Travel technology in Asia: airasia Super App

Transcript

Speaker 1:

Cool. So, that's all going. So, you both look great. So, I will be quiet and leave it to you, Joe, to sort of do the introduction and take it away. Thanks.

Dr. Joe Leader:

Very good, thank you. Hello from New York. I'm APEX/IFSA's CEO, Dr. Joe Leader, and I'm honoured to be joined today from Malaysia by the CEO of AirAsia's fastest growing business of 2021, AirAsia super app, CEO Amanda Woo. Like many strong leaders in our airline industry, Amanda rose to her role as CEO after serving as AirAsia's chief commercial officer. Now, she's leading AirAsia into new revenue streams, tapping into her decade and a half experience of airline revenue generation, eCommerce digital marketing, and lifestyle brand creation. Amanda, thank you so very much for joining us at CAPA Live today.

Amanda Woo:

Hi, Joe. Thank you so much for the introduction. I'm so honoured to be in this interview. Great to meet you guys from the New York and all the way from Malaysia here.

Dr. Joe Leader:

Well, it's amazing because I heard in advance of this interview that you love to cook. And boy, have you cooked up something extraordinary in the AirAsia Super App. Is that true? Did you really have a background in cooking before your AirAsia times?

Amanda Woo:

Yes. I do, Joe. A lot of people, when I told them that I can cook, it's really a surprise to everyone. "You really can cook? Do you cook that are instant noodles or you just reheat things some food from the microwave?" A bit of background. I used to own a restaurant and actually, I run the kitchen on my own as well. So, that was a couple of years ago. And a lot of my team members right now, they're also my customers before. So, it's pretty amazing in a way.

Dr. Joe Leader:

That's a great thing. If people that were your customers are willing and come to work for you, really shows how well you treated them as customers. That's incredible, Amanda. Well, let's jump straight into the interview now. Now, for our international audience, could you set up our discussion today by giving a snapshot of the AirAsia Super App and what indeed makes it so super across Southeast Asia?

Amanda Woo:

Sure, my honour to share a bit more about our Super App. How do I begin? Probably, I could say that we used to be an airline. AirAsia airline, the world's best low-cost airline, few years running in a row. So today, since the pandemic, we have actually accelerated the AirAsia airline to now a super app. What is super app? In short, we are no longer just an airline, right? Super app is actually a single platform ecosystem for everyone and everywhere, anytime that you can use. So in simple, everyone can fly to and any day app right now, who we are today. So within the entire super app, what make it special is the macro ecosystem that we have built all these years. First of all, we have our last mile fulfilment, which is really by our teleports that including all the cross borders delivery, cargo as well, for the airline.

Amanda Woo:

We have a reward system, by AirAsia rewards. And now, we have just started our FinTech function and ecosystem by our big pay company. So, that is on the micro perspective. Within the super app itself, there are two core functions or recorded the two main core business of super app. Number one, travel. Travel continues to be our core business vertical, right? 80% of the revenue is still coming from travel. Since our super app started, we have completed the entire travel ecosystem by introducing the hotels airlines. And most importantly, right now on the super app, we actually distribute more than AirAsia airlines. We have all the other airlines on board with us. I'm very happy to announce that as of today, we have a direct relationship with about 30 airlines across the world, that including reputable food service airline of the world as well is already on board with AirAsia super app.

Amanda Woo:

On the other hand, over the last couple of months, we started the Delivereat business. We deliver food, we deliver groceries, we deliver beauty products. And recently, we launched AirAsia rides that we deliver people on ground. So gives you that will be a holistic ecosystem of the overall super app business. But most importantly, if you look at us right now, we are now into the platform business, a single ecosystem platform business that we offer wide enabling of a total platform solutions to partners as well as on a commission-based model as well. So, this is on the overall view of what is super app today.

Amanda Woo:

If you look at within the entire super app ecosystem, another factor that really the winning formula of us is actually we're putting the whole stickiness together by having our own super app currency, which is actually AirAsia rewards. Anyone can now use the points or the rewards points on the super app. Any products available you can instantly check out. 100% point system. Half cash, half points, or full point system as well. That we can see creates our entire ecosystem, and also user stickiness. That is really the uniqueness we have built. What actually enable this single platform system is actually all the data we have collected over the years. We have about 51 million of datas right now within the entire super app ecosystem. I hope that gives you a good preview what is AirAsia super app.

Dr. Joe Leader:

That's really incredible, Amanda. So, we have an AirAsia super app with now you've added in a brand new element, which is you have 30 other airlines in addition to AirAsia, which is an incredible addition. You have food delivery, ride hailing, flight ticket booking which you said is this core function with 80% of revenue, grocery shopping, and eCommerce platform I understand from even beauty products. So, what has been the biggest surprise success for the AirAsia super app in 2021?

