CEO of Hatio Lab based in Kuala Lumpur Malaysia.
Asia’s Middle Class Opportunity
They call it The Asian Century – the roughly 100 year epoch that defines 2020 onwards, the same era that defined the American Century from 1920 until today and the British before it. Each epoch is characterized by rapid build outs of unique logistical networks unique. The British has their rail roads, shipping lanes and canals. The Americans built the Panama Canal, telecommunications and the internet. The Asian Century will be defined by a massively complex offline to online network logistics nodes spanning 4 billion people and thousands of islands.
Like every new era and the opportunity that defines it, we need new technologies and new hubs from which to deploy them.
Kuala Lumpur is perfectly placed as a logistics hub for Asia.
Geographically it’s the midpoint. A 5 hour flight from KLIA airport will enable you to reach 4 million people, about half the world’s population. By contrast, the same flight from SFO will reach only 700 million people. It’s no wonder that logistics giants like AirAsia are based there.
By 2030, 2/3rds of the world’s middle classes will be living in Asia, a combined value of $30 trillion or twice the size of the US economy today. And while household brands like Alibaba, AirAsia and Grab will be servicing those consumers, the vast majority will be looked after by small businesses. But, there are few solutions in the market that are either a) built for Asia and b) built for small businesses.
That’s where a chance encounter on vacation with family opened the door of opportunity for Bernard Hor, CEO of Hatio Lab. While in Korea, he discovered an advanced logistics platform used by Koreans that would be a perfect fit for the Southeast Asian market.
Speaking the Local Language of Warehouse Managers
When Bernard started out selling logistics software, he found warehouse managers would listen to his “pitch”, look at his slide presentations and nod patiently. They’d then go away and never return calls. It’s only when he realize concepts like “Digital Transformation” were management consultant speak that existed in another world did he also start understanding how to connect with these people.
“I threw the presentations away,” he said, gesturing towards an imaginary white board that can be found in any warehouse. “I start mapping out their business on the white board. What’s your problem now?” It’s only then that warehouse managers started to listen. People don’t buy stuff; they buy what stuff does for them. Small businesses didn’t have the budgets, skill or people to take their Mom and Pop stores and turn them into mini Alibabas. Most operated their inventories at best on paper, at worst in their heads. And importantly, even if they did, it wouldn’t be an appropriate solution. Warehouse managers don’t care about digital, digitalisation or digital transformation. They care about goods to be picked and orders shipped.
Rather than reskill and rehire an entire generation of workers who are the backbone servicing Asia’s Middle Class, we’d need a solution that works on their terms.