AppAsia to make upwards of RM3m-RM4m in revenue

This article first appeared in The Malaysian Reserve, on May 18, 2015.

LISTED IT systems provider AppAsia Bhd said it expects upwards of RM3 million to RM4 million in revenue from a new e-commerce operation it will launch by the end of this year.

AppAsia purchased e-commerce outfit Just Retro for RM1.5 million in January, and said the company has made similar amounts this year.

Just Retro already had ten of thousands of registered users when it was acquired, but AppAsia MD Calvert Wong hopes renewed promotion efforts following the launch of a new site will open the door to many more visitors and more revenue.

“We entered the online retail space because it is a booming industry and now, we intend it to be part of our revenue strategy,” Wong told reporters after the company’s AGM in Kuala Lumpur last Friday.

“But we need to update the user experience and revamp it to make it more user-friendly,” he said.

Datuk Wira Rahadian Mahmud, chairman, said the company acknowledged the challenges it faced in entering an industry dominated by established players such as Lazada and Zalora. “But we will focus on bringing customers what they want in terms of service and supplier quality, and as a strategic move, the group will enter the wholesale online retail sector first before a planned emergence in the consumer market.

“Being in the wholesale retail will allow us better economies of scale. Our ultimate goal is to expand regionally,” said Wong. Online retail will join a few other segments in AppAsia’s business portfolio, which include app development and IT (information technology) security.

Wong said the group has published twenty apps for the Apple Store and Google Play Store. Its most popular app is “Amazing Wheel”, an app based on the “Wheel of Fortune” concept which has been downloaded over 20,000 times.

The app works on a freemium model, where players spin a wheel to win prizes if they are lucky. Each spin requires a token. If players hit the bankruptcy ticker, they will lose all their tokens.

Amazing Wheel offers a bonus item that can be purchased for US$2.99 (RM10.64) to avoid the bankruptcy ticker. Interestingly, most of the in-app purchases are registered in the US and the UK.

“What we discovered is that users from developed countries form a large customer base for our apps. Therefore, we are producing apps tailored to foreign markets, without discounting local markets.”

In three months, AppAsia is launching a local search app in the same vein as StreetDirectory, that it said will be able to capture revenue from local advertisers.

The group is developing an “e-passport” application that it hopes will replace the current SMS one-timepassword authent icat ion service provided as a transaction security measure.

Banks now pay two to three sen per authentication message to the telecommunication companies, and Calvert and Rahadian hope to capture some of the tens of thousands of send-outs every day with their application, which they say will do the same task at minimal cost.

Wong said the group does not develop apps for companies on a contractual basis. Instead, it looks for partnerships in which AppAsia can retain a stake in the project after it is completed.

The group made its first profit of RM852,000 on RM3.4 million revenue for the firstquarter of this year ended March 31.

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