Amanda Woo:

Well, I think we work really hard. All of this within the entire super app team, we work really hard over the past 18 months since pandemic started. We have built a platform. And most importantly, if you ask me as transformation, it's not about just digital transformation. It's about how quickly all sales people like us transform from an airline to more than an airline in terms of mindset, the way of working, and how we embracing this new vision of super app. So, that I would say is really amazing and really a good surprise of success for all of us at super app level.

Amanda Woo:

On top of that, to make it more relevant for this conference is, let's talk about Fly Beyond. Fly Beyond is the 30 airlines that I've just shared with you, Joe, earlier the questions. If you look at AirAsia, the super app right now, we were kind of impressed and amazed at how quickly these airlines wanting to work with us. We're very keen to engage them as our direct partners as well. On top of that, we are also working with a few reputable GDS partners in the world for us to be more complete in terms of the network and the airlines that can then instantly bring on board on super app level. The competence that we see in these partners is very amazing, and we are very grateful that they see us the same way too. So, all in the surprise success is we're really now the true OTA of ASEAN.

Dr. Joe Leader:

That's incredible, and congratulations on that major expansion. I know how hard it is to get the integration done from a GDS perspective and having that option to be able to sell beyond AirAsia's markets is really complementary.

Amanda Woo:

Absolutely. Also on tap on top of that, Joe, one more key learning for us is the pandemic taught us to be even more cost efficient. We're already low cost, right? Throughout the entire pandemic period, we learned to be even more cost efficient across all function and all units. And you will see how amazing is this taught us to be really careful with whatever we do, and we make do of what we have today. So, that is really another success factor of AirAsia super app.

Dr. Joe Leader:

That's great, and congratulations on integrating so many things together. Some areas of expansion for the AirAsia super app included the logical transportation extensions, like your successful ride hailing business in Kuala Lumpur and the Klang valley in Malaysia. You also acquired the Thai food delivery business, Gojek. How is the integration of Gojek's food delivery business into the AirAsia super app been going thus far?

Amanda Woo:

Yeah, thanks for the question. That's one of the most proud of I think the acquisition we have so far to begin with on super app. Actually, prior to pandemic, we are already planning the launch of super app in Thailand. The entire Gojek acquisition actually fast tracked the entire timeline and the speed to market that give us a good foundation to build on. With the entire acquisition of Gojek, we brought in a great team, very high level expertise, as well as the energy that actually syncs very well with the AirAsia culture as well. So, that is one of the biggest win of this overall acquisition that we have on Gojek. So, another level is if you look at us is upon acquiring the Gojek, it was really much focusing on food delivery. Right now, what we are doing is we going to speed up the overall eCommerce component that includes a cross-border grocery delivery. Imagine if you're in Bangkok today, you can actually order a delicacy coming from Chamai and you receive it within the same day. So, that's another level of concept that we current building on in Thailand.

Dr. Joe Leader:

Wow, that's incredible. From going from Gojek to another acquisition that you conducted this year, Delivereat... Southeast Asia's food delivery market is supposed to surpass six billion US dollars this year. What has Delivereat added to the AirAsia super app DNA, Amanda?

Amanda Woo:

Yeah. Maybe, if you look at the entire super app is of a startup mentality, although we have more than 18 years of experience in airline. Super app, we just started. As part of the culture, we are very much still on a startup mentality. That actually matches the overall the way of working of the two co-founders of Delivereat. AirAsia's about people and we are very happy that with the entire acquisition of Delivereat, we're bringing three main component to the table right now. Number one is a know-how. Number two is the people. Number three again is about the people, especially those with the same mentality as a startup. That really a perfect match for all of us at the super app level.

Dr. Joe Leader:

Well, it's a great integration, Amanda, and the AirAsia app with all of these different pieces coming together could become more expansive, very much like grab over time. As the CEO, what do you believe that's unique in AirAsia's DNA that'll provide a competitive advantage to the AirAsia super app over competitors?

Amanda Woo:

That's a great [inaudible 00:11:48] question, Joe. To me is we have never changed. We are keeping to our real DNA, which is a low cost model across any new line of businesses that we're going to introduce. Example, we offer low fare for flights. Right now, we offer the lowest commission model for our food merchant. We offer the lowest ride hailing commission model to the drivers, and we are actually the cheapest ride hailing fares in town. So, if you look at everything else, it's all about low cost. We are still keeping to the same DNA and this will not change. On the other hand is the overall ecosystem that we have built. Just imagine one of the winning formula for us is actually the uniqueness, like you said, is actually the travel community that we have built across the years that will bring us to the whole new level to the entire OTA super app in ASEAN market.

