The CEO Asks Part 4

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Hello everyone. This is Bazaar’s CEO Ohwada. I am really grateful to you for having going this far together with me.
After moving to the students’ city Bandung in Indonesia, Under what circumstances the business model that Bazaar has now came to be in the first place?


「In developing countries where the young generation is going to increase from hereafter, you start your business. Out of those countries, the potential in Indonesia is high and therefore you decided to start your business there right.」


Ohwada「Yes. The diffusion rate of smartphones among young generation is increasing, and it’s becoming the entertainment device they’re most familiar with. That’s why I had already thought as far as doing a game business for smartphone. As I lived there and made various experiments, what I began to understand was that common sense in Japan can’t be applied there.」


「In particular how is it different from Japan?」


Ohwada「First, the internet speed is very slow. It takes around 5 minutes to download a game from Google with the 3G connection their smartphones have. Furthermore, the majority of them are prepaid card users, so to be able to download a 50MB game, they need to pay money that amounts to one bottle of coke.」


「Slow internet, and it costs money, nobody wants to download game applications,」


Ohwada「That’s why you can find APK shops around the town that offer transfer of smartphone applications from PC to your smartphone through a USB cable. Not only transmission infrastructure, the financial infrastructure in Indonesia is also frail. Credit card diffusion rate is only at 3 percent, and bank account diffusion rate stands at 20 percent. The payment methods that are obvious in Japan don’t work here at all.」


「I saw prepaid cards being sold at convenience stores.」


Ohwada「That’s right. But the thing is, the spread of such card is only limited to one part of the region, and there’s also commission fee, which makes it ends up being sold at the price of 10 dollars in retail stores. In reality, if you think about the consumption pattern of the people here, it came to my mind that it’s not easy for people to have 10 dollars in their pockets. People who can buy prepaid cards are limited only to core gamers, is the result of our research.」


「Because a lot of people can’t pay for games, there aren’t so many people out there who want to make games either.」


Ohwada「There’s also promotion problem. The most effective advertisement method isn’t a TV ad or website ad, but it’s your trusted friends saying “Let’s play this together!”. By the way, you can’t do that sort of thing with the current smartphone, that’s why game developers put so much money into advertisement, and carry out a large scale promotion. Then when you think “it seems interesting” and try to download it, which takes some time, it turns out to be not interesting at all. In the past there were game stores who would tell you which games were interesting. There was also the fact that friends lent and borrowed game disks from each other, resulting in a phenomenon where the users naturally increased. The current mobile games ecosystem is missing this sort of promotion mechanism.」


「If you think about it, in Indonesia you can’t get the games, and there aren’t people who will promote them either, so as a result interesting games don’t come out, is the current situation we are facing now, right?」


Ohwada「I want to change this situation. Everyone can get the games and pay for them. And because of that people who want to make games will come out, and people who think of their games as interesting will attract more new users. There’s this old Japanese business idea called ‘三方良し’. In English it’s translated as the ‘Happy Triangle’. It’s basically thinking of a way to make buyers, sellers and creators all happy. And I think the thing that helps make this idea come true is the business model known as platform.」


「Then, what kind of mechanism in particular does Bazaar have?」


Ohwada「As a company, we are providing smartphone games. The mechanism is really simple: you can directly send games you have to your friends. Using our company’s latest technology, you can get a 50MB app within less than 10 seconds.」


「That’s very fast. It’s much faster than using 3G and the likes, and it’s also free right.」


Ohwada「Yes, it is. Everyone can now distribute games to one another, but for those who are registered in our company as ‘partners’, there’s a mechanism that will allow them to receive a share of sales profit every time the users use their money.」


「That’s amazing. To think that you’d be able to get pocket money only by sharing the games you like with your friends and play them together.」


Ohwada「Well, so how can we pay for games then? The mechanism is actually pretty simple, please think of it as ‘pulsa’. If you want points that are used in the game, you can simply call out to our friends and have them sell their points for you. And if you’re wondering whether those friends would actually have points to be sold to you, Bazaar points can be sold at the starting price of Rp. 1000 (about 10 yen, or 0.1 dollar).」


「So even if you don’t have credit card or bank account, you can still pay for games.」


Ohwada「What we were aiming for was to create of a mechanism with ‘customer first’ in our mind, which would enable our customers to pay for games with the money in their pockets.」


「So from now on what kind of games can be acquired through Bazaar?」


Ohwada「Our partners will provide various games. Moreover, we want to make it easier for our partners to distribute games to their friends, that’s why we’re thinking of providing excellent games. We have an extremely large collection of games, and we can’t introduce them all, but there will be popular games, unknown but interesting games, and excellent games that are developed by Indonesian game makers etc. for our lineup」


「It’s really something to be looking forward to. The next part will be the last one, and I will be asking about the development from now on.」