The OnTheList flash sale platform fills a crucial gap in the Asian retail industry. By serving as a third-party vendor of members-only flash sales, it not only offers brands an environmentally friendly way to get rid of past-season stock, it also gives brands access to a growing consumer database with a more direct, D2C-style subscription consumer relationship. The two founders of OnTheList, Diego Dultzin Lacoste and Delphine Lefay, talked to Digital in Asia about their online and offline retail platform.
Digital in Asia: How did OnTheList find a niche in the Hong Kong premium retail industry?
Diego & Delphine: Prior to launching OnTheList, we worked in regional and international luxury/premium retail brands in Europe and in Hong Kong. With such a fast moving industry led by seasonal trends, there is often a lot of past-season stock occupying valuable warehouse space with few options to get rid of them. For many brands in Hong Kong, the only options available were either burning or burying the stock – both of which are not environmentally sustainable options.
That was when we saw an opportunity to launch an independent, third-party platform that would work directly with such brands to host flash sales and give life to old inventory that would have otherwise been destroyed. While this has been a concept well established and received in fashion capitals across Europe, we found that there was no such option in Hong Kong. OnTheList was the first of its kind in Asia. We have since held over 150 flash sales in partnership with over 250 premium brands in Hong Kong.
The “secret” here we believe, is our approach. Through the flash sales we host, we are able to offer consumers access to premium products at attractive prices, and brands the opportunity to clear past-season items and connect with new customers. While our sales are members-only, membership is free for sign up. Additionally, we cater to current consumer habits and preferences – opening sales from 8am to 8pm, making it convenient for shoppers popping in before work.
We also bucked the trend of going digital first – we started with an offline channel as we have always believed that physical presence creates a sense of desire for purchase – our physical flash sales are held over a short time frame of usually just four days, with stock replenished daily and sale mechanics changing. We have since extended our reach online for sales in Hong Kong, but our entrance into the Singapore market will similarly begin with sales happening in physical spaces as a priority.
DIA: Why is now the right time for expansion across Asia?
D&D: In the past two years since the inception of OnTheList, we have worked with a variety of brands, from fashion and cosmetics to wine and lifestyle, from mid-range to luxury. We have also kicked off our online platform. While our flash sales platform is well-grounded in Hong Kong, our regional brand partners are always asking for our services in neighbouring countries where there are few options to dispose of old inventory. With that, we decided it was definitely worthwhile exploring options in Asia.
Singapore was our first country in mind due to similar customer shopping behaviour and general lifestyle similarities. This coupled with Singapore’s strong economy and economic policies, makes it a great country for our first step overseas.
DIA: How are consumer retail habits across Asia changing? Any differences to the West?
D&D: There has definitely been a shift in consumer premium retail habits. Many studies state that millennials are proving to be the strongest demographic segment spending on luxury – brands must cater to this change and understand millennial shopping behaviour both in-store and online. While millennials enjoy finer products, they are also a price sensitive demographic and brand loyalty is not as easy to maintain as it was once before. In recent years, both retailers in Asia and Europe have enjoyed huge profits accelerated by Chinese shoppers, whilst Western counterparts who enjoy the luxury as well have a vastly different spending behaviour.
DIA: How do you help minimise the environmental impact of fashion retail?
D&D: On average, 217,000 kg of textiles would be sent to landfills daily in Hong Kong. Through flash sales, brands are able to dispose of old inventory in a more sustainable form as the old stock would not go to waste and brands would still receive some returns on the unwanted inventory. In the past two years, we assisted over 250 brands, across premium fashion, homeware, and cosmetics, in holding over a hundred flash sales and selling over a million items that would have otherwise gone to waste. For items that remain after our flash sales, we always encourage the brand to donate them to charity and continue to help people in need worldwide.
In a number of ways, blockchain technologies offer advantages over the current financial system. A case in point is foreign exchange, one of the key speculative use cases for the blockchain maximalist: in short, it’s difficult, expensive and slow to send $10,000 overseas using our current system of banking; but it’s easy, cheap and fast to send the equivalent amount in cryptocurrency, free from foreign exchange fees, in just seconds. But no one has actually proved out this use case. Yet.
Enter Singapore startup TenX. They’ve created a global credit card, using blockchain technology to take advantage of fast and cheap foreign exchange, but running on existing MasterCard and Visa infrastructure to ensure payment is easy and scalable.
