zero cash and only these pre-paid cards.

How does a developing nation figure it out before the rest of the first world???

iPhone in Jakarta starring Reza

unnamed

One of my favorite things to do while traveling is talk to locals. This is Reza. He is 22 years old from Solo, a region in the Central Java region of Indonesia. Java, by the way, is stunning. Google the images and prepare for your minds to be blown. But I digress.

Reza moved to Jakarta for university, and attends school during the day, works in a restaurant until midnight every day. He has been saving for an iPhone and is planning to purchase one some time soon. Not the 6. Not the 5s even. He is excited for the iPhone 5. Right now, I don’t even know the kind of phone he has.

I didn’t want to ask him how much he makes, but according to Salary Explorer, average restaurant worker salary in Jakarta is 7,400,000 IDR a month (appx: $600 USD).

Reza is only one of the many people I have talked with, to further understand the Indonesian — well Jakartan — market.

We all know the population is high. The GDP is through the roof. I’ve questioned people’s excitement about Indonesia in the past, but after experiencing Jakarta, I must admit, I am now a believer in this market too.

Indonesian people rapidly adapt to new technologies and have a willingness to learn — even, if they cannot currently afford to own devices and such to get them online or make their day to days easier with technology. I am thrilled to be here and look forward to sharing more on the ground stories of Indonesia.

Flip-phones: Only in Japan

People who live outside of Japan find it hard to believe when I tell them: YES, Japanese people still use flip-phones. And YES, they reside in Tokyo.

Flip-phone sightings happen daily but since I get asked the same questions a lot, I finally took photographic evidence.

This particular young gentleman was in his late to early 30’s, working on his Macbook Pro. He caught my eye because his Pro was up and running with connection, owned an iPhone (see photographic proof *points below)…

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…yet he chose to e-mail from his dinosaur flip-phone.

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I wish I was slick enough to take photos of him navigating the iPhone… he was like a 65 year old man using an iPad for the first time. He held his iPhone upwards, tightly gripped with his left hand. And he was typing with one finger — his right pointer finger to be precise — but the gestures OMG. He was basically stabbing the iPhone screen, tapping the screen so hard he had to grip with his left harder and harder. So exhausting to watch… and his poor, poor phone. I almost wanted to place him under Citizen’s Arrest for device abuse.

Anyway — this is only one of the many reasons I choose to be in Asia. Mobile habits and usage are similar to those of the US in 2007-08ish when consumer Internet just started getting disrupted.

Exciting times.

LINE 101

TC just reported that LINE’s revenues have doubled YoY to $192m USD in Q3 2014. And just like that, LINE is back in the news again.

Since I seem to repeat the same answers to the same questions about LINE over and over, here is what I wrote in 2013 for TNW. The piece is about messaging apps but I  go over all the basics of LINE. From history to adoption, features, business model, etc., this should cover any and all questions so it’s really, really, really long.

Enjoy — and feel free to ask any questions in the comments.


 

Line’s rise in Japan

Take the Line story, for example. Line, wasn’t an overnight success and there is good reason for that. Line’s biggest marketshare is in Japan. Japan’s smartphone market really began growing in 2011 — some four years after the US — and analysts have found a near-150 percent rise in smartphone adoption between 2011 and 2013.

Of the 127 million people in Japan, smartphone ownership finally passed 50 million users in August, but things are developing rapidly. Japan overtook the US as the biggest spenders on apps only this week, and the market is potentially hugely lucrative for makers of popular apps.

idc japan 520x279 Silicon Valley, you are tardy to the messaging app party

This market shift also affected Japan’s text-based communication.

Text-based communication in Japan is very different from the US and other parts of the world. Japanese telecoms have advanced emailing systems, where carrier-issued email addresses are attached to every mobile number. The email system functionally operates like SMS: simple, free and unlimited. SMS in Japan is charged per text, so before mass market smartphone adoption, text communication was done by keitai meru (cell phone mail).

With the rise of smartphones, apps quickly became popular. As users got used to beautiful, gesture-based UIs, text-based cell phone email no longer fulfilled their needs. That’s when Line started gaining serious traction. People go where their friends are and Line happened to be in the right place, at the right time.

Line changed Japanese mobile communication.

