SINGAPORE: The uptake of e-commerce across Southeast Asia has been hampered by many people not having bank accounts, but Garena Group is bypassing that restriction by enabling the unbanked to make digital payments.
Nick Nash, group president of the consumer internet platform, told McKinsey that the ability to pay at a distance is "the holy grail of the internet".
And he compared the situation in China – where most people not only have bank accounts but can also easily link those to an Alipay account or to a WePay account – to that in Southeast Asia: "it's night and day".
In countries like Indonesia, the Philippines and Vietnam, between six and seven in ten adults don't have a bank account. "And even in places like Thailand and Malaysia, it's a much, much larger number than you'd think."
But over the past 24 months, Garena has been working on a solution. "And the solution is wonderfully local," said Nash.
He explained that the organisation has built a network of 150,000 locations across the region where regular earners can have their cash digitised and placed in a mobile wallet or a PC wallet.
These locations "tend to be stores within a store", he added. "It can be as simple as a small coffee shop. It could be a very large retail establishment."
"But typically, all you have to do is show up with your credentials, your log-in information or your phone number, [and] hand over baht or dong or rupiah, as the case may be. And in a matter of microseconds, that money's been uploaded to your own wallet."
Again looking to China, Nash observed how the web browser has been superseded by the chat application, which embraces content, payment and e-commerce as well as simple messaging.
"We're very similar to Tencent in many ways, but for Southeast Asia and Taiwan," he said.
Nash also suggested that Garena's e-commerce business "is not just a shopping app, it's a social network".
"You can follow sellers. You can follow other buyers, and you can track a little bit of their progress almost as, you know, entrepreneurs or friendly shopkeepers down the street."
Nick Nash, group president of the consumer internet platform, told McKinsey that the ability to pay at a distance is "the holy grail of the internet".
And he compared the situation in China – where most people not only have bank accounts but can also easily link those to an Alipay account or to a WePay account – to that in Southeast Asia: "it's night and day".
In countries like Indonesia, the Philippines and Vietnam, between six and seven in ten adults don't have a bank account. "And even in places like Thailand and Malaysia, it's a much, much larger number than you'd think."
But over the past 24 months, Garena has been working on a solution. "And the solution is wonderfully local," said Nash.
He explained that the organisation has built a network of 150,000 locations across the region where regular earners can have their cash digitised and placed in a mobile wallet or a PC wallet.
These locations "tend to be stores within a store", he added. "It can be as simple as a small coffee shop. It could be a very large retail establishment."
"But typically, all you have to do is show up with your credentials, your log-in information or your phone number, [and] hand over baht or dong or rupiah, as the case may be. And in a matter of microseconds, that money's been uploaded to your own wallet."
Again looking to China, Nash observed how the web browser has been superseded by the chat application, which embraces content, payment and e-commerce as well as simple messaging.
"We're very similar to Tencent in many ways, but for Southeast Asia and Taiwan," he said.
Nash also suggested that Garena's e-commerce business "is not just a shopping app, it's a social network".
"You can follow sellers. You can follow other buyers, and you can track a little bit of their progress almost as, you know, entrepreneurs or friendly shopkeepers down the street."
Data sourced from McKinsey; additional content by WARC staff