On the front end users can make payments anywhere Visa or Mastercard are accepted. On the back end, the credit card is linked to a cryptocurrency wallet, meaning assets are held in Bitcoin, Ethereum or Litecoin. TenX instantly converts the cryptocurrencies stored in the wallet into the native fiat currency when a transaction is made, whatever the location.
A few weeks back Digital in Asia met with Toby Hoenisch, one of the founders of TenX, to talk about their ambitious vision to become the only platform necessary to create a bridge between cryptocurrency and existing global payment systems.
Digital in Asia: Good to catch up Toby. Is it true that you launched your first start-up four years ago? That’s pretty early for blockchain.
Toby Hoenisch: Back then, we pitched another startup, not blockchain. It was the same co-founders or partially the same co-founders anyway. It never went anywhere but we learned a lot of lessons back then.
DIA: What were the biggest lessons?
TB: Get users. Don’t just build and hope for the best.
DIA: That’s solid advice for any startup! So, when did TenX kick off?
TB: Three years ago. And that was still quite early for blockchain, three years ago. I’ve been in the blockchain space for five, six years. Part of the funding we used for the previous startup was through early gains and Bitcoin. I’m not a trillionaire right now like how I might wish, because we spent all the Bitcoin we had back then on the previous startup. But we’re doing quite well for our company, so it’s all goo
DIA: What was the inspiration behind TenX?
TB: Connecting the blockchain and crypto world with the real world. Three years ago, it was still crypto-geeks and nerds like myself, and everyone else was like, “What the heck is this?” And it was really disconnected. We wanted to bring the benefits of cryptocurrency to real people. And the first thing to solve is making it spendable.
DIA: Can you just quickly detail what TenX does and the value proposition?
TB: TenX makes cryptocurrency expendable. We have a cryptocurrency wallet. You deposit Bitcoin, Ethereum, tokens – whatever it is – and we give you a debit card that you can attach to your wallet, and then spend it anywhere in the world where Visa and Mastercard are accepted.
DIA: In many ways, you’re moving into an area that is almost the inverse of cryptocurrency, certainly ideologically. And payments are also seeing more regulation recently.
TB: You’re right, it can be complex. But what we do is simple. We’re basically the bridge to the real world of payments. Right now, we have Bitcoin, Ethereum, and Litecoin. But our goal is to get to 200 cryptocurrency and tokens ready for payments within another year.
DIA: And what do you think is the future of the payment space in the short and long-term? Who will be the big winners and losers?
TB: Very early to tell. Depends on the timeframe. We’re still so early in crypto that what we do actually makes sense. Because we connect this new industry to the existing payment rails that are out there. Visa, Mastercard, maybe UnionPay or Alipay in the future. You have to remember, merchants don’t care about crypto right now because there are not enough users out there. Merchants care about revenue first. So for the next five years, I think it will be players like us bridging crypto to existing payment rails. But once you have sufficient penetration on the general population, you actually can do peer to peer payments. And then you can actually directly own merchant payment relationships. Our business will have to change and adapt because there are major interests betting on those legacy players. Crypto will disrupt, but it will take a while, and it may shape up quite differently to how it looks now.
DIA: So what does the future look like for Visa and Mastercard?
TB: They will still be around for a long time. Simply because they’re already there. But they will have to lower their fees to compete with crypto, and the channels will change. The cards themselves have a ten-year shelf life. You might still be paying using Visa payment rails in the future, but you’ll use your phone or other technology. The terminal will still stick around for a while.
DIA: TenX is based in Singapore. How many people do you have? How have you found Singapore as a place to set up a blockchain business?
TB: We have 60 people in total at TenX, and 80% are based here in Singapore. We’re a global company. Crypto is always global. We do have a big user base in Europe. Mainly because three of the four co-founders are Austrian. We have a very strong German-speaking user base. Singapore is good because it’s a relatively friendly regulatory environment. It was a bit of a bet three years ago as a place to build a cryptocurrency finance app in Asia, but today, it turns out it’s one of the top countries to be as a cryptocurrency business.
DIA: How many users do you have and how fast is your growth?
TB: Maybe I should share that we had a bit of a setback earlier in the year. We launched our cards last year, and we scaled really quickly to 200,000 users towards the end of the year, and then our partner bank lost their license. Their Visa license. So our card stopped working. And now we’re working with five different insurers to deliver a live product. So the growth metrics don’t make sense at this point. We are on it. We have new insurers. We have multiple strategies, and we’re trying to get our own license so we don’t have to worry about that anyway.
DIA: Something similar happened to Coinhako, in that their fiat on and off ramps got locked down. Was your issue a Singapore problem, or a global problem?
