by Mark Velthuis, Vice President of Sales, Asia Pacific and Japan, Amplitude
Economic headwinds have been rocking businesses everywhere, and the technology industry in particular has been hit by massive lay-offs. Despite the uncertainties that have been brought about by skyrocketing inflation and the looming global recession, the situation on the ground paints a much different picture.
Amplitude’s Product Report 2022 shows that, despite the grim economic outlook, digital product usage has grown significantly in the past year. This growth shows no signs of stopping. In fact, by 2026, 40% of total revenue from the top 2,000 Asia-based organizations is predicted to be generated by digital products, services, and experiences.
This begs the question – in the midst of unpredictable circumstances, why and how have some product-led companies continued to thrive, and what can we learn from them?
A digital product to meet your every need
When I first read the findings of our report, my first thought was how I couldn’t think of a single organization that didn’t have a digital product.
In a world that sees thousands of new digital products every week, it’s not hard to see why. For many of us, apps and websites are now a core facet of the human experience. Because of the importance they have in our day-to-day lives, digital products now influence where we eat, what we buy, what we do in our free time, and a ton of other decisions, both big and small.
Just recently, my colleague told me that she gets a Starbucks coffee on her way to work not because of the coffee, but because the app is convenient to use. Chances are, she’s not the only one who chooses one brand over the other because the digital experience they deliver is convenient and seamless to use. I, for one, can think of several instances where that rang true for me.
And it’s not just about convenience. More often than not, people turn to products to solve a pain point in their lives. For instance, our research showed that digital products within the fintech space experienced a 337% usage increase from January 2020 to August 2021 – an unsurprising spike as many consumers had to find a way to manage their finances digitally during COVID-19. But this hasn’t been just a fad. Today, many people view fintech apps as the best way to keep track of their finances. As a result, companies like Wagetap and Slice have continued to see significant user growth.
APJ and digital products – always innovating, always creating
I’ve lived in Asia since 2009, and one of the things I love most about this region is its forward-looking culture. In other parts of the world, it is common for people to be nostalgic for the past. But in APJ, people are more excited to embrace new innovations. You see this reflected in the way business leaders operate. Forty percent of APJ executives are quickly developing and delivering new applications to the market, almost double the number compared to the rest of the world (23%). With this strong culture of constant improvement and experimentation, coupled with the ever-increasing demand for digital solutions, it’s no surprise that APJ’s digital product market is skyrocketing.
In Singapore, where I’m based, the government actively encourages this culture of innovation by fostering an ecosystem conducive to the creation and growth of startups – some of which will be the next Grab. This includes giving grants for digital acceleration, artificial intelligence and data analytics, and even for businesses to just stay afloat during tough times. As a testament to the efficacy of these programs, Singapore is home to 12 unicorns and more than 3,800 tech-enabled startups and ranked 7th in the Global Innovation Index 2022. With this kind of support, it’s no wonder we’re always seeing a steady flow of new digital products entering the market.
Learning from the best
If you look at the best and fastest-growing products, a common thread between them is their focus on product-led growth (PLG). A product-led growth strategy refers to putting the product at the heart of the business, meaning the product itself is responsible for customer acquisition, activation, retention, and expansion. Unlike the traditional sales-led model, PLG makes the product the number one revenue driver.
But in order to adopt a PLG strategy, you need to know and understand your customers’ needs. A huge focus of product-led growth is digging deep into product data to understand a user’s journey, which functions of the product they use the most, as well as their pain points. Only then can you finetune your product so that it’s not just meeting but exceeding every expectation your users have?
A great example of this is WeMoney, a personal finance management app that helps users pay down their debt faster. It experienced a 167% growth in monthly active users from 2021 to 2022, due in no small part to its large focus on listening to its users and refining its product accordingly. WeMoney releases and ships at least two to three new features every single month, and each time, their users provide feedback and guide them in what to build next. In a short span of two years, WeMoney has become the biggest social financial wellness platform in Australia – with a loyal user base that just keeps growing. But it’s not just startups that are having success with PLG. Companies like Atlassian and Canva have proven their long-term power. Although PLG could be the right move for many companies, it’s not all or nothing. Many of the most successful companies will adopt a hybrid model. They’ll use a product-led model for small to midsize deals, and a sales-led model for large, enterprise deals that require personalization. All in all, the key for companies is to evaluate which growth strategy works best to drive their business objectives and outcomes.
What’s next for digital products?
No matter what the economy brings in 2023, I am bullish about APJ’s digital product market. Apps and websites will continue to become a bigger part of our lives, but data will be the key to sustainable growth. With data, companies can unlock the power of their products and deliver great digital experiences that keep customers coming back.
At a recent event in Singapore, I asked a group of 25 leaders what their biggest pain point was, and their answers all centred around data. Businesses are sitting on mountains of data, but most of them have no idea what to do with it. Companies that leverage their existing data to better understand their customers, improve their digital product experience, and boost retention will come out on top.