Amanda Woo:

On other hand, while we're building more line of businesses, we're also looking into when we build something, we need to make sure that, that synergize with the entire businesses that we have. Example, look at e-hailing and ride. It is really the right compliment to our airline business because we have the real time data that we can fit in to all the drivers that we have. They already know which flight is landing, which flight is departing, which are the peak period that they should be at the airport to pick up the passengers, or they already know where to pick up the passengers. So, this is really a captive audience pool that we have to synergize with the entire line of businesses that we have within super app. Even at the consumer level, we are saying that ride hailing actually completes the entire travel journey of the passengers from home to airport, from airports to the destination. And from the destination, you land at the destination, at the designated airport, and we'll pick you up and send you to hotel.

Amanda Woo:

Basically, it's from point A to point Z, from flying people and right now, to ferrying people on the ground as well. So, that this really beautiful ecosystem that we're looking at. Some of you may have heard of the Unlimited product that we have rolled out, think probably 12 months ago. We first started the Unlimited by almost like a subscription model, just like the Amazon Prime subscription model. I believe that we're first in the world to have this model where a user, a consumer, will just need to pay a certain fee, right? As a subscription fee. And you get to redeem a free flight the entire year. That is number one. Also, you get to enjoy free delivery of your food, of the groceries, as no charge Unlimited throughout the year.

Amanda Woo:

And we are going to introduce another level, another enhanced version of unlimited very soon, probably in a month time, that will wrap up the entire ecosystem of AirAsia super app. Imagine with a little subscription fee, you enjoy free flights, free food delivery, a huge discount on the AirAsia ride, a discount on hotels booking, a discount on the academy, because we also have an academy that equip SMEs, people, anyone who wanted to accelerate in terms of the digital knowledge. All this thing will be wrapped up within the entire unlimited product that we're going to introduce in the next, I think probably two week's time, hopefully.

Dr. Joe Leader:

Wow.

Amanda Woo:

Let's see how it goes. Yeah. So, that's a lot of winning formula right now if you look at AirAsia. And not just winning, it's really unique to ecosystem. Basically, it's all about the entire ecosystem that we have. So, it's very important to build the right one and every time when we build something, we need to make sure that it's synergized with any of the businesses that we have built today.

Dr. Joe Leader:

That's really incredible. And having that kind of unlimited model where you liken yourself to Amazon Prime, but in a very different way. It's as if being an Amazon Prime member allows you unlimited free flights to anywhere, which is really something that... Oh boy, if Amazon actually was able to offer that, I think they'd be in a different world. Have you been public about how many people have taken advantage of that offer, or is that being kept under wraps?

Amanda Woo:

Right. We did a proof of concept probably the last year. We wrote out a lot of things last year at unlimited. We started in Malaysia, then we moved in Thailand and then we have it in Indonesia. We have it in Philippines. That was more a proof of concept. We sold probably more than 300,000 of it as the first round of test market. So, that I think gives us a lot more confidence and we can see how people is actually leveraging on the unlimited products that they have subscribed to. And we see more stickiness. People really coming back to our super app asking for more. So, here we are today to really further enhance the entire unlimited product which is coming soon to the market.

Dr. Joe Leader:

Well, let's tie that back directly into AirAsia's airline services. Because when you talk about the unlimited product, it ties back directly to the airline. Moving and building that should affect airline revenue. So, this upcoming year should be an airline resurgence year. How does the AirAsia super app better position AirAsia for the resurgence of our industry?

Amanda Woo:

Cool. Number one, we have built a very solid OTA platform like what I've shared at the beginning of the conversation. We are now distributing all airlines. As long as you're willing to work with us, we're keen to work with you, right? We are connecting to the major GDS system. Second thing is we have the widest network in terms of AirAsia airline. And we have all the captive audience within our pool of datas that offers a lot of feed us traffic to any other airlines that want to work with us from Asia perspective. On the other hand, we have been an expert in airline marketing if you look at it all these years of AirAsia's success, of AirAsia brand today as a global brand. We are very confident that with the travel return, we will be able to bring super app really going after the number one OTA brand in the ASEAN market.

Amanda Woo:

Remember, Joe, at the beginning of the conversation prior to this, we talk about how are we preparing for the travel return. We are already very contactless. Check-in is already. We are about to roll out a check-in only at a super app level. We have already integrated with most of the immigrations that we have that Okay to Travel backend connected, whether you are vaccinated, you have been tested positive or negative. Okay to Travel is already integrated in the backend system. We also have a facial recognition at the boarding gate as well, as well as the check-in counter. So, all this thing is really ready. We are all ready and gearing up to the travel return, whether it's domestic or international.