TB: No. It was a European bank, actually. The good side to that is that this specific payment bank was also the issuer for many of our competitors. So now we know that 200,000 is not the market users. The market is way bigger than that, and all of those users are waiting for a card.
DIA: Who wants to spend their crypto? The market is so focused around HODL right now.
TB: That’s looking at it in reverse. Of course, a lot of people still look at crypto as an investment and hope it should go up. Our users have passed this step, and are like, “I don’t want the old world.” Because there is more friction in the old world than there is in the new world.
Even though the crypto world is still smaller, the financial services you can access here are still less in number than in the old world, this is changing rapidly. And advanced users want to stay in this world.
Some of them, yes, they want to get the maximum upside, but they stay in this world because it’s a more seamless experience everywhere on the planet. And we just add payments to that, so you don’t have to actually go back.
DIA: How do they get their crypto in the first place?
TB: They are already in this world.
DIA: Sure, but unless they’re mining, sitting on a massive pot of crypto which they’re spending bit by bit, or they get paid in crypto, they’re still going to be operating in the non-crypto world. They’re still going to have a bank account where real money can come in. How many people are 100% in the crypto world right now?
TB: We pay salaries in Bitcoin for a lot of people. It’s just so much more convenient. If you run an international company, a small one, you can’t figure out payroll in every country in the world. That’s hard. Bitcoin solves that problem, super easy.
DIA: Cool. Do you think that supports the Bitcoin store-of-value argument?
TB: I mean, Bitcoin has a volatility problem, which is one of the things that people don’t like, or don’t want to put all their money in it, which is a very valid point. In the crypto world, Bitcoin is still the strongest store of value. If it’s the one you should bet on depends on your personal situation. I would say everybody should have some money in the crypto space, some Bitcoin, and then allocate, whatever.
DIA: So, at the moment, you’re a bridge between cryptocurrency and the world of ‘real’ money. Do you have your own token to facilitate this?
TB: Yes. We have the PAY Token, and we launched token sale last year, June. And we continued to work on the exact model, mainly because the regulators keep changing the rules, but yeah. It’s been working very good. When you compare a token sale or a token, compared to venture capital, venture capital, you get around one, two, three investors. Hopefully, they’re all strategic, which they never are, maybe one.
Or you have like us, 50,000 token holders, probably most of them are users. They’re directly related to you. They will tell you what you do wrong. They will care. They will come to your user testing. It’s just so much better. That’s the huge upside that a token sale can do that venture capital just cannot do. Base it on your boredom, hopefully, you pick the right guy to tell you what to do, but maybe one or two. You have 50,000.
DIA: And that community markets for you as well, and they’re influencers.
TB: Yes. Of course. It just goes hand in hand. It’s like, token holders and users, it becomes like a community form of money, or token, or whatever you want to call it. And it incentivizes people to really stick with us.
DIA: That’s awesome Toby. Thanks very much. Very interesting discussion.
There’s been a lot of scepticism recently about where advertising is headed. Online advertising has seen massive growth over the past decade thanks to its flexibility, transparency and measurability—not to mention the ROI. But with this growth comes a new challenge: more than before, marketers must fight to break through the clutter and connect with their target audiences. The rise of obtrusive and irrelevant ads on the web has led to a concurrent surge in ad-blocking software as consumers become frustrated with or indifferent to the content bombarding them. In response, some of advertising’s biggest spenders have started to shift their focus back to real-world tactics such as experiential marketing. This leaves advertising at a tricky crossroads, and got me thinking: Will digital advertising always remain an important instrument in a company’s marketing toolbox? And as an advertising company, how can and should we push advertising to adapt if we believe it to be the way forward?
Xaxis wholeheartedly believes that digital advertising needs to deliver tangible results to continue to be relevant, and as such has repositioned to focus its entire offering on client outcomes. The best way to do this was to understand the client’s advertising goal that ties as closely as possible to the true business outcomes they are trying to drive. So what do marketers need to think about and do differently to truly engage consumers and drive measurable business results?
Artificial intelligence (AI) has completely changed what we can achieve in advertising, from media buying and planning, how to achieve set targets, and the metrics used to understand success. As my colleague Sara Robertson, VP of Product Engineering for Xaxis once said: “AI is like a spreadsheet on steroids”. The potential of AI lies in its ability to see the bigger picture. We’ve made AI and machine learning an integral part of our offerings, used to find and define audiences, refine our creative messaging, generate audience personas, and develop bidding strategies, all of which can transform a digital advertising strategy to drive remarkably improved results for clients.
