The new fast fish of Asian wealth
In a matter of weeks, even days, the global pandemic changed the lives of millions of people. To stay relevant in these extremely volatile times, brands must keep a finger on the pulse; and swiftly act upon shifting consumer needs and wants. Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, phrases it as follows: “It is not the big fish that eats the small fish, it’s the fast fish that eats the slow fish”. Hence, it’s no longer a brand’s size that ensures competitive success. It is rather its ability to quickly respond to the changing world with a relevant offering.
When I arrived in Hong Kong 20 years ago, I was impressed by this futuristic neon city by the sea. Little did I know about its sleepy neighbor, Shenzhen. Growing over 20% a year, I witnessed Shenzhen transform from a small fishing village to China’s Silicon Valley. It is now home to around 10,000 tech start-ups, including Tencent, the social media and gaming giant that owns WeChat.
In 2013, the social media app WeChat moved into digital payments, launching WeChat Pay. This digital payment service really took off after WeChat introduced the ‘red envelope’ feature. This is based on the Chinese tradition of ‘hongbao’ (i.e. red envelope or red packet) to give money to family and friends as a gift. In 2015, users sent 500 million digital red envelopes in a single day over Chinese New Year. Together with its rival Alipay (from Ant Group, the other major digital payment platform in China, previously Ant Financial), WeChat has transformed everyday life of consumers. Because now they can buy almost anything, at any time, from within these super apps.
This rise of digital banking puts pressure on the traditional players in the industry to keep up with competition. One could say that the success of the fast fish urges them to take action. Standard Chartered, for instance, launched its consumer-friendly digital bank Mox for a mobile generation, to “make banking a delightful experience”. HSBC, on the other hand, plans to trim banking fees to fend off competition. While these incumbents are taking small first steps, Ant Group is launching a virtual bank in Hong Kong. They are also targeting a valuation of 225 billion dollars to pull off the world’s largest initial public offering.
No wonder that Piyush Gupta, CEO of Singapore’s biggest bank DBS was “scared out of his wits” by these new fast fish. They are prompting him to digitally disrupt his own bank to survive the waves in the industry.