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Jakarta Post

Insight: Era of convergence and coopetition

Everyone can now conduct almost everything they want in just one single device

Fajrin Rasyid (The Jakarta Post)
Jakarta
Tue, July 23, 2019

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Insight: Era of convergence and coopetition

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span>Everyone can now conduct almost everything they want in just one single device. In fact, we can do almost everything we want in just one single app.

Since the number of mobile applications increases over time, it is becoming more and more difficult for an app to be selected as a user’s preferred app. Some of them are offering more services by trying to become super apps. Therefore, users do not need to download specific applications for the additional services they need.

This is what happens in the digital space. Convergence makes boundaries between industries become not so clear anymore.

I discussed this phenomenon with some of the participants when attending the World Economic Forum in Dalian, China, recently. I was invited to be one of the speakers at a panel discussion held as part of that event.

Major tech companies in China may be the first to implement the convergence. For example, if we look at Alibaba, it is not only an e-commerce application since it also provides digital payments, financing, a messaging platform and much more within its ecosystem.

WeChat is similar as it does not only provide a social network, but also payment systems, media entertainment, e-commerce and much more. You also could book a doctor appointment and find out how densely crowded a location is by using the platform.

From my point of view, it makes sense for convergence to occur in the mobile-first market. In the early 2000s, there was about one computer for every 100 people in China. Fast forward to today and the total number of mobile users in China is approaching the number of internet users.

That means most people in China first became acquainted with the internet through mobile devices. Therefore, it is common for people in China to do many things by using a single app on their mobile device.

Despite having different challenges in payments and logistics, Indonesia’s tech ecosystem might be quite similar to China’s. Most internet users in Indonesia are also on mobile devices. At the same time, the growth of tech companies in Indonesia is primarily fueled by the massive population and rising middle class.

Convergence not only happens in China but also in several other parts of the world, including Indonesia. Tech companies in Indonesia have their own way to solve customers’ pain points and expand into multiple services outside their core services to stay relevant to the market’s needs.

For instance, Go-Jek is no longer just a ride-hailing company since it also provides food delivery, payments and on-demand massage. Similarly, Bukalapak is no longer just an e-commerce company since we have virtual products, investment products and a warung (small stall) ecosystem. There are many examples of services that branched out from their core services.

Convergence happens more often because it is getting easier for a platform to offer more services on its established ecosystem in the digital space. By having millions as a user base in an existing platform, we can develop other services with a minimum level of advertisement to the potential customers. In short, less investment is needed for a company with a sizable ecosystem to launch new products to market.

Convergence can give companies multiple competitors they previously did not have. Google, Amazon and Microsoft were not direct competitors over their core services, but now they all compete in offering cloud services.

In Indonesia, many companies including e-commerce, fintech, ride hailing and banks are offering e-wallets on their platforms. Therefore, it’s fair to say everyone is competing with everyone in the digital payment space.

Then, what should businesses do since everyone could become a competitor? From my perspective, it is true that we can compete with other businesses in some aspects. However, it does not mean that we cannot collaborate with them in other aspects. This is what coopetition means: to cooperate in one aspect but have competition in other aspects.

Convergence allows companies from different industries to more easily collaborate with partners from other industries. For example, Bukalapak has partnered with insurance companies, investment management companies and other financial institutions to provide better services for the users.

Convergence not only makes companies see others as competitors, but also as potential partners at the same time. Instead of treating everyone as competitors, businesses leaders need to have the mind set of always thinking what kind of potential partnership we can have with other parties. Any company you name could possibly become your company’s potential partner in the future by this phenomenon.

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The writer is president and cofounder of Bukalapak.

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