And while it is true that consumers hate interruption, it’s never a bad thing when advertisers are forced to adapt by creating content that consumers enjoy. One example is a creative new type of ad that has emerged in China to play in breaks of TV dramas online. These ads utilize the TV shows’ original content and narrative arcs, and feature the same actors in their on-screen costumes, making the ad almost indistinguishable from the original content to hold the audience’s attention and pique their interest. This type of advertising is expected to surpass 2 billion yuan (US$311 million) in sales revenue this year, up from 800 million yuan in 2016.
Advertising with influencers also holds increasing importance in the marketing mix as a way for brands to create trust and credibility with consumers. Over the last few years, influencer marketing has skyrocketed to the point that it has become a category of its own. The premise for this is that consumers trust people they already follow rather than an obvious advertiser. Brands are therefore working to get attention from consumers by channelling their message through people with extensive and trusting networks, commissioning influencers to co-create ‘native’ content that advertisers can then amplify. All of this shows that content needs to mimic what consumers already enjoy in order to engage, but advertising itself won’t disappear.
At the end of the day, approaches such as experiential marketing can be a highly valuable way for many companies to increase brand exposure and customer loyalty. But they shouldn’t necessarily replace advertising altogether. Marketers need to look at the bigger picture and focus on reaching business objectives by quantifying success with real metrics and conversions—regardless of the marketing tactics they choose to convey their messages. That means connecting with your customers authentically and holistically, wherever they happen to be – though as we know, people are spending more time online now than ever.
For Xaxis, repositioning our offering to focus on client outcomes was the most logical move. To align with a client’s true marketing and business objectives—and deliver results to hit those objectives and maximize ROI—should be the goal of any marketing tactic. What really sets digital advertising apart is its ability to do exactly that, with more transparency, efficiency and measurability than any other approach. For this reason, we don’t see it dying out anytime soon.
Mobile growth continues to hit record highs in 2018, built on a foundation of programmatic delivery. And that makes it more important than ever to get mobile innovation right, says Itamar Benedy, CEO, Glispa. In this Q&A with Digital in Asia, he talks about GDPR, Mobile Network Operators (MNOs), playables and performance marketing on mobile.
How important are Mobile Network Operators and their data in the mobile first era?
Mobile Network Operators (MNOs) are the sleeping giants of ad tech, but as proven by the recent AT&T AppNexus deal, these titans are waking from their slumber. MNOs will be incredibly powerful in the mobile advertising industry due largely to the vast scale of user data they hold which, if utilised correctly, places them in an extremely strong position to challenge the Facebook and Google duopoly.
What puts MNOs at an advantage is the opportunity for value-added services, delivering engaging content to users and creating additional revenue. They provide an exciting alternative to the limited in-app inventory currently available for mobile advertising. The most important part of mobile advertising is having a direct line of communication with the audience, and MNOs can provide the channels necessary to interact with users through multiple touch points, consequently maximising their potential.
To date, MNOs have done little to harness the power of the data they hold, but we expect to see others follow AT&T’s lead through commercial acquisitions. Hong Kong conglomerate CK Hutchison is one company that has noticed the potential of MNOs and, despite the European competition commissioner blocking its acquisition of the UK’s O2 network, it recently bought a 50% stake in Italy’s Wind Tre in a $2.45bn deal.
How is GDPR impacting Glispa and the wider industry around data?
In spite of the confusion that still surrounds the GDPR, its introduction is largely positive. GDPR is forcing the industry to be transparent and deal with data responsibly, and will ultimately minimise the number of unethical vendors. This will enhance the user experience and pave the way for more open and honest relationships between brands and consumers.
GDPR has also compelled advertisers to think more creatively about campaigns to encourage users to opt-in. We’ve seen an increase in the creation of playable ads because they include an opt-in element that incentivises users to consent to data collection so they can play the game, without forcing them to do so.
As a German-founded company, Glispa has followed strict data usage regulations from the outset, so the introduction of GDPR is having minimal impact on our business operations. We view the GDPR regulations as an exciting means of expanding our creative potential by finding new, fun ways of encouraging user opt-in.
Tell us about playables – how do they work, what are advertisers doing with them?
Playables are entertaining and rewarding mini games that provide a more meaningful and interactive experience than traditional ads. They are most commonly used in the gaming sector where the concept is much the same as test driving a car; allowing the consumer to ‘try before they buy.’ Playables are highly successful in this sector as users who go on to install the full app already know what the game is like and are highly likely to play it regularly.
