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Taiwan’s software power revealed: How last minute reservation app FunNow snatches victory in Malaysia, Japan and Taiwan
One Taiwanese internet company is aiming to reinvent the booking process. Facing an extremely fragmented market, What is their strategy to integrate and expand services?
Beer with friends at a bar, family dinner at a cozy restaurant or a relaxing afternoon at the spa—all leisure activities were wiped out by lockdowns and social distancing. As the world rehabilitates, people can’t wait to connect with friends and family once again. They literally can’t wait — people want to book reservations on the spur of the moment.
Taiwan-based lifestyle reservation app FunNow captivated venture capitalists with its last minute reservation service, reaping in USD$15 million B series funding in 2021. The consortium of investors included Ascendo Ventures from Korea, NEC Capital Solutions from Japan, Perfect Hexagon from Malaysia, Wistron and PChome from Taiwan.
The reason why FunNow has multinational VCs calling dibs on lies in robust software architecture, common vision of co-founders, and the ability to localize overseas services.
“We saw the pandemic as an opportunity to upgrade our software strength,” Furthermore, the hit of the pandemic sent single service lifestyle apps to go out of business. A number of massage reservation, dining reservation apps closed down due to lack of traffic. A case in point is Jakarta tech giant Gojek, who was forced to terminate GoLife in 2020, which provides massage and home cleaning services on demand.
The failure of single-service apps thus revalidates FunNow’s mission of building an integrated lifestyle reservation platform. With its wide array of beauty parlors, fine dining and handicraft class reservations, FunNow is poised to become the Southeast Asian equivalent of Yelp. “In two years time, we are hoping to grow into the biggest lifestyle reservation app across Southeast Asia,” said TK Chen, co-founder and CEO of FunNow.
From backpackers to start-up founders
Established by a team of travelers-at-heart, FunNow is a Taiwan-based startup that comes with a long lineage of foreign experiences. While studying and working in the Netherlands, TK Chen treaded all across the European continent. “During my trips, I often use reservation apps to book flight tickets, broadway shows and places to stay the night,” said Chen.
At the time, Taiwan was still an unexplored land for last minute reservation apps. More particularly, Chen wanted to go for a “last minute” platform that catered to spontaneous customers, which was not an easy task due to technical complexity. Combining rare competitors and high software capability requirements, Chen and the team decided to venture into the vast blue ocean of on-demand reservation.
Last minute business model is a great fit for big metropolitans, where city dwellers are on the constant lookout to paint the town red. FunNow eyes densely populated areas in East Asia, now offering services in Taipei, Tokyo and Kuala Lumpur, all of which are bustling cities with leisure activities in full bloom.
Malaysia sees the biggest commercial success for FunNow. In 2020, notably at the height of the pandemic, FunNow acquired Malaysia’s leading provider of dining reservation TABLEAPP. This act comes as no surprise as FunNow is set to expand services in Southeast Asia, a grueling market to tackle due to its diversity of languages. It later proved that the addition of seasoned local teams and experts comes as great assistance for FunNow.
With the joint efforts of FunNow Malaysia, the startup has become the largest instant booking platform in the region. In April 2022, its performance even reached twice as much as before the covid outbreak in 2019. FunNow is emerging out of the pandemic stronger than ever.
TK Chen used to be an investment analyst at ING Investment Management. Chen’s financial acumen played a key role in his startup adventure, equipping him with the expertise to manage funds and present pitches to investors. “Now that I’m a startup founder, I’ve experienced a role swap. In the past, it was my job to challenge the financial condition of a startup'. It’s the other way around now,” said Chen.
FunNow aims to become the biggest on-demand reservation platform in Southeast Asia in two years time. Leveraging the Taiwanese software talent to build out app infrastructure, while combining the valuable insights of their global team, FunNow is grabbing the attention of consumers and investors all at once.
How FunNow planned to become the largest lifestyle reservation app in Malaysia
Foreign market expansion is no wild goose hunt. Hence, market evaluation is always the first and foremost step. A former investment analyst, Chen broke down the basic but core math behind FunNow’s oversea location decisions. First, your demographic is carefully chosen. For example, FunNow selected 25-35 year olds as their subject, as those of the age group use smartphones most frequently. Then, you take the consumer consumption spending among that age group, and look into the entertainment portion of their expenses.
“Appropriate market evaluation is the first step to successful overseas expansion,” said Chen. Along with the second tip, localization, Chen said these are the two factors that constitute “a good eye” for tapping into the foreign market.
Markets are unique in terms of language, consumer behavior and special preferences. In the wake of varying consumer cultures, FunNow employs so-called launching teams in a new market, hiring local experts who can offer insights on native preferences.
“Hiring locals is a great gateway to localize your services,” said Chen. FunNow values cultural diversity and fulfills it through their business strategy, thus gaining trust and traction from users with completely different cultural and linguistic backgrounds.
In Malaysia, the launching team found that local beauty parlors and restaurants are resistant to reservation service for two reasons. First, they’ve suffered bad experiences with no-show or late customers. Second, they are unfamiliar thus reluctant to implement digitized tools such as iPad, crucial to their reservation services.
FunNow cannot stress the importance of localization more. They assigned local BD teams with tasks such as persuading and educating small business owners to join FunNow. In the end, FunNow successfully lured more beauty parlors and restaurants with exclusive benefits such as brand name exposure opportunities. Moreover, upfront payment gains trust with business owners, freeing them of the worry of being stood up.
Breaking language barriers is a big highlight for FunNow user-end and client-end. Knowing its advantages, FunNow tapped into the Japanese market, which is known for high entry barriers but strong customer loyalty. Owing to friendly bilateral ties, Japanese businesses generally hold a positive comment on Taiwanese tourists. FunNow further made it their competitive edge. “Our platform saves Japanese shop owners the trouble of communicating in poor English. On the other hand, we allow Taiwanese customers easy access to authentic Japanese lifestyle. ” said Chen.
A reservation platform for all
A solid 360 degree solution is long-awaited in the last minute reservation business. FunNow sets to retain customers through a reservation ecosystem, which features rebates offered to customers, the Fun Coin. There’s more to the ecosystem—FunNow expanded their service line from urban leisure activities for grown-ups to learning activities for kids.
In 2021, FunNow acquired Niceday, a Taiwan-based reservation platform designed for children. A diverse range of activities can be found on Niceday, including kiddie cooking lessons, paintball training sessions for little ones, and parent-child racecar camps. Although experiencing dropping birth rates, the kids learning market is expected to rise as parents allot a growing budget to their children.
“Our team believes if kids can have a nice day at play camps, parents will have a chance to seek for fun now,” said Chen, making a play of words on the two main services the startup offers.
FunNow managed to turn the tide. Amid the pandemic, FunNow strived to boost platform traffic by gaining customer trust. Measures include rapid-test requirements for masseuses and offering take-out options for restaurants. FunNow’s prompt reaction and smart strategy proved successful in their sales revenue, which grew by 200% in 2021 compared to 2019.
Swift reaction to unfavorable conditions, buildout of the reservation ecosystem, and efficient implementation of localization are the steps FunNow took to emerge more resilient in this ever-changing environment.
Reservation platform is a winner-takes-all business. The FunNow team suffered resistance from the market at first due to lower digitization rate. But as time progressed, more businesses jumped aboard. “The entry barrier is high for last minute reservation service. However, it also serves as a business moat for us,” said Chen in an optimistic note.
The aritcle is supported by National Development Council
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