And it’s easy to see why people quickly adopted Line. An Internet connection gives users free unlimited voice calls, unlimited free messaging, unlimited instant photo sharing, group chats and video communication. The interface is cute and Line is very easy to use, but, most importantly, it offered a solution to the ‘pay for all and everything’ Japanese telecom model — and Line disrupted the Japanese mobile industry.

line 300m 730x588 Silicon Valley, you are tardy to the messaging app party

Continue reading

Internet Power Balance Shift to Asia

P1-BR340_AINTER_G_20140916174816

The WSJ had a nice piece breaking down the mega internet companies of the world — of course US leads the pack but Asian companies aren’t doing so shabby either. China is of course leading the ‘Asia’ pack due to sheer population volume. Seriously, file that under no shit Sherlock.

But there were some fun factoids:

  • 45% of the world’s nearly 3 billion internet users are in Asia
  • WeChat (owned by Tencent) has about 440m users
  • Tencent’s profit margin in the second quarter was 32%, compared with 27% at Facebook and 21% at Google.
  • Tencent’s stock-market value is $148 billion, compared with Facebook’s $194 billion.
  • LINE (Japanese messaging app) had revenue of $323 million, 16 times the estimated revenue of WhatsApp.

…separately, it’s really funny how ‘tech journalists’ don’t seem to understand the products they are writing about. This particular author, said WeChat is WhatsApp’s rival. No. No. No. I can not say this enough times: they are two very different products. WhatsApp is a communication utility – a tool. WeChat is a full fledged platform, an ecosystem.

The author also calls LINE stickers ‘cutesy emoticons’ — which further highlights the lack of understanding of mobile behavior in Asia even after NYT wrote about it!! (Pretty embarrassing).

Oh well. I guess that’s why there is a need for someone like me or Jon Russell of TNW and a dedicated publication like TIA to pipe on about this region.

Only a few reasons I love emerging markets

During conversations with one of my favorite VCs and separately, with one of my favorite tech bloggers, services I never heard of were brought up. I also learned a few things I’m just going to leave here — more like a note to self — before I forget.

Old age, the struggle is real.


 

Opera still has 300M MUAs.
Opera Mini (the mobile browser
– Indian users of the Opera Mini mobile browsers used 75% less mobile data in the first half of the year
– is compatible with over 3,000 mobile devices, dumb phones and smartphones
-works on basic Java to the latest Android and iOS platforms

Wow – who knew. It’s such a perfect browser for emerging nations where cost and access are barriers source


 

Random thought: I wish I was passionate about logistics. So much money and room for disruption there. Imagine “between x and y is z” (where x, y = time and z = service ex: delivery, internet, cable, food, etc) is non existent. Time is precise. Or in plain English, parcels will be dropped off and service rendered at exact times.

The solution would involve an algo that calculates most cost efficient delivery radius in a way that’s never been done before. Combine that with a notification app like Yo, that’s a billion dollar business right there. And I believe the solution will come out of Asia.


 

Binu Screenshot_9_15_14_9_26_PM

Which reminded me of Frontline SMS Screenshot_9_15_14_9_28_PM

 

Google APAC has WiFi enabled rickshaws to help people go online

*Pardon the lazy post

Someone Disrupt Japan Please

I randomly watch this Call Me Maybe Chatroulette video when I recall it, because it never fails to make me laugh.

Today I needed to escape from all the Apple news and was happily watching it, dancing away, and noticed on the recommendation side tab, another Call Me Maybe parody from a super popular Japanese pop idol, Rola.

baa50c8044a6ce46f03349e335749bd8

 

That’s Rola – she’s cute, pretty, and super funny. I’m a fan. So I clicked on the video of her lip synching to ‘Call Me Maybe’ and laughed out loud. Universal Music Japan (her label I guess), put the video up. I mean, it’s a lip synching video, what the hell, why couldn’t she put it up herself?

There are so many other ‘Call Me Maybe’ lip synching renditions by famous people like the Bieber+Selena Gomez+Ashley Tinsdale or the one by The Roots and Fallon — uploaded on YouTube not by their labels.

Japanese companies strong hold content so much, there are close to zero streaming services. Almost the entire population has no idea what Spotify, Netflix, or Hulu are. It’s really quite sad.