But playables aren’t just limited to the gaming sector, any brand can create a fun and interactive game ad that will entertain and engage its target audience. Giving users the ability to interact with content leads to better brand recall and enjoyment, thus reaping positive conversion rates and ROI. Interactive ad formats also have map tracking so even if a user does not take the required action, advertisers can see where interactions are happening and derive insights to improve future consumer communications.
Playables are the most effective way to increase creativity within mobile advertising and, as demonstrated in a study by AdColony, are consistently voted as a favourite ad unit, but so far adoption remains relatively slow.
Why are more advertisers not using the playables format?
There are a number of explanations for the slow adoption of playables, all of which will be made redundant in the future. Firstly, brands outside the gaming market don’t always understand the relevance of playables, after all, why make a mini-game when they don’t have a full game to sell? But it is becoming increasingly clear this is an outdated viewpoint and many non-gaming brands, such as Burger King, are making good use of playable ads to boost user engagement.
Complexity is another hindrance to playable adoption. As a new format, there are no proven templates advertisers can use to design and build ads, making playables time consuming and expensive to create. With limited playable case studies in most verticals, advertisers are understandably reluctant to take the risk of investing in the format but this will change as a defined playbook emerges and the complexity and cost of production decreases.
What are your thoughts on the Facebook and Google duopoly?
A noticeable theme of Cannes Lions this year was that companies are ready and willing to challenge the duopoly. The AT&T Appnexus deal and OATH’s acquisition of Yahoo demonstrate the huge leaps telcos are taking and how they are gearing up for battle. These telcos now have the data, user-base and scale, as well as the funds to really pose a threat. Moreover, with Facebook’s well-publicised lack of transparency, it may not take much for companies to start asserting their dominance over the giant.
How do you see the evolution of performance marketing and the role of mobile as a channel?
Performance marketing has evolved from its affiliate roots to play an ever-increasing role in marketing strategies. The main reason for the growth of performance marketing is its unique measurability, which is vital at a time when the pressure on marketers to justify digital spend is increasing and transparency is highly valued.
Mobile is a particular driver of performance marketing. Consumers spend huge amounts of time on mobile devices and we see exceptionally high levels of engagement but mobile advertising is difficult to measure so marketers are turning to performance marketing, which can achieve specific KPIs such as app downloads and re-engagement.
As it becomes a more trusted and widely used tactic, performance marketing is moving beyond traditional monetisation metrics such as clicks and downloads toward more meaningful goals such as user engagement and lifetime value. In fact, performance marketing is proving so effective at driving these outcomes, marketers are beginning to take best practices from this technique to use in brand campaigns.
As a rising star of Southeast Asia’s media tech scene, and the publisher behind theAsianparent.com, AsianMoneyGuide.com, and HerStyleAsia.com, Tickled Media reaches over 12 million women monthly across SEA via its content and community platforms.
We caught up with Adrian Watkins, newly appointed Chief Strategy Officer at Tickled Media, to discuss plans for the future and his enhanced role within the business. As part of his expanded brief, Adrian works alongside Tickled Media Founder and CEO Roshni Mahtani to help develop, communicate, execute, and sustain strategic initiatives ranging from commercial positioning through to wider business rationale.
Digital in Asia: What have been your team’s greatest achievements in the past 12 months?
Adrian Watkins: It was a year in the making, but we’ve redesigned and re-engineered the front-end of theAsianparent, which has resulted in faster loading speeds, higher page engagement, better email capture, and innovations in commercial solutions. We’ve also created an enhanced Brand Solutions programme that offers clients a flexible, data-driven playground where they can manage budgets, split-test new concepts and creatives, and find what resonates with their desired audience over a longer period of time. This process takes them from market research, through to content creation and distribution, social media / KOL amplification, and finally to campaign conversions.
DIA: Have you been focusing around programmatic?
Adrian: We’ve maximised our network yields by signing upwards of 15 new vendors in the automated revenue space, offering a mix of programmatic, outstream and native capabilities, and allowing for better commercial terms while lessening our reliance on Facebook and Google.
But my proudest achievement is building up the team. There is no greater display of growth than a team member picking up a pen to explain in detail what he or she is saying on a whiteboard!
DIA: What’s your next big project as CSO?
Adrian: This company is on the cusp of something truly exciting – becoming the largest women-focused media tech company in the region. Securing our Series B funding earlier in the year allowed us to launch new content verticals to better inform and empower Asian women: Asian Money Guide and HerStyleAsia. We’ve got a couple more in the pipeline so that’s what’s keeping the team on their toes.
