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Uber, Airbnb, Tokopedia, and Conventional Players’ Irrelevance

Sajak Akustia - 27 August 2015

Tech-based businesses currently “disrupt” conventional business doers. The disruption happens so fast, while conventional entrepreneurs move too slow. This is the new battle to win an essential market; the future. So far, it’s clear that the battle has been narrowed down to transportation, retail, and hotel sector.

Uber and Go-Jek disrupt Blue Bird and Express, Lazada and Tokopedia disrupt Matahari, Sogo, and other similar giants, and Airbnb disrupts hotel titans.

There are consumers who’re completely ready for tech-based services. Most of them are youth, tech-savvy, and most importantly, are in their productive age and part of the future. Meanwhile, those who’re not ready are elders, not that savvy enough, and with no smartphone.

Uber grants users’ wish for not standing on the street trying to stop a cab. Tokopedia saves costumers’ time by helping them getting the best deals without having to step out of their door. Meanwhile, Airbnb helps people getting rooms to stay at the best rate.

Tech-based business with peer-to-peer services directly connect those who provide the services, cut the “middle process” in which people act as broker, and distribute the goods to consumers.

This new superpower directly touches service providers and encourage them to fulfill consumers’ need, although having no legal body attached. This helps consumers eliminating barriers, including saving their time, money, and energy. Those three things are highly essential to modern day consumers nowadays.

Slowly but sure, these businesses form “consensus” and “mutual trust”. These can be seen from the ratings given by consumers toward service providers, and vice versa.

In the future, those ratings will be a fair and just indicator for certain services. It provides the image of the provider’s quality ini serving customers, or the consumer’s hospitality in completing the transaction.

If your rating is low, you need to improve your hospitality while shopping online.

Economic sharing and prosperity improvement

The concept of economic sharing applied by Uber, Airbnb, Tokopedia and eBay has helped lower middle class members who are aware enough to capture the opportunity of improving their prosperity.

Many reports on mass media cover the story of thousands of ojek drivers who gain much more money after joining Go-Jek. We were never aware that “ojek” could be used to deliver food and packages, before Go-Jek coined the idea and helps thousands of super busy people.

Ex-Blue Bird drivers who previously earned less than Rp 100.000 a day, earn much more after joining Uber. Some even are more confident to do installments to make the car their own.

It seems that peer-to-peer tech-based businesses have unleashed the potential of lower middle class. This social factor has brought tech-based business to the people as well as provided more ‘disruption’ to conventional businesses.

This is what currently happens within the battle between taxi companies and Uber: more and more taxi drivers move to Uber for more money, meaning that there’ll be more and more Uber cars, then people will use Uber’s services more often, and in the end there’ll be even more taxi drivers becoming Uber drivers.

We can imagine how irritated the conventional entrepreneurs are, seeing their business dynasty being disrupted by newborn challengers, not to mention what will happen when those newbies do steal the company’s profit in the process.

There are some conventional businessmen who retaliate by throwing political and security issues that some even brag about nationalism. This has influenced political actors as far as providing regulation to protect those conventional businesses.

However, the newbies don’t stand still watching conventional players disturbing their business. They even move faster to fulfill consumers’ needs. They dare to give massive discounts and promo to get people and partner’s loyalty, something that conventional businesses often miss.

Unfortunately, there  are still competitors to beat, meaning that those new superpowers need even more creative and innovative means to win the competition.

We can see big fight between Go-Jek and GrabBike. Then, there is one between Tokopedia, BukaLapak, Lazada, Zalora, Bhinneka, and Blibli in e-commerce segment. Finally, Uber is facing competition from GrabCar, one of GrabTaxi’s subsidiaries.

These competition between tech-based businesses corner conventional entrepreneurs even more.

Making business relevant

It’s actually not only taxi, hotel, or retail industry that gets disrupted by these tech-based businesses. In mass media segment, there are more and more SMEs prefering to make use of Facebook and Google to publish their ads rather than posting them on printed mass media that can’t properly target the audience.

In telecommunication, cellular operators’ revenue from SMS and voice services goes down after facing a serious challenge from Internet Protocol-based instant messaging and video call services.

In the midst of this huge transition, traditional companies need to make their business relevant with the future, before it’s too late.

Lippo Group has done an elegant step by establishing MatahariMall, which is filled with prominent names in the industry. Indomaret and Alfamart also start their online expansion with Alfaonline and KlikIndomaret, although their seriousness remains a big question.

BlueBird has also developed an Android and iOS-based taxi reservation app. Unfortunately, Blue Bird still outsources its services through SeatechMobile. It would be better for Blue Bird to manage the business using its own resources by establishing a specific IT division, so that the company may give fast responses toward every tech-related maneuver, like promo for instance.

There are also some giants investing at peer-to-peer tech-based companies. We’ve seen how China-based SOE China Investment Corporation and Singapore-based SOE Temasek Holdings invested at GrabTaxi.

Tech titans and financial institutions are also on the track of supporting Uber. They’re open to innovation and want to take part in enjoying the profit by speculating that an app-based car reservation service is the future of the industry.

Let’s not judge these newcomers for disrupting the order, making them the culprit of giants’ under performance. It’s not impossible to see those tech-based businesses grow even bigger as conventional titans slowly die.

Try to open your diary to see what response you’ve given towards those newcomers with all their brand new offers.

Conventional companies are still there, but they start losing their relevance and if they’re too late to respond, then they’ll be buried deep. Old players might survive, but with decreasing valuation and non-growing customers.

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