Home > techcrunch > If You’re Not in Pain, You’re Not in an Emerging Market

If You’re Not in Pain, You’re Not in an Emerging Market

October 31st, 2010 10:30 admin Leave a comment Go to comments

title="luxury-lifestyle" src=
alt="" width="300" height="262" />
JAKARTA–It was only a
few days ago I was sitting in a wheelchair getting a blood

It was Friday night in Singapore, and I was at Clarke Quay– a
pseudo-outdoor mall of clubs that was like a smaller scale version
of the Las Vegas strip frequented by Singaporean college kids,
goofy Western expats and hot Asian girls, mind-bogglingly shimmied
into too-tight dresses.

Everything in Clarke Quay — and Singapore for that
matter– is highly competitive, and the clubs rotate in and
out of business. So to stay popular, it’s important to have a
gimmick. There was Highlands, the scotch bar, where the waitresses
wore short kilts and the chandeliers had antlers. There was Lunar,
where the gimmick was simply being “cold”– indeed
that can be a novelty in Singapore’s sweltering heat and
humidity. Then there was the Pump Room where a large cross-dresser
belted out tunes, in between the thumping techno music.

But I was at the most over-the-top, a bar called Clinic. You sit
in a wheelchair, and you get your drink in the form of an IV–
with a name like the blood transfusion–delivered by a young
nurse. Want a shot? It comes in an oversized plastic syringe. It
felt a little wrong– I mean, I’ve seen enough of Asia
to know people could have used those medical supplies for more than
partying. But there I was nonetheless, doing wheelies and sucking
on an IV.

It was the essence of Singapore: An Asian themepark developed
for Asians who want a Western lifestyle and Westerners who want an
Asian lifestyle– but can’t quite commit to either. A
true sign you’re in Singapore? I didn’t have to use a
single squat toilet– even in the dodgier areas of the city.
In Asia, the toilets don’t lie.

Singapore times how long it takes to get through its immigration
line, obsessive trying to get it under 11 minutes. I breezed
through on arrival and departure. “I’m here because of
the airport,” said KF Lai, founder and CEO of BuzzCity, an ad
network that monetizes the throng of mobile users in
Singapore’s chaotic neighboring nations. Compare
that to Jakarta. I arrived Saturday and despite being on one of the
only arriving flights at that time, I stood in the immigration line
for about 45 minutes.

It’s not that Jakarta doesn’t have its Western
bubbles. But they’re smaller and colliding with the
city’s larger reality much more frequently. The walk in
between the comfortable apartment I’m borrowing in Jakarta
and the cavernous, Western shopping mall, the Grand Indonesian,
took me through a sprawling slum and along streets so jammed with
traffic, I almost got clipped by a motorbike a few times. My first
day in town, walking through the slum– getting deeper and
deeper as I kept taking wrong turns– I stuck out like a sore
thumb. A big, tall, pale-white American woman who only knows about
three words in Bahasa. One of those was “pulsa,” which
means “credit.” I was wandering this neighborhood
seeking a top-up on my pre-paid SIM card– something that is
ironically easier to do in the slum here than in that opulent

This is the disconnect of Southeast Asia right now: There is
enough of a middle class that Western companies want to be
here– and Web companies want to make sure they don’t
miss out like they did in China. But a place like Jakarta is still
a Wild West. A neighborhood like the one I wandered through is so
far from the consumer reality in the US– it’s hard to
imagine the opportunity is as big as it is for Western companies.
Trying to do business in Indonesia, particularly in the Web space,
is about vacillating between the fear that
it will take another ten years to build a $1 billion Web business
(ala India) and the fear that it’ll take off overnight
without you (ala China.)

Progress on this kind of scale is just messy and
putting a comfort bandaid on it only hides the issues and the
opportunities. Almost every day in Jakarta
there’s a protest in front of the city’s Soviet-esque
Welcome statue, that people get plenty of time to look at because
the roundabout is always clogged with traffic. It’s the
incarnation of democracy and capitalism: Democracy means people
dissent and capitalism means everyone who can afford a car wants a
car. In my opinion, parts of Jakarta can put on a better face than
India– where there’s been so much rapid urbanization
the big cities are an out-of-control infrastructure mess. But
plenty of Jakarta is scary and unpredictable, plagued with poverty
and corruption.

It’s this disconnect that Singapore is hoping to bridge, a
sort of economic and cultural translator for the West. And on
paper– and in a few industries that I’ll detail in my
next post– that makes sense. Singapore is, after all, just a
short flight from India, China, most of Southeast Asia. And because
it is 40% made up of immigrants, you can find a lot of local market
expertise on the tiny island. But is Singapore really that much
closer to the market? Physically yes, but don’t kid
yourself– if it’s this comfortable, you’re not
experiencing an emerging market and you’re not going to
understand your customers. You aren’t going to understand how
the five-tower pricy apartment building I’m staying in sold
out in a flash, how the Grand Indonesian was packed with
affluence-seekers on a Sunday afternoon and yet how so many people
on the walk in between still live like it’s 100 years ago. If
that’s what you want to understand in Asia, Singapore might
as well be on the moon.

Sure, Singapore is growing at
an economically drool-worthy 18% a year but
that’s not because of an exploding middle class climbing the
prosperity ladder. Lai and others tell me between 50% and 70% of
the economy is in providing comfort for the region’s wealthy,
whether it’s five-star hotels,
expensive expat penthouses
, or the real cash king–
financial services for offshore money. Singapore is like a summer
camp for the region’s rich, and that’s mostly who
you’ll find there.

There’s just no hack around the pain of building a
consumer business in emerging markets. Living in Singapore
won’t teach you the market, any more than living in an expat
enclave in Jakarta will. Without experiencing the pain and
frustration of everyday life, you can’t understand this new
customer. Like the old West, it’s exactly that unstructured
inefficiency that creates so many opportunities. By the time
problems like local talent, infrastructure are all figured out,
you’ve got China– a place where local companies have
grabbed most of the opportunities.

Source: If You’re Not in Pain, You’re Not in an Emerging Market

Related Articles:

  1. Could Cloning Groupon Give eBay New Life in Emerging Markets?
  2. How Singapore Could Become the Most Important City in the Emerging World
  3. Physical Pain and Emotional Pain Use Same Brain Networks
  4. Foxconn Thinks the iPhone 5 Is a Pain
  5. Ask a VC: The Southeast Asian Edition
blog comments powered by Disqus