Meanwhile, we just re-launched our app for theAsianparent and it’s pretty exciting to be able to work on the largest social network for parents. With easy-to-use Q&A, mums can harness the collective wisdom and experiences of our active community of parents, experts, and parents-to-be, as they share and grow their parenting knowledge.
Watkins was the Founder and Managing Director of data, tech, and marketing consultancy firm PerformanceAsia, and was previously a Board member of the Asia Content Marketing Association (ACMA). He also has a proven corporate track record within world-class organisations such as Virgin, News Corporation, and CBS, leading initiatives in business development, company acquisition, monetising existing and new territories, and building and managing commercial and content teams in multiple countries.
Both Tickled Media and the wider industry stand to benefit from this appointment, given Watkins’ client focus and data mastery. Sachin Pagey, Director of Strategy and Marketing Services at Mega Lifesciences, weighs in: “Adrian’s promotion to Chief Strategy Officer is a great move for Tickled Media and one that Mega We Care fully endorses. I’ve worked very closely with Adrian over the last year for the launch of Baby Natura, our plant-based whole food, in the region. The depth of insight, energy and enthusiasm he’s brought to our long-term partnership is much welcome. We look forward to enhancing this relationship with theAsianparent even further as we launch our new products and move into more markets in 2019. With Adrian’s promotion to CSO, the long-term outlook for Tickled Media is undoubtedly positive!”
Tickled Media Founder and CEO Roshni Mahtani added: “At a time when tech and media are evolving at breakneck speed, we need someone to help usher Tickled into a new era of insight-led innovation. We’re looking no further than Adrian, who has done remarkable things for our campaign delivery process, smoothed out so many operational hiccups, and brought in streams of new revenue.”
Below we’ve collected a series of takeaway resources covering the key digital trends in Vietnam.
Mobile Ecosystem Report Vietnam 2017/18
Vietnam mobile ecosystem and digital sizing report from Group M and the MMA.
Digital in Vietnam 2018
Key data covering the Vietnam digital landscape.
Digital Marketing Agency & Marketer Landscape in Vietnam
Vietnam digital marketing overview from an advertiser and agency perspective.
Vietnam Digital Landscape 2017
Detailed overview of digital stats and consumer internet data in the Vietnam market.
Vietnam Digital Trends 2017
Trends to watch out for across the Vietnamese consumer internet.
Vietnam ICO & Blockchain Market
Overview of the emerging blockchain and ICO scene in Vietnam.
Vietnam Today – The Digital Economy
In depth report looking at the future digital transformation of Vietnam.
PWC Vietnam Spotlight
Deep dive into Vietnam as an investment opportunity and information technology driven market.
Vietnam Esports Market Report 2018
Insight into the growth of Esports in Vietnam..
In terms of other resources, check out Vietcetera for wider coverage of Vietnam, Tech In Asia for tech news, or Geektime and ICTNews for tech news… if you speak Vietnamese. Finally, you can find out all the practical information you need to know about the start-up scene in Vietnam at this Google Doc.
Last December, a new game became an overnight mega-trend in the blockchain world. CryptoKitties allowed users to buy, own, and trade unique collectible cartoon cats on the blockchain. Around the time of launch, CryptoKitties was so successful that it slowed the Ethereum network.
This is a big deal, as the Ethereum blockchain is, without a doubt, the most active smart contract platform in existence. Of the top 100 tokens by market cap, 94% are built on top of Ethereum. Of the top 800 tokens, 87% are built on Ethereum. Most of these tokens are ERC20 tokens, which made possible the majority of the $5.5 billion raised through ICOs in 2017 and the $6.5 billion raised in token sales during just the first quarter of this year.
The driving principle behind the creation of CryptoKitties was to demonstrate the potential of Ethereum and the blockchain ecosystem for trading and securing digital assets. In the white paper, the founders discuss the narrow focus of most blockchain projects on payments. Ultimately, they hoped CryptoKitties would help people expand their vision of what a blockchain could do.
A few weeks back Digital in Asia met with Benny Giang, the founder of CryptoKitties, to talk Ethereum, cats and art on the blockchain.
Digital in Asia: So Benny, where did the inspiration for CryptoKitties come from? How did it start?
Benny: We love cats, and we know it’s a fact that the internet and cats is just married, right? Basically any new internet technology always starts with cats.
