The first gig economy can be dated back to 1995 with the creation of Craigslist in the USA. It wasn’t until recent years that this innovation exploded across many different sectors and locations, including Asia-Pacific (APAC).
That being said, market research has been around for many more years. If you look at the definition of the gig economy, “noun: economic activity that involves the use of temporary or freelance workers to perform jobs typically in the service sector,” you’ll see that this is essentially what the market research industry has been doing since its inception – exchanging someone’s time and intellectual labor in return for an incentive. The gig economy’s reliance on independent contractors instead of full-time employees reflects the transient nature of the work, which is similar to the temporary nature of market research projects.
With the current boom in gig economy platforms, the typical market research database model is becoming outdated. People want more than one way of making money; they want it to be easily accessible and quick; they want a fair exchange for their time; and they want to feel respected. This gig worker platform model is a two-way process, both parties need each other to succeed.
In this article, we will look at some of the biggest gig economy platforms throughout APAC, taking note of their failures and their successes.
The growth of the gig economy in the APAC region is no secret. Most of the region’s workforce is comprised of gig workers – preferring to take jobs that offer them more flexibility and earning opportunity. While there have been a few gig economy platforms that have failed to take off, there are a number of success stories about platforms that have experienced great success.
Grab is one of the biggest gig economy platforms in the region. What started as a ride-hailing app (like Uber) for Malaysians has evolved into a more comprehensive “super app” that offers a variety of gigs and services, including food delivery, parcel delivery/courier services, and ride-hailing.
The success of Grab can be attributed to a few primary things:
- They have an excellent understanding of the region, including the hyperlocal markets, and they have adapted their business model and offerings to reflect local conditions, demand, preferences, and regulatory requirements.
- They provided more opportunities and services for both consumers and gig workers by expanding their offerings to include more than just a single gig (e.g., ride-hailing).
One of the early challenges faced by Grab, which comes as no surprise to anyone, was fraud! GPS spoofing, phantom bookings, and other generally nefarious things involving fraud were significantly reduced by Grab forming an anti-fraud department called GRABdefense, which uses AI and machine learning to identify and manage shady activity on the platform.
Another thing to point out is that Grab was able to outperform Uber by creating localized versions of their app that focused on local markets, thereby adapting to different cultures and languages in the region. They also acquired Uber’s business in Southeast Asia in 2018, which accelerated their growth further.
Another success story in the region is Freelancer. Freelancer is an Australia-based online marketplace for freelance services, and you can find just about anyone for anything you need. Their gigs include software development, writing, data entry, and design right on through to engineering, the sciences, sales and marketing, and accounting and legal services!
In fact, they now claim to be the world’s largest freelancing and crowdsourcing marketplace by their number of users and projects.
So how did Freelancer do it?
The founder, Matt Barrie, purchased an existing Swedish website, www.getafreelancer.com, and rebranded it with the strategic goal of building and expanding upon the services offered and regions covered. He wanted to offer as many skills and fields as possible. Starting from a half-baked app provided a great springboard from which to work on a more sophisticated offering.
They structured their platform in an intuitive way that allowed employers of virtually any size to post jobs, and gig workers could easily bid on them. The simplicity of their UI is key.
They acquired several other niche freelance marketplaces/apps that not only expanded their user base but also added to their technological capabilities and reduced their competition.
One of Freelancer’s big challenges to solve was the time and labor it took to verify accounts. It would often take days to verify a single account. They streamlined the account verification process by forming a Know Your Customer (KYC) program and investing in better technology to automate the processes involved, which significantly reduced the time and labor involved in verification.
Also worth noting is that Freelancer edged out another popular freelance platform, Upwork, by offering better service pricing, which equated to a higher user satisfaction rating.
While these are only two examples of success stories in the region, the list is growing as the demand for informal and flexible work opportunities increases. However, there have been plenty of failures along the way as well. While unfortunate, these failures can serve as valuable lessons and highlight the intricacies and nuances of this region.
Uber’s Retreat from Southeast Asia
Uber’s foray into Southeast Asia and subsequent failure to establish itself within the market should serve as a cautionary tale to any company looking toward international expansion. When Uber first began expanding to this region in 2018, they did not pay nearly enough attention to their competitors (Grab and Go-Jek) and, as a result, were unable to gain any significant market share despite their large financial investments in the region.
Uber simply tried to rinse and repeat the same strategies it had implemented in other markets, whereas Grab and Go-Jek catered their approach to the unique challenges of the region. For example, Uber largely approached their launch in this area in isolation while Grab and Go-Jek focused on establishing local partnerships and expanding through a partner- led approach.
Additionally, Grab and GoJek did a better job of prioritizing and maintaining regulatory compliance, which is of increasing importance globally. Uber’s lack of attention to regional nuances and its failure to adapt to the local market were significant factors in its failure.
Ofo’s Collapse in China
Gig platforms like Uber have faced challenges in the APAC region due to difficulties of responsible and effective expansion. Ofo, a Chinese bike-sharing startup, was able to capture a tremendous amount of market share in a very short amount of time. However, in an attempt to capitalize on their early success and keep up with their ever-growing demand, Ofo pushed themselves to scale at a pace they couldn’t manage or sustain.
They flooded China’s streets with more bikes than necessary and more bikes than they could service. As more and more bikes fell into disrepair, millions of users were left stranded as thousands of non-functioning bikes littered the streets. Ofo’s collapse in China serves as a good warning to gig platforms (in any region!) that well-thought out expansion is key to long-term success.
TaskRabbit’s Limited Success in Japan
TaskRabbit, a platform for outsourcing everyday tasks, entered the Japanese market with high hopes. However, their American business model did not mesh well with Japan’s more traditional cultural values and preference for face-to-face interaction. The personal touch that Japanese consumers look for was absent in Task Rabbit’s mobile ad-hoc service. The app never caught on as everyday Japanese consumers opted to work with repairmen that they were referred to or knew personally.
Market Research Goes a Long Way
Ultimately, many of these failures could have been avoided if these companies conducted simple market research before expanding into these unknown markets. If they had done this, Uber and TaskRabbit would have understood the local preferences, regulations, and competitive landscapes of Southeast Asia and Japan (and could have adapted their services accordingly). Similarly, Ofo’s failure to succeed in the region highlights the importance of conducting research and understanding the local market demand before expanding.
Unfortunately, none of these things happened, and all three of these companies failed to establish themselves in APAC. APAC is a market primed for success in the gig economy space, but only if engaged with correctly.