Dr. Joe Leader:

That's incredible. Well, so let me ask about competitors then. So, imitation is the sincerest form of flattery. Just as AirAsia's surrounded by low cost carriers that are competitors, do you believe that airline competitors may try to follow your lead and it could lead to a world of super airline apps that are fighting for mine share, Amanda?

Amanda Woo:

Absolutely. I think it is really an open market, especially in Asia perspective. There's a lot of super app out there, but the uniqueness of AirAsia is what we have today with the entire ecosystem. Any airline can do it. It's not about being the first, but to me, is about who does it better. That's very key. For us at AirAsia super app level, we have built a trusted brand. So now, it's really about innovation and most importantly, the speed to market. So, that will be our winning formula.

Dr. Joe Leader:

And so, it ties into something. At the start of last year, Delta Air Lines CEO, Ed Bastion, talked at CES about Delta leveraging its apps to become a more trusted brand in the end to end travel experience. Do you think that the US3 and the ME3 and others could and should follow your lead? And do you believe that the airline super app phenomenon will be limited to Southeast Asia? Or, do you think it could become a global trend?

Amanda Woo:

I guess it really depends on the competitive landscape of this market. Delta Air Lines, American Airlines, they are really all the mature airlines in the world. I'm sure it is something for them to consider as well, or probably they can have something better than what we have today, right? It's really depending on the demand and the landscape of the market. For us in AirAsia super app, we believe that there's huge opportunity that is in the ASEAN market, for sure. Consumers are evolving very quickly. So, like I said, it's about speed, convenience, and about value, time. Both time and money are crucial. For a super app brand like us, I think to us is we constantly think about why to download and use our app, right? That is really one of the foundation, the fundamental to us in our everyday work at the super app level. Even airline super app like US to follow our lead I think we are sure that it going to be a new game changer and everyone would just need to learn from each other.

Dr. Joe Leader:

That's a great way to put it. Well, let me jump back from the airline side, back to your visionary side, Amanda. As a visionary, you've said that you can envision AirAsia's food and AirAsia rides surpassing competitors next year and in huge markets. How do you envision getting there so quickly?

Amanda Woo:

We are very ambitious, obviously. We are aiming beyond just revenue. At a super app level, other than revenue, we're looking at how we can accelerate our user base. That is really the key to really build a super brand and a super app. So, at a super app platform, the user base will definitely surpass the airline, yeah? Travel is here to call, and back to your question, yes, it's possible. We probably speculating or projecting that to happen in the next couple of years' time.

Dr. Joe Leader:

Wow. That's incredible, and congratulations on your advancements. As you're talking about the super app, it makes me think about one of the things that when tech companies speak about apps, Amanda, they think about user engagement. They think about, "Okay, how often does the customer open the app? What do they use? What do they go to? Where do they seem to get confused and abandon what they're doing?" Are you looking at things like the Googles and Facebooks of the world to make sure that your customers are engaged in having a good experience?

Amanda Woo:

Yes, definitely. In fact, since you're talking about Google, we have a strong partnership with Google. So, there's constantly discussion together with Google how we can actually bring our app to the next new level. Just very simple things like how do we increase our in-app ranking? So, that's a new thing, right? It's beyond SEO, beyond the SEM as well. How do we bring back those who downloaded that app? Downloading is one thing. How do we actually encourage them to use it? I think that is the biggest question now for everyone that's running on the eCommerce platform. Yeah.

Dr. Joe Leader:

To get customers engaged, it always seems like if you can get them to turn on notifications for flights and such, then it might give you an excuse to give them an offer to use your services for the first time, versus the apps that I tend to delete personally are the ones where they say, "Remember, you can use this app," and they're not giving me anything really special, or are so small, I feel annoyed. How do you find that line for AirAsia customers of encouraging versus annoying?

Amanda Woo:

Yeah. I would take it as more an encouraging point of view. If you look at the super app today before the delivery of verticals, we have the entire travel vertical which is all the line of businesses that we have under the travel category of airlines. You have the choice. You have [inaudible 00:24:55], which is a new way of flying. How many times does this user come on board to use a app? Probably, three to four times on an average. Now that we created the entire delivery of ecosystem, you will see people that come in. The frequency of usage has definitely increased. There's also a reason for them to use the app, which they can use it any time, any day. Hence now, we are seeing that from everyone can fly, now an app for any day. So, that is more on a positive note that we are seeing the stickiness is there, right? Right now, how do we get more people to get to know super app and how this going to be a game changer in the community.