Looking forward to the day all this changes. Perhaps in another 10-15 years LOL
Oh, Japan.

 

Global Mobile Payment Market

To further reinforce the previous post on the mobile payment market, I came across a BI deck on the The Future of Mobile Payments.

1. Might be difficult for people in developed nations to digest, but in emerging nations, billions of people don’t have access to banks.  Southeast Asia is leading the pack:

enjoy-our-deck-sign-up-for-bi-intelligence-below

 

2. Global share of payment opportunities in these emerging markets are beyond ridiculous. YoY of MENA is the steadiest, while Southeast Asia and Latin America are predicted to steadily grow as well (granted, these numbers seem to be pulled from Cap Gemini — would be interesting to see Merrill Lynch, Morgan Stanley and GS’ predictions)
jpg-1

 

3. And of course, global numbers of mobiles — billions of handsets, most still feature (flip phones or the ancient Nokias). What this means, is, citizens of emerging markets are reliant on capabilities away from smartphone apps we in developed markets are used to. Ex: M-Pesa is the first that comes to mind. Their major market share is Kenya, Tanzania and they are increasing efforts into Middle East (Afghanistan, South Africa, India and Eastern Europe, respectively).

jpg

 

Neat tid-bits I’m digesting with a grain of salt. The market can rapidly change, especially with the amount of funding going into Bitcoin ventures, the payment sector in developed nations is unpredictable. The question lies, would the trend trickle over to emerging markets? Distribution of wealth amongst emerging markets is also a factor (ex: even if Indonesia has highest GDP, population of <1% of the population are the only ones with purchasing power, would it make more sense for a startup to look at Thailand first, where spend per population is more evenly distributed?) And so on and so forth, there are still many, many questions.

Biggest takeaway though is how Southeast Asia is still up for grabs for payments. I really want to see young entrepreneurs beat Rocket Internet and SMART’s initiative in Southeast Asia. Exciting time to be in APAC and especially, SEA as technology is still very much in its infancy.

See the entire slide deck on BI’s site here.

Mobile Money

Leaving the US has opened my eyes to a lot of things, especially how the world outside of America operates. Because the iPhone isn’t as adopted in other parts of the world, there are many solutions to make communication between iOS and Android possible — which is why I became so fascinated with chat apps.

Then, I fell into the chat app rabbit hole and became obsessed with learning, using and following the big players outside of the US: WeChat, LINE, Kakao and WhatsApp. Which lead to learning about the different use cases and the reason I keep piping on about how SnapChat, WhatsApp, FB Messenger are not like WeChat, Line and Kakao. I also argue WeChat is in a league of its own. (If you’re interested, my messaging app series is here). Living in Asia, it’s easier to appreciate various ways people and cultures use their mobiles as I am an actual user vs. reading about use cases.

When I visited various Southeast Asian countries with Dave McClure’s Geeks on a Plane tour, my mind was blown. In countries still considered emerging nations ex: Malaysia, Thailand, Philippines, Indonesia, the way phones are used are so different. Actually, everything is different. Most mobiles are pre-paid. Mobile internet connection is mostly 3G and the majority of the population still uses flip phones. I even saw old Nokia phones with the green, pixelated screens. Remember those? I was really good at Snake. Reading and researching about mobile, I was aware of the numbers but to actually see how low smartphone penetration actually was, is a moment I will never forget.

The biggest opportunity I see in emerging nations is how technology is solving dual objectives: social problems and monetization. And the biggest opportunity I see is in mobile payments. I’ve said it once and will probably keep repeating, that because WhatsApp has capabilities on flip phones and older phones, their biggest missed opportunity is moving from a communication utility into a full fledged platform.

I really wish I knew more about payments or was passionate about the topic enough to jump into creating a product. But I am, super excited to see who will be the first to solve across SE Asia.

qz really sums it up best:

At the end of April, nine mobile operators with 582 mobile connections across 48 countries in Africa and the Middle East committed to make their mobile money offerings work across their networks. With interoperability comes greater cohesion and opportunity for new services.

And the kicker:

If it’s done right, it could form the foundation of a whole new global financial-services industry. And the US and Europe will be far behind.

