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Asia Outlook

Axiata Digital Services
technology
ecommerce
digital transformation
Malaysia

AXIATA DIGITAL SERVICES

Axiata Digital Services 

Malaysia’s Digital Dynamo 

As the country continues to embrace a tech-driven society and economy, Axiata Digital Services is developing its portfolio of services to help businesses and consumers make the transition   

Writer: Tom Wadlow  |  Project Manager: Vivek Valmiki 


Malaysia is on its way to becoming a digital society, in part due to the evolving digital landscape in the country.   

It is a huge focus for the country’s governmental authorities, and the recent work of bodies such as the Ministry of Communications and Multimedia has been influential in this ongoing journey.   

“Over the last 10 years, we have witnessed a convergence of new digital technology and innovation which is rapidly transforming the world,” comments Khairil Abdullah, CEO of Axiata Digital Services (ADS), another organisation pioneering digital change across Malaysia.   

“To stay ahead of the curve, more companies will undergo digital transformations as they adopt and incorporate new technologies and solutions to remain competitive and relevant.  

“However, the adoption of digital technologies by some businesses and SMEs in Malaysia still lags far behind, which is a cause for concern because it will be important to be equipped with the necessary knowledge, innovations and skills to thrive in a digital future.”  

It is for this reason that Axiata Digital was established in 2013.   

The digital services arm of the telco Axiata Group, ADS was set up to support the increasingly digital lifestyle and nature of consumers and businesses. It was formed with a team of experts across eight verticals, from ecommerce to entertainment, the division once comprising of some 30 businesses via organic and acquisitional growth.   

“Through financial inclusion, leading the use of data and connecting businesses, we have been addressing digital connectivity gaps in the country, with the aim to narrow the digital divide across Malaysia,” Khairil adds.   

“The premise was we could win in areas where we would be able to capture new sources of value through synergies with our core telco assets like customer access and insights, distribution network, and our brand power.   

“Since then, we have transitioned from a venture builder of tech startups to become an operator of digital companies with the aim to champion the next generation of digital natives.”  

ADS is currently focussed on driving the growth of Axiata’s three core digital business verticals – digital financial services (through its Boost brand), digital advertising (through ada) and digital platforms (through Apigate).   

Global experience  

Axiata Digital is indeed well-positioned to build up the next generation of digital natives, not least because it houses an extremely diverse and experienced pool of knowledge.   

Khairil himself is a prime example.   

Having studied in the UK, he spent much of the ensuing two decades working abroad with global consulting firm Bain & Company, spending time in the US, Singapore, Australia and Germany.   

“In 2008, I moved back to Southeast Asia to help Bain grow its telco practice and start the Kuala Lumpur office,” Khairil recalls.  

“I began to interact with many chief executives of large Malaysian corporations and senior government officials. It was through these interactions that I realised the experiences I had accumulated working all over the world could really help local companies play a role in the global arena.”  

Axiata was one such company he came into contact with, eventually joining the group in 2012 as Chief Marketing and Operations Officer before heading up ADS in 2014.    

For the CEO, this was, and very much still is, the ideal opportunity to reimburse the nation.   

“Joining Axiata in many ways was my idea of national service, giving back to the country that had helped develop me in my early days,” he says. “I was born and raised in in Malaysia but left to pursue a degree from the University of Cambridge.” 

Now imparting his wealth of knowledge gained from abroad, Khairil is not the only example of international expertise helping to build up the company. Hiring from overseas to cover areas such as software development, UI and UX, Axiata Digital has been able to stay ahead of the technological curve.   

In terms of training, staff are regular recipients and encouraged to attend forums, with industry leaders also invited to speak at the company’s premises.   

“We also spend time nurturing a culture that fits in with our values and ensure this underpins decision making and for experimentation and risks,” adds Khairil. “Apart from sourcing the right fit and experience, we also look at the personality of the candidate – the ‘je ne sais quoi’ and how they can contribute holistically to elevate the ADS group.”  

Business enabler  

A major contribution they will be making this year revolves around a key priority for Khairil – to grow the microinsurance and microlending capabilities of the organisation.   

