AirAsia Digital becomes 1 of 3 unicorns based in Malaysia
AirAsia Digital recently achieved unicorn status (a valuation of over US $ 1 billion) in what AirAsia Group CEO Tony Fernandes described as a “record time” of less than 2 years.
In a report by Switzerland-based global financial services company Credit Suisse, AirAsia Digital is now one of three Malaysia-based companies to be included in SEA’s unicorn club.
The other two include Carsome, which became a unicorn in July 2021 after acquiring iCar Asia, and edotco, a telecommunications infrastructure services company.
For clarity, AirAsia Digital is the renowned digital business arm of the AirAsia Group. Previously, it had gone through RedBeat Ventures when it launched in 2018.
This recognition validates the company’s belief that its strategy to grow its digital services was the right thing to do, especially in the face of the pandemic.
But even before the pandemic, AirAsia Group was already digitizing aspects of its business, starting with a move to ticketless and introducing online booking through airasia.com in early 2002.
Since then, she has made more progress in digitizing her businesses, and we take a look back at some important milestones on her digital journey so far.
2005: Launch of mobile.airasia.com
This service allowed users to search, book and pay for AirAsia flights on their mobile phones or personal digital assistants (PDAs).
As mobile phone use grew rapidly, the goal was to reach even more consumers while reducing operating costs.
2008: Took another step into the e-commerce space
That year, AirAsia launched an online shopping portal called Red Megastore, which offered a range of exclusive AirAsia products.
Today, the site appears to no longer exist and its operations appear to have shifted to airasia travelmall, an online travel retail platform where more than AirAsia merchandise can be found.
2012: Redesign of its mobile application
In July 2012, AirAsia suspended operations of its mobile app to the confusion of customers, but several months later announced a revamped service.
It came with more features, such as the ability to pre-book meals, baggage weight, sports equipment storage, and more.
However, fans at the time noticed that the app had glaring shortcomings, particularly the inability to verify its flight reservation alongside other bugs and glitches.
While the company is always pushing the boundaries when it comes to technology, this rush to launch flawed new services is something AirAsia still seems to struggle with today, so our recent review of its food delivery service is to something to do. .
Over the next few years, AirAsia would continue to add features and enhancements to its mobile app.
2018: expansion in the fintech space
Following the name change from RedBeat Ventures to AirAsia Digital, BigPay was launched. The e-wallet came with a prepaid card for use wherever a MasterCard was accepted, making it one of the first of its kind in Malaysia at the time.
One of its main selling points was the accessibility and ease of transacting money on a global scale, and in 2019, the introduction of its e-wallet transfer feature to the bank has again. increased the value of BigPay.
By 2020, it had expanded its services to Singapore. In February 2021, BigPay announced that it had 1.3 million users in Malaysia alone, and that it was one of the largest digital financial platforms in the country in terms of gross transaction value.
May 2020: Take a slice of the local food delivery market pie
After flights were stranded during the COVID-19 pandemic, the airline began to seek other digital opportunities to fill market gaps.
The company identified that many existing food delivery apps charge merchants an exorbitant 20-35% commission fee, and believe they can deliver the same quality for better prices.
Thus, airasia food was launched. It started out with zero commission fees, but as the business also needs to hold its own, it went on to introduce a 15% commission rate which is considered the lowest in the food delivery industry in Malaysia on time. current.
Within 3 months of its launch, airasia food reported having integrated 500 restaurants in Klang Valley and delivered nearly 15,000 orders.
October 2020: revealed its new application identity under the name of airasia Super App
You may be familiar with airasia Super App as one of the main areas where AirAsia has put a lot of effort to grow, especially during the pandemic.
The rebranding of the app was intended to reflect its goal of becoming a one-stop-shop e-commerce platform for its lifestyle and travel.
To this end, it offers more than 15 kinds of products and services, including the purchase of flights, hotels, food delivery, grocery delivery, beauty products, etc. In February 2021, Tony shared in an interview with NHK World that the super app serves 16 million users per month.
The same month, AirAsia Digital launched Redbeat Academy in partnership with Google. It was originally set up to hone and train Allstars (AirAsia employees) in artificial intelligence (AI), machine learning (ML), software engineering, etc.
As the next step in the company’s digital transformation journey, the academy was opened to the public and its efforts were praised by then Minister of Science, Technology and Innovation, Khairy Jamaluddin. .
March 2021: Joined the food delivery scene in Singapore
Seeing other overseas food delivery opportunities as well, airasia food expanded to Singapore after one year in Malaysia.
Despite a slow start of just 100 daily orders even after 4 months, Tony remained unfazed, describing the performance as “exactly what we expected”.
He reiterated that their priority was just to launch it first and then improve the platform’s technological infrastructure, which appears to be AirAsia’s usual practice. Once the technology got better, they would focus on marketing.
August 2021: entry into the Malaysian carpooling scene
One of the most recent airasia Super App additions is airasia ride, the airline’s attempt to capture a share of the ridesharing market in Malaysia.
This came after Tony announced in March 2021 that he wasn’t fazed by ride-sharing giants like Grab’s grip on the local industry, and that AirAsia would soon be launching its own ridesharing service.
At the time of its launch, it had already on board around 1,500 drivers and planned to take on another 5,000 by January 2022. Based on the projections, airasia ride CEO Lim Chiew Shan said that it would need 30,000 drivers to meet the expected demand.
Similar to its low commission rates for food deliveries, airasia ride charges a 15% commission from driver-partners in an effort to secure a more attractive deal.
October 2021: Recognized as one of three unicorns based in Malaysia
This brings us to where we are now, with the affirmation of AirAsia Digital’s recognition as a unicorn by Credit Suisse.
Tony said: “It sends a strong message to the industry that our strategy to become more than just an airline in the digital age is not only on the right track, but is making a name for AirAsia. as a key player in the e-commerce and delivery space in Asean.
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Drone delivery is also on the horizon, if pilot testing of the technology by AirAsia in March 2021 results in something more substantial coupled with the development of the unmanned aerial vehicle (UAV) industry in Malaysia. For the moment, there has been no further news on this adventure.
With a long history of growth behind AirAsia, it is likely that this article has failed to cover every one of its relevant digital milestones, but it suffices to show its ambition and dedication to its digital transformation.
At first, it appeared that AirAsia was the type to break the mold, but now goes the proven path.
While some of its efforts have been less than perfect, especially when it comes to its super app, I still commend the group for doing what they can to stay relevant and sustain themselves during the pandemic.
Note my words, we are going to be a major player in the digital economy of ASEAN. We recently won the Business Innovation category at the Airline Strategy Awards 2021. Our competitors are already noticing it and the best is yet to come, with new innovations and partnerships to be announced soon that will really shake up the industry, as we have revolutionized the industry. Asean air transport industry 20 years ago.
Tony Fernandes, CEO of AirAsia Group.
- Learn more about the Credit Suisse report here and about AirAsia here.
- To learn more about our AirAsia related content, click here.
Featured Image Credit: Reuters