Read the entire post here

Southeast Asia

Quickly: I joined Dave and Geeks on a Plane in Manila last minute. Justin Hall of GG Ventures best sums up my take away of Manila:

Screen Shot 2014-07-27 at 8.21.24 PM

 

…which further enforces what I’ve been thinking about since coming back from Singapore and Bangkok. “Is a country’s GDP an accurate indicator of potential when it comes to startups from emerging nations?”

Manila particularly stands out to me, as the community is healthy and enthusiastic. Founders work together, there is a pay it forward type culture I haven’t seen elsewhere. This type of camaraderie is reminiscent of Silicon Valley around 2006-07ish, before the startup ecosystem blew-up.

Potential capital is of course, first and foremost the thing investors look at. But as someone who believes in the power of mentorship and how entrepreneurs nurturing other entrepreneurs is one of the main reasons why Silicon Valley is Silicon Valley, GDP shouldn’t be the only thing people focus on when it comes to building products. This is why to me, the Philippines is the country I am the most excited about in Southeast Asia.

Either which way, now is the best time to be in Southeast Asia, as the ecosystem is still in its infancy.

Added: just came across the blog of Oliver Segovia, founder of an eCommerce company AVA.
Aside from building a great platform, turns out he is an author of several books and blogs as well. He has an essay on the Philippines’ ecosystem and his vision of the innovation economy there. If you are the slightest bit interested in SEA, this insightful piece lays out the Philippines: “A Vision for the Philippines’ Innovation Economy, & a 4-Point Plan to Achieve It (and why it does NOT include Venture Capital)

Example Mindset of a Sexist Society

It’s bad manners to put someone on blast but this is just too much.
Over on Facebook, there is a discussion going on about Japanese politics, our Prime Minister Abe and this feminist movement he is attempting to push. One of the commenters was so far out there, I just had to document.

Take a look:

Screenshot_7_23_14_10_13_AMScreenshot_7_23_14_10_10_AM

 

This part is the most peculiar:

Why women would desire to enter the rat race of capitalism is beyond me, but many men are also duped by the compulsion to maximize filthy lucre as their narrowly conceived contribution to society.

So, as far as I’m concerned, Japanese society is not hurting for its unwillingness to put women in the front lines.

Wow. Just… wow.

This is the type of mindset sexism breeds. Until moving to Japan, I had no idea. I am so fortunate to have been raised in the US, where this type of thinking and ignorance are rare.

This is also the reason it is so important to keep fighting for equality and diversity, no matter gender or race.

Absolutely incredible. And frankly, a bit sad. No wonder this guy chooses to live in Japan. God.
Note to self. Companies to avoid:

 

Screenshot_7_23_14_10_11_AM

 

 

This was my Tweet in response to the article by the way:

Screenshot_7_23_14_10_14_AM

 

…and for a more personal experience, you can read on here.

 

 

Indonesia 101

Indonesia 101

A huge part of me is kicking myself for not participating in the Jakarta leg of GOAP SEA 2014 — what a fascinating market.

Quick rundown:
– Indonesia is the number one GDP country in Southeast Asia
GDP (PPP): $878 billion USD
Thailand is second in SEA with GDP of $643 billion USD

– Indonesia is the fourth country with highest GDP in Asia
China is first in APAC with $8.2 trillion USD
Japan is second with $6 trillion USD
South Korea is third with $1.2 trillion USD
Indonesia $878 billion USD

– Indonesia is the 4th most populated country in the world
population: 252 million people
the US has a population of 318 million people

– Indonesians spend a lot of time on the Internet, mainly on desktop / laptops. Mobile is still at its infancy.

Screen Shot 2014-07-22 at 4.04.19 PM

– eCommerce transactions are completed by bank transfers. No cash is exchanged. The interbank transfers are free because of the Bank Indonesia Act (BI Act) *if you’re interested, there is a legal document here explaining detailed legalities.