“At ADS, serving the underserved has always been at the core of what we do, and to be able to provide an easy, quick and reliable service of microinsurance and microlending to Malaysians has been a significant milestone for us,” the CEO proudly states.   

“Microlending has helped to address financial issues faced by micro retailers, merchants and SMEs in the market that either do not have access to the usual banking services or lack the documents and collateral required.   

“For example, a nasi lemak vendor might need a loan to move into a proper store front, but without collateral or steady income, coupled with the numerous forms to fill out, it can be challenging. Our digital account lending solution offers financing that can be completed in less than three minutes online, with cash credited into the micro retailer’s account within 48 hours.”  

While this is still a concept in its early days, Khairil is convinced by its potential to meet the needs of younger generations and boost financial inclusion for small enterprises.   

ADS’s solutions can further provide protection against personal accidents, dengue insurance and key man insurance, among other forms of cover. So far, it has issued more than 69,000 policies for the underserved.    

Consumer custodian  

At the other end of the spectrum, consumers are also benefitting from the uptake of digital.   

Khairil cites numerous statistics pointing to Southeast Asia’s embracement of web and smartphone services, including a recent study by Hootsuite and WeAreSocial which found that the region’s digital economy hit $30 billion in 2015, a figure forecast to rise to $200 billion by 2025.   

The Global Digital Report 2019 also revealed that the likes of Vietnam, Singapore, Malaysia, Thailand, Indonesia and the Philippines sit above the worldwide average of 115 percent in mobile penetration.   

For Khairil, this, combined with enabling factors such as infrastructure, regulations and affordability, translates into an enormous opportunity for digital wallets such as Boost.  

“In Malaysia, Boost saw a six-fold increase in its user base and a 14-times increase in average amount spent per user over the course of 2018,” he reveals. “This is a strong and positive indication that Malaysians are accepting e-wallets as a credible, safe and convenient form of payment.  

“In terms of staying ahead of the curve, what we’ve done is build services and features that solve consumer pain points beyond the usual scan and pay.   

“Today with Boost, you can pay for on-street parking, reserve movie tickets, order food delivery, pay utility bills and purchase public transportation tickets, just to name a few key features. We will continue introducing new features and upgrading or adding to existing ones.”  

Some examples of this include an agreement to join Singtel’s VIA alliance and integrate into its cross-border payments setup, enabling users to make payments in partner countries, while a similar agreement with UnionPay International will allow tourists to transact in Malaysia.   

“We hope to see Boost become a single platform that users will rely on not just for payments and transactions, but as a go-to tool for their daily lifestyle needs,” he continues. “We are excited to play a leading role in turning Malaysia into a cashless society, in-line with the government’s ambitions.”  

Fast-track future  

Regarding Axiata Digital’s own ambitions, a recent strategic minority investment from Japan’s Mitsui & Co placed a pre money enterprise value of $500 million on its three core verticals (Boost, ada and Apigate).   

Khairil also reveals an agreement to sell the company’s Digital Ventures portfolio to an international investment fund, Pegasus 7 Ventures Pte Ltd, at a valuation of $140 million. The transaction involved several leading businesses from India to Singapore.   

Further attention is being turned towards the development of an ADS blockchain platform, the project currently in planning stages. For Khairil, this technology has the potential to transform the way in which financial transactions are carried out thanks to its traceability.   

But while blockchain may be one for the future, the CEO is quick to state his optimism regarding current progress towards a digital society, not least because the Malaysian government is firmly on board.   

He concludes: “The Ministry of Communication and Multimedia National Fiberisation and Connectivity Plan (NFCP) was launched last year, and together with its upcoming plans for 5G implementation, Malaysians will become more connected than ever before.  

“This showcases the government’s commitment to promote the digital economy and ICT in Malaysia as the new driver of growth and development.  

“The government would also need support from the private sector to step up and play a crucial role as the main driver of innovation, facilitating digital entrepreneurship and acting as a catalyst to boost our ecosystem.   

“By working with global market players for the exchange of knowledge and technological knowhow, this will help us better manage the realities and inevitable outcomes of the digital revolution and boost our future positioning as a regional technology hub.”