We also thought that blockchain seemed pretty interesting, but we wanted to make it more accessible. We saw so many ICOs happening, and we loved the variety. Some were solving really big interesting problems, like world hunger level. But there were some that were just … I don’t even know what they were doing. It’s just getting DJ Khaled to hype up their ICOs! It felt like what was missing was the education and accessibility piece. So we had the idea of putting cats on the blockchain to drive our education and accessibility agenda.
This turned our attention to a couple of existing crypto collectibles like CryptoPunks and Spells of Genesis. These were the first to use the ERC20 token standard from Ethereum, and then create a collectible on the blockchain. But the limitation with the existing collectibles was that they were only an image. We wanted to take it to the next level. So we started exploring the game play, and we arrived on this interesting idea of allowing people to breed their kitties on the blockchain.
We then spent a month on genetic simulations, trying to figure out how deep we could go and how we could evolve the idea. We established a 256 bit genome. That results in about 4 billion variations of kitties. In terms of human genetics, that’s nothing, it’s very controllable. But in game play, 4 billion potential kitties is quite a lot of variations. It was more of an experiment, playing around, and that was the initial genesis of CryptoKitties.
Digital in Asia: Where did you get started with blockchain? Because it seems as if you were already very familiar with the technology. CryptoKitties was more about doing something in blockchain, as opposed to doing CryptoKitties.
Benny: It started in the spring of 2017. I began reading more, specifically on Ethereum. Most of our team, except a couple of members, were already involved in blockchain, the Bitcoin side. They mined Bitcoin, they bought them, they sold them from way back.
From a more typical internet technology perspective, a lot of the product teams and my background was around building B2B Enterprise SaaS Software. I was interested in the concept of the world computer, and creating a decentralised app store to build real utility. That’s really fascinating, and the whole decentralised aspect really caught my attention.
But I love the quote: “Any disruptive technology starts off as a toy”. And in there I saw the opportunity to bring the educational piece forward, in a way that people could learn, but also have fun.
Digital in Asia: Crypto can be complicated. How long did you think it would take people to get their heads around digital wallets, Gas price and all the other complexities of blockchain, and Ethereum specifically.
Benny: In the first week about 80,000 people signed up. These are new users we had never interacted with, and probably don’t even know what a digital wallet is. So that was already a huge factor. 80,000 new people were so attracted to this game that they were willing to jump through all these hoops.
My biggest goals always involve optimizing the experience for the end user. That’s all I care about, that’s all our team cares about. But in blockchain, and Cryptokitties, we’re still pretty far away from having it where you click on the button and everything just works.
Are people scared of Gas and all these things? I would say they are. Sometimes Gas price goes up and they don’t understand why, but that’s kind of our role, and part of why we created the game. Right now we’re building a whole new onboarding process that will help educate: “Hey this is what Gas is, this is why we need it, this is why it keeps fluctuating.” So people will understand.
Digital in Asia: Why did you decide to build on the Ethereum blockchain? There are alternative blockchains out there like Neo, and as we’ve seen with Gas price increases, and congestion, it’s not always an easy environment.
Benny: It was a timing thing and also more of a mission alignment thing. We met some of the Ethereum team last year and saw that these people really do have the builder mentality, they’re very product focused and development focused. Looking at other blockchains there is potential scalability, but in terms of full production readiness, with thousands of dApps already built on top of it, and battle tested, I would say there is only one at this point.
There are some blockchains being talked about in terms of being Ethereum killers, and that may be true, but let’s see when they get full production ready. Practically, if we were to consider these other chains then we wouldn’t have launched CryptoKitties when we did, as we would’ve waited six more months. It was more of we need to do it now, and we need to ship the product because the timing was right, it was when ICOs were popping like crazy. But as you know we didn’t do an ICO. We actually did the reverse ICO where we built the product, and we sold people kitties!
Digital in Asia: Where is CryptoKitties going? What are your future plans?
Benny: We’re going to work towards deepening the user experience. That means more game play features and expanding to new ways of thinking about the platform. It’s very interesting the three areas we play in. One is crypto, the other one is gaming and the final area is art. We were invited to the Rare Art Festival New York, and we asked a bunch of people to basically talk about this new contemporary art form which is digital collectibles. And some people laughed, definitely.
What’s interesting to me is these Kitties will live for thousands of years. What we have done is basically made history. No matter if we are alive, or the company is alive, these kitties will live. We have this concept of infinite extensibility which is related to the kitties as art form.
Digital in Asia: This is an interesting area. What do you mean by infinite extensibility?