– GS predicts eCommerce will grow the most in SEA in the upcoming years

Screenshot_7_22_14_3_35_PM

– Under a revised law, Indonesia just increased foreign VC money allowed from 80% to 85% source

I was at first a little puzzled by Justin’s assessment that Singapore and Indonesia is where a majority of the VC funds in SEA would be focused, but I think I get it now. There are parts of me that wonders if Indonesia’s market could still be premature, with such low Internet / mobile penetration rates. And Singapore is too small but I still have so much to learn. Wishing I discovered this region sooner and I can’t wait to see Indonesia for myself.

*above sources not linked in post: 1, 2, 3, 4, 5

Thank you, Singapore and Bangkok

Still parsing thoughts from my 12 days in Singapore and Bangkok. I loved everything about Singapore — from the diversity, food, city, harmony, it truly is, a melting pot. Bangkok absolutely blew my mind. I couldn’t help but be that girl, walking around with her mouth wide open. I spent an extended time in the Philippines (Manila and the countryside of Southern Philippines) a while back, so I should have been used to an emerging nation… in theory. But I don’t know what it is about Bangkok that at first, made me a bit uneasy.

Then, I got used to it, and fell head over heels in love. There is so much energy, stimulation and there are movements happening in various communities, industries, that I was very fortunate to see first hand. It’s a bit of a bummer that it seems as though no one is telling the stories, so I definitely plan to do so. I hope I can do it justice.

My initial takeaways:

– Singapore is very developed and civilized
– Bangkok is an emerging nation, yet not as messy as say India, China, or the other BRICS
– there are massive opportunities in both nations
– and there are still many, many, more regions I need to see

The majority of my time was spent as a holiday, connecting and re-connecting with the friends living in SG and BKK (most in the food industry). I will chronicle my learnings on hi.co.

I also had the great fortune to meet and travel with so many great people. I cannot thank Dave McClure and the entire 500 team for allowing me to tag along for portions of it.

Until I get everything out here or on hi, I will leave you all with this tweet which basically sums up how I feel about SEA.

Screenshot_12_7_14_12_41_AM

SEAsia Messaging App Share

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LOTS of opportunities in SEAsia.
To recap on LINE:

  • 60% of LINE’s revenue came from the mobile games
  • LINE was the world’s top app publisher by monthly revenue
  • LINE Posts $143 Million In Revenue, Up 123% Year-Over-Year
  • $1.5mm USD revenue for user generated sticker marketplace

Granted, we may not see the same sorts of revenues from SEAsian countries, as most are developing nations and notorious for not spending (ex Path is Indonesia’s largest market, yet they never boast revenues or lack thereof).

The next few years will be fun to watch as chat apps mature and become more dominant.
(Sources 1,2,3, image via here)

 

43.3% of Japanese use LINE Professionally, 29.6% use Facebook

20140407_9

 

Wow — I knew messaging apps are huge in Japan but it still astounds me to see numbers.
43.3% of those in the sample pool use LINE professionally.
29.6% use Facebook as a professional communication tool.

Skype is 12%
KakaoTalk 6.1%
Followed by LinkedIn, Viber, communicator.

I guess as Hiroko Tabuchi of the NYT reported: “It’s just easier when a bear says it.”
*above stats provided by MMD — a Mobile Marketing Data Labo, a research company in Japan.

Charts: Global Internet usage

I had to blog this vs tweeting  — it’s just too good not to share.
Take a look:

share-of-population-that-has-never-used-the-internet-2013_chartbuilder

  • 20% of Europeans have never used the Internet.
  • 34% of Italians have never used the Internet — via qz

Granted, there are still 13% of American adults in 2014 don’t use the Internet [1] but these numbers still astound me.

Then there is Asia — and I loathe using ‘Asia’ so loosely because Asia is BIG — but they are the global leader in online growth: 42% APAC vs 27% Europe — Comscore Asia forecast (PDF)

This is also a good opportunity to revisit the scope of technological adoption and revenues coming out of Asia.
Parallel with online growth; the increase of mobile traffic, combined with mobile revenues makes this region, the most interesting when it comes to disruptive technologies + monetization.

ChartOfTheDay_1088_Percentage_of_global_page_views_from_mobile_devices_n

 

Asia includes the following four countries: China, India, Japan and South Korea. Those four countries account for 66% of Asia’s population, 60% of Asia’s mobile connections and over 70% of regional mobile income. Four markets, four countries with four very different ecosystems.

