Jonathan Bernstein, Interbrand Managing Director Singapore interviews Nick Nash, Group President, Sea. Nick discusses how Sea has evolved in recent years and how it is bridging the complexity of regional integration in Southeast Asia, while recognizing the unique cultural and behavioral characteristics of each individual market.
Nick, congratulations on Sea being named an Interbrand Breakthrough Brand. One of the hallmarks of Breakthrough Brands is growth. From your perspective, what have you done at Sea to grow the brand in the last few years?
Our founder and my business school classmate, Forrest Lee, was convinced that when he came back to Asia after finishing at Stanford, he wanted to build a wonderful business out of “whole cloth” and create something lasting. All of us that have joined him in the effort feel very similarly.
Our first brand was called Garena, which was short for “Global Arena.” At the beginning of our company’s history, that name, Garena, captured our ambition to build something that wouldn’t be just a single-country business. And five years into it, we began thinking about what might come next.
There was a real need to serve the underprivileged middle class of this region. There’s unfortunately a very low penetration of bank accounts across in Greater Southeast Asia. The majority of adults in places like Vietnam, Indonesia, and the Philippines don’t have a bank account, let alone credit cards, so our next platform was in payments.
Then in 2015, we launched our third business, Shopee. It’s become the largest e-commerce platform in the entire region of Greater Southeast Asia in terms of the number of orders that we’re processing every day. All along the journey, it’s been brick by brick, one cohesive strategy focused on how we could make our customers’ lives a little more happy or a little bit more enjoyable, and also help our region’s small businesses. It’s been a wonderful journey.
Why do you believe Sea is breaking through in the technology space in Southeast Asia?
Overall, Greater Southeast Asia today has a lower internet penetration ratio than China, the US, Japan, or Western Europe, but it certainly won’t stay that way forever. In fact, we believe 2016 and 2017 are the inflection point years for smartphones in Greater Southeast Asia, and all of our businesses are benefitting tremendously from the growth in mobile devices.
At a deeper level, it feels like this is the right moment in time to bring the region together. Greater Southeast Asia’s was historically a bit siloed, with companies in Thailand serving the Thai market and companies in the Philippines serving the Philippines market, and so on. Now, we’re beginning to see the whole region, all seven major economies coming together. We’re certainly not the only ones doing this, and our dream is that we certainly won’t be the last. I think one of the biggest drivers of that trend has actually been education. We’re starting to see more and more students from different countries in our region go to another country for college. That process begins a lifelong interest in learning about different cultures. We’re certainly the beneficiaries of this student import trend and we want to support it.
Aside from the typical brand challenges any company faces, there must be a lot of challenges in working across Southeast Asia—government approvals, diverse audience needs, etc. What kind of challenges do you face, and how do you manage these challenges while continuing to grow the brand across the various markets in this region?
All around the world, there are certain common threads of complexity, like government approvals and language localization. Those are clearly very important. An equally important dynamic is how to embrace socioeconomic diversity within a region. What we find is that sometimes the intuition and customer mindset that you might develop if you grew up in a country with $45,000 GDP per capita isn’t precisely the same intuition that gives you good marketing insights if you’re serving a customer in a region with $4,000 GDP per capita. So, one of the real nuances—frankly, one of our opportunities—is to figure out how to tailor products and price points and unique selling propositions, country by country, to give people the very best that technology can offer, but at a price point that makes sense for everyday budgets.
We manage these challenges by really understanding our customers. Because of our ground presence in every single one of our major countries, we can meet them face to face. Having that ground presence in every single one of our major countries gives us a degree of dialogue, empathy, intuition, and intimacy with customers that’s very special. It’s not enough to sit here at the office and get daily Excel spreadsheet reports. I’m on the road multiple days a week, along with my colleagues and members of the senior management team. That’s the only way to listen to—and learn from—our customers.
What kind of impact has Sea had on its different audiences, from city dwellers to local villagers?
It’s a sense of helping people improve the quality of their lives. When a small seller on our platform begins to notice their sales double, then quadruple, and then octuple, they can massively increase their standard of living. They can send their children to a better school or put away money for their parents. That’s extraordinary. The game side of our business is a different but also very special kind of pride. We’ve got players who are some of the best in the world at some of the most important e-sports, and it’s an amazing sense of pride when a team of 22-year olds from a small town in Vietnam ends up winning a medal. In our financial service business, there’s a great sense of pride to be the first person in your family with a digital wallet and know that to pay a bill, you don’t have to walk three kilometers to a little kiosk or a counter, you can just reach for your phone. Those are great elements of giving people self-confidence, and of course, convenience, in their lives.
Finally, in terms of the organization we are hoping to build, I think we’re giving our colleagues here in Greater Southeast Asia pride that we too can create a globally respected company.
There are many different offerings in Asia for consumers, from big players like Tencent and Alibaba, to those modeled after these brands. How do you differentiate the Sea brand and grow, considering the expansion of this landscape?
The uniqueness of Greater Southeast Asia, its geography, distinctness from other parts of the world, incredible local nuance, differences in tastes and perceptions and regional dialects, have always been formidable challenges for those from our West, our North, or even across the Pacific Ocean. There are only a few examples of companies from other parts of the world successfully building a pan-Southeast Asian business. Having already accomplished the first steps towards that goal in our three initial platforms creates a tremendous home court advantage for us. There’s an intimacy with the customer, a localized workforce, and a technology infrastructure country-by-country that’s pretty difficult for other people to recreate.
But at the end of the day, I think what’s most important for us is the fact that we’re focused on this region. It’s hard enough to get this region right even by living here and being in all of our countries; it’s much harder for this to be a growth initiative in which three or four bright young people are sent overseas to launch it out of a service office in a shiny skyscraper miles away from the heartland of our region. Staying humble is a core part of our value system, and we are always careful never to be overconfident, and we’re mindful of competition, but we certainly are grateful for some of the advantages that we have in building our business.