Benny: You buy a painting, let’s say it’s the Mona Lisa. It’s pretty old. You just keep it, and you just look at it, right? And as it ages with time, it just deteriorates. But with the digital collectibles as an art form, as time passes, more functionalities can be added. Right now all you can do is buy and sell and breed. But what if you could walk it, what if this kitty could be a real kitty in your mind. So it’s like an art piece that you can continually interact with as time progresses.
Digital in Asia: It’s apparent you’re not actually a blockchain business, you’re a gaming or collectibles business. Blockchain is just the technology you’re building your business on, in the same way that the internet is the technology that Uber or Amazon build their business on. But we don’t – for the most part – talk about that any more. Every business built on the blockchain right now is called a blockchain business, and this is just about the early stage nature of the space really. What other projects do you feel are good enough to transcend blockchain, and become real businesses?
Benny: The whole blockchain gaming and collectibles category is going to be huge this year. In regards to ICOs, there are a few products I find interesting. They’re more related to AI blockchain, and the convergence of the two. But I don’t actively get involved with many ICOs because the space is almost too hot right now. I would rather hang around the people who are developers or product people, who focus on the end view. There is so much work to do on protocols, all these different things. If we want more businesses to transcend blockchain, we need better and more secure blockchain platforms.
Digital in Asia: Okay. On that, are there any ways in which Ethereum limits you?
Benny: Limitations? We really support the Ethereum ecosystem. We have a team of six that are focused on long term scaling of Ethereum, talking to other chains, working with side chains, trying to find the right solutions. Introducing Casper, or at least the MVP of Casper, will be a big milestone for Ethereum this year. If they pull it off without doing a super hard fork, and the community comes to a consensus, they’re going to be way ahead of other people. Because again, they really have the masses, they just need to move the masses to the next level.
Digital in Asia: Do you think there is a danger that they won’t successfully deliver, or build consensus around, sharding or proof-of-stake? We don’t want Ethereum Classic 2.
Benny: No, No, No. Nobody wants that. Ethereum is below 600 dollars right now, which is low compared to a few months back. When CryptoKitties started it was at 400 dollars. So it’s back to a level of normality for us. It’s good for everybody to calm down, and come together around common goals, because we need to think long term. We all know the market was bound for a correction, and while that’s sad because I own Ethereum, it’s good as it lowers costs to build and operate on the blockchain.
Digital in Asia: What plans do you have around mobile? Any sort of AR functionality? People think it would be cool to see your kitties.
Considering new features like AR as a blockchain gaming company who really believes in the philosophy of decentralisation is tricky. If you walk your cat, should that be on a blockchain? When you have a kitty for a thousand years, we think that entire history – including any AR excursions – should be logged. But that’s not easy, and we can’t handle all of the transactions yet. But we are brainstorming a bunch of these new gaming features because that will help keep the experience interesting.
Digital in Asia: Thanks for your time Benny. This has been an interesting conversation. Any final words of advice?
Benny: Blockchain is only just getting started. Thanks again.
From consumer engagement and privacy to technological advances, content strategies and monetisation, data in its various forms is everywhere and companies are challenged with harnessing and analysing it smartly for greater returns.
Here are some of the top trends driving media companies:
Mobile and Social – What Consumers Want
Audiences today expect video to be on mobile. According to Ooyala’s Q4 2017 video index, mobile’s share of video plays in Asia-Pacific surpassed 60% and the medium had the most share of plays amongst other devices in the region.
Social media video continues to grow, driving media companies to lean more on social to promote and enhance their content, and grow their audiences. Content, strategic partnerships, innovation and branding are key to their growth in the future.
The focus on more granular applications of asset metadata has also led companies to AI capabilities. Modern data-driven media platforms connect and streamline content supply chains to help media companies search their content archives for video, audio or text files with facial recognition, language translation, visual text identification, and more.
Immersion with AR and VR
With mobile devices getting more ubiquitous and advancements in 5G connectivity, we’re looking towards a future of more immersive video content, thanks to continuous progress developing virtual reality (VR), 360-degree video, and augmented reality (AR) technology.
A study confirmed that VR increases viewer engagement with journalism, particularly with larger-scale experiences. And VR360 ads were found to perform better than traditional ads, with advanced platforms supporting VR360 playback for VOD and live.
Interest for AR is rising within the wider industry. Consider The New York Times’ integration of AR into its stories, including features published during the 2018 Winter Olympics.
Data at the centre
As media companies strive to be innovative in monetising content and diversifying revenue streams, it is data that will increase their chances for success and lead them into the next era of media.