The cloud market for software as a service is growing 11% a year, and even faster in Asia. But Slack, the Silicon Valley team chat platform, caters to Western work habits and is only in English, leaving Asian audiences underserved. When quickly growing demand from Asia and Africa is expected to push enterprise communication into a $42.4 billion market by 2019, there is a gaping hole in the market.
A number of players in Asia are trying to fill the space–from ChatWork in Japan and Teamchat in India to Qiscus, Eko, Oneteam, TeamNote, Pie, Teambition and Typetalk. Line messenger has also launched its own version Line Works, though the company declined to reveal user numbers. ChatWork, claiming 86,000 companies from 204 countries and regions, seems to be looking to the U.S. for expansion.
Jandi is the leading South Korean contender, and has been working on footholds in Taiwan, Japan and Singapore. Tosslab, the company behind Jandi, claims it has nearly doubled its user base in the past year to 80,000 teams across Asia as of February, with 25% upgrading to the new premium plans, which include on-site training and unlimited messages for team members. It also claims to have 10 times the number of downloads as the next local peer and increase teams’ efficiency by over 50% on average.
“Although Slack or Hipchat have become a universal standard for startups and creators of enterprise collaboration software globally, we Asians working in the Asian workplace have a different idea for enterprise collaboration software,” says Harry Yeo from Tosslab.
That means user interface and experience should be optimized for different industries and geographies. “Even Slack mentions in its own statements that it’s not as simple as who has more features in one application, but rather whether the product and service is built in a way that actually improves how people communicate and collaborate,” he says.
Now, with a recently sealed $1.7 million series A investment led by Hong Kong-based venture capital firm Ascent Capital Advisors and local entrepreneur TicketMonster CEO Shin Hyun-sung, the startup plans to develop a private cloud version of Jandi and hire on more talent this year.
Tosslab is betting that teams in Asia that are already accustomed to all-in-one chat platforms like KakaoTalk, Line and WeChat will want the same comprehensive user feel, in contrast with the less-is-more aesthetic of the West. They have designed Jandi not only with language support for English, Korean, Japanese, and simplified and traditional Chinese, but also the familiar Asian interface, sewn into the details: the unread message counter, the chat-room board settings and other design features were simulated to feel like one of the leading personal messaging platforms.
The magic of emoji
Take, for example, the emoji or emoticon. While Western workplaces may budget exclamation marks, workers in Korea (at least) love this stuff. Company emails in are littered with smileys for every situation. While Slack, Facebook and even Tinder have harnessed the West’s savviness with GIF memes, the larger-than-life animated stickers on Asian chat apps like Line, WeChat, KakaoTalk and Between have generated a 10 trillion won ($8.6 billion) industry in Korea alone — not to mention offline character merchandise stores in Tokyo, Seoul and beyond.
“Some think emoji are not a big deal, but the reality is quite different from (Asians’) perspective. When we go out to see Jandi users or potential users, emoji is the biggest attractive point for them to use our service,” Yeo says, adding that its emoticon library allows collaboration with third parties like Dingo Friends. Even Facebook Messenger is finally exploring the magic of emoji to make the app more engaging.
Focus on efficiency
The second signature feature is reflecting the top-down hierarchy of Asian workplaces, allowing admin functions geared to help them control team communications, such as keeping track of the number of messages sent and amount of storage used. “In a flatter and more meritocratic work environment like the one that typifies the U.S. workplace, there is a strong inclination for open sharing and inclusion,” which led to the original success of tools such as Yammer and Slack, he said. “However, Asia is different – we are more hierarchical and more conservative, with employers focused not on openness but efficiency.”
That makes clients in Asia a hard sell. They are more likely to adopt a product if they personally know the guys behind it, Yeo points out. While smartphone-savvy individuals in Asia are quick to try new apps, the same does not go for notoriously bureaucratic workplaces. That’s why Tosslab has local offices in Seoul, Taipei and Tokyo. “The Asian market is different and needs a top-down approach to convince decision-makers to adopt the use of enterprise software,” Yeo says. That might be tough to scale, but the personal touch makes the difference.
But one surprising discovery through Jandi is that big companies were not as rigid as the startup had feared. While anticipating a strong reception from small and medium businesses, they expected much slower adoption from large enterprises and conglomerates bound to legacy groupware and fearing the cloud. Only 3 in 10 small and medium companies in Korea uses the cloud, according to a survey on Korean work productivity.
Business strategies must change
Times are changing, even at the biggest companies which realize there is no more comfortable dominance in a globally-competitive world. Business strategies must change, and workplaces along with them. The survey found that 76% of Korean SMEs that have no experience with cloud service planned to eventually adopt it.
Further, the startup found that while companies that are receptive to such SaaS communication services will often utilize other cloud services, the number of prevalent SaaS tools is limited in Asia and often impossible to integrate with other tools. “[This forces] customers to decide whether to use two disconnected tools or choose to replace their existing tool with the new application if there is overlapping functionality,” Yeo said.
Tosslab discovered a “huge number” of big companies inquiring about their software, which is why the company is launching its private cloud version this year. “It’s a great sign that even more conservative audiences in the mainstream are starting to recognize the importance of employee engagement and workplace productivity,” Yeo said.
Nonetheless, aside from language and cultural preferences, there’s plenty of reason to believe that Asia will be a rough battleground for SaaS. As Jariel Tan from Emerge App writes, many Asian countries are prioritizing structural development over SaaS adoption. And while pockets of the diverse continent are enthusiastically adopting tech trends like going cashless, many still have a wariness of intangible and new concepts like the cloud.