Amanda Woo:

Let's talk a bit about community here, Joe. If you look at an app or a super app of any brands out there, the number one thing about AirAsia is we believe in building our own community, right? For the past many years, we have built such a strong travel community, not just at a consumer level. We're talking about the pilots community, talking about talented cabin crew, talking about our loyal influencers out there that has believed in the brand. Right now, we are building another layer with community. We're talking about the drivers community on the e-hailing, talking about the foodies, right? The community in the market. We're talking about all the beauties products lover in the industry itself, which is going to come on board with us. So, at the super app level, we are thinking beyond just creating a usage. What we believe in building a community, and soon we'll become the real community led super app. That is another project that I'm currently working on.

Dr. Joe Leader:

That's incredible actually creating a community of AirAsia fans. And that ties almost back to the one other question, based on what you said earlier, Amanda, was on loyalty. The AirAsia loyalty programme being so integrated. I can tell you from my personal experience here in the US, I use an app called Lyft, a competitor of Uber, because it gives me Delta sky miles. And also, because of a credit card partnership, it gives me about 10 times the normal miles in addition to my Delta miles. So, probably about every 1000 dollars I spend, I get a free round trip ticket, which is incredible. What's it like for AirAsia and has the loyalty programme made a huge difference for you?

Amanda Woo:

Loyalty I would say is a very important part of the ecosystem that we currently have. One of the things that we're working on right now is we are actually integrating the entire loyalty apps that we have today, is named Big Life, we're going to integrate the entire app into a super app, so it become really one single app for everyone, right? But, that is a future super app. Well, just talking about loyalty not just within the closed loop ecosystem of AirAsia super app, one of the big win of our loyalty programme is we have this offering called Big Xchange where we work with external brands, partners, corporations that whoever who has a point ecosystem, they can actually convert it into an AirAsia Big loyalty rewards point, and then spend it on AirAsia ecosystem, or the other way around as well. So, you can see that how we are not just working on a closed loop, we are trying to expose our points into the external ecosystem as well by partnering with a lot of key brands out there.

Dr. Joe Leader:

That's great. And the loyalty programme I think is such an important component for every airline, but how you're leveraging it to build the AirAsia super app is incredible.

Amanda Woo:

Yes. Absolutely.

Dr. Joe Leader:

Let me turn to my final question, Amanda. So, let's go out on a limb together. How long do you believe it will be until the AirAsia super app revenue could surpass AirAsia airline revenue?

Amanda Woo:

Well, it really depends on how quickly the travel is going to return. What we are expecting here at the ASEAN level is there's going to be a V-shape recovery in the next couple of months' time. We're expecting the market rebound back to pre-COVID probably in the next 12 months' or 18 months' time, probably in 2023. With that on board, by that time, our super app will really become a super app because by the time there will be more products. Our technology will be more advanced. I mean, we are still a startup in terms of super app. A lot of our enhancement and development is still ongoing at the moment. So, let's say probably the next 24 to 36 months, I think our super app platform business will be huge. I'm not going to say that they're bigger than airline, but it'll be on parallel with the airline business or the travel business.

Dr. Joe Leader:

All right. I think that's a wise political move. I don't know how Tony would feel if you said, "Oh, my business will be even better." But since so much is already going through the app itself in terms of commerce, really if you look at the website versus the super app, I could imagine it getting there more quickly because the transactions are all going through the super app.

Amanda Woo:

Yes, absolutely, and it's more convenient for everyone. And soon, we are going to have another... How to say it? Artificial intelligence machine that would be built into the super app as well. So, that is in the... How I say? In the midst of our discussion.

Dr. Joe Leader:

Wow. All right. I can't wait to see the artificial intelligence. I did my PhD dissertation on accelerating new technology adoption by passengers in the aviation marketplace. So, when you see how they react to AI, I can't wait to get back together with you again, Amanda. Perhaps we can speak about that in another CAPA Live.

Amanda Woo:

Yeah. Great talking to you, Joe. I think with the PhD, you know the inside of super app. Good conversation, Joe. Yeah.

Dr. Joe Leader:

[inaudible 00:31:19] you're writing a whole new book for, and thank you for your leadership in creating an app that can be as expansive as what Google is doing. From an airline perspective, I think you and your team are doing incredible work, and thank you for affording the time today.

Amanda Woo:

Thanks, Joe. I thank the two co-founders that we have, is Tony and Datuk Kamarudin. They're really the real visionary for all of us.

Dr. Joe Leader:

Very good. Thanks again.

Amanda Woo:

Thank you, Joe.

Dr. Joe Leader:

Okay, and we're out.

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