China = population of 1.4 billion people, GDP of 8.2 trillion USD
India = population of 1.2 billion people, GDP of 1.84 trillion USD
South Korea = population of 50M people, GDP of 1.13 trillion USD
Japan = population of 127.6M people, GDP of 5.96 trillion USD

Then, there are the smaller countries with high GDPs and/or high population like: Hong Kong, Singapore, Taiwan, Thailand, Indonesia, Malaysia, Philippines, etc., etc.

To put that into perspective, the US has a population of 314M people (double Japan) with a GDP of 15.68 trillion USD. Compared to the big four Asian countries (Japan, South Korea, India and China), the US has been ahead of the race as far as development, access and economic distribution. This development gap the US has, is significantly wider with India and China than the gap the US has with Japan and South Korea, but the US is still ahead of these four countries.

WSJ just reported China is projected to overtake the US in mobile revenue [2] but as I said here, Japan should be the market to pay attention to, as

  1. smartphone penetration is still low
  2. spend is high — and keeps growing

Looking at global run rates and stats, it’s all about Asia and realistically, which markets and ecosystems one can penetrate.

 

 

 

Japan App Store Rapid Growth

Startling facts:

  • Japan app store is expanding faster than expected, especially for apps outside the top 3-5.
  • by Mar 2015, a #10 ranked game will earn ¥1.7bn/m, which is the same as #2 earned in Nov 2013

 

State of mobile in Japan:

Screen Shot 2014-04-10 at 4.13.16 PM

 

 

  • Japan has 10x the USA’s population density, used to spending with carrier (payment) settlement since the 90’s (with iMode)
  • over 30% of households are one-person == spend more on entertainment vs family

Innovation has come to a halt in Japan and indeed on the surface it may seem that way as Japan has always been known for their hardware: Sony and Nintendo the two leaders at the helm.

However the Japanese people are still spending and looking to spend. They are the users and ultimately, paying customers, even if Japanese companies like Sony and Nintendo fail to deliver ‘innovation’.

Isn’t spend more important than who or what is actually delivering?

When I see figures like these:

non-Japanese companies listed in Japan
1991 = 127
2014 =  21

I can’t help but to be baffled. I get the allure of the BRIC countries but China and India are such unique markets with distinct ecosystems. Why wouldn’t a company want to come to a country with consumers who are looking to spend?

One thing is for sure — like I keep repeating — the world is not going to know what hit them when Japan’s smartphone market finally matures and the numbers that will come out of this country will blow people’s minds.

There is still massive opportunity in this country and one of the biggest reasons I am here.

*above from Japan/Korea Market and Japan App Store Macquarie Research reports unavailable to public.
Listed companies in Japan via The FT

Popular Communication & Messaging Apps by Country

I spent the past week reading forecasts and reports from Goldman Sachs, McKinsey, Morgan Stanley, Deutsche, etc., etc.

It sounds a bit boring but really not. It was actually fun to read, consume, compare and contrast the different reports.

Quick takeaways:

Deutsche Engagement

Deutsche’s chart of messaging apps used in Brazil, Russia, China, South Korea, Japan and the US.

culture and distro

 

Cross referenced with AppAnnie’s spend by country chart tells us:

  • S. Korea consumes and spends on content. Kakao Talk’s success is likely due to that ecosystem.
  • Japan leads in gaming, explaining the success of gaming companies as Capcom, DeNA, Gree, et al., and the reason the Japanese spend the most in both Google Play and iOS stores. Also explains success of LINE
  • US has wide range of content spend but the US is a distinct market from the rest of the world with different economical factors.

This chart also from App Annie interests me more, as it shows spend vs device:

Device per spend

I agree with Goldman Sachs, stating BRICs (Brazil, Russia, India and China) are 3-5 years away from global scaling and spending.

South Korea, with the highest spend and technological advancements, is like China where the ecosystems are so tightly intertwined it’s a tough market to penetrate. Fun to watch, but just like China, certain models and strategies cannot be emulated because of the reliance on proprietary strong holds.

For people looking to enter markets, Japan, UK and US are the likely bets. Or at least if I were a VC, that’s where I’d be placing bets.

Still digesting but as my thoughts parse, I will be sharing.