The Paktor app aims to take dating in Asia to the next level
Online dating is everywhere, with myriad of apps designed for different dating purposes, and even chat and social media apps function as online dating forums. Although there are still people who are turned off by online dating, it is undeniable that they are popular, especially in Asia. The continent is a combination of frontier markets, emerging markets and developed markets all wrapped into a bundle. The rising young and single population in this region is hungry for dating apps, and it positions Paktor well to enter the scene.
Oi speaks with Joseph Phua, founder and CEO of Paktor, one of Asia’s leading dating apps, to talk to him about how the Paktor story started, how it evolved and what he sees on the horizon. The app has a strong presence in Malaysia, Singapore and Indonesia, and will be expanding to Taiwan and Japan this year.
In 2013, while finishing his MBA in Chicago, Joseph was dumped. That same year, Tinder was only a year into the online dating scene, Okcupid was still mainly US-centric and Coffee Meets Bagel was barely getting to first base. With his newfound singlehood, he was excited and tried them all. After graduation, he moved back to Singapore where he found few online dating apps available, so it seemed only natural that he decided to build his own.
One of the problems that Joseph noticed when building Paktor was the dilemma of the genders. Dating apps tend to be lopsided—there were more men than women. Therefore, his first insight was to make it much easier for women to get in the platform and much harder for men to get in. The result was a game theory solution where the platform has a more balanced set of singles.
The lesson here is: when you are building a two-sided marketplace, make sure to balance them. By balancing, the network effects are more sustainable.
When Paktor first launched, it entered 12 countries. For many in the region, their biggest question is when should they expand beyond their local market. For Joseph, it’s a matter of temperament and stability: “I think really, one of the keys to our success is that we were lucky. When we arrived onto the scene, there were 13 other players. We got funding and we all made mistakes, but we picked the right two to three markets after securing our first market. By being strong in one market, we could fund the growth of subsequent markets. The dilemma of being dominant versus being stable is that if you choose dominance, than it’s hard to make money. Our philosophy is that you need a pot of gold first that can fund your expansions. And it comes down to knowing when you are ready. For us, when the uncertainty dissipates and you are not filled with fear than you can move on. The numbers give you a feel where you can manage your fear. But at the end of the day, it’s a balance between confidence versus fear.”
Today, Paktor operates in six core markets, with three of them being the backbone of the business. For some, it’s unclear where Paktor stands in a very competitive and complex market, however, Joseph thinks one of the keys to being a good entrepreneur is seeing what others don’t see, and optimizing the business around those opportunities.
“What we’ve learned over the years is that this is not a winner-takes-all market. Tinder dominates many markets, but in some markets it lags behind,” he says. With Paktor, on the ground, and close to the users, it has many touch points that translate to new markets for growth. This is especially true of Japan, where Joseph says you must be even more localized.
“In Japan, we couldn’t be seen as a foreigner, and had to be localized to their population. We have to re-engineer the app so people feel that we are Japanese.”
17 & Dating
Joseph’s journey at Paktor has been a surprise for him and a learning one. His early enthusiasm has turned into a careful maturity about the future. “If I had known I would have picked a different industry, because this is very hard. The thing about the dating industry, keeping people constantly engaged, what the industry needs is a breakthrough in content or models that is engaging while also being used for data.”
This may be one clue into how and why Paktor has been embarking on new models like 17 Media. According to Joseph, “dating cannot be your only market, since many apps are minimally differentiated. So you have to break out of dating somehow.”
Social Entertainment is an industry with plenty of potential for growth, and mobile livestreaming is its newest frontier. While desktop live streaming is already popular, especially in countries like China and Korea, mobile live streaming has redefined the landscape with the proliferation of smartphones. This presents all new opportunities. Fueled by the ever-growing mobile smartphone penetration around the world, mobile live streaming has the potential to grow beyond the desktop. In the past, interaction is limited to near-real time where users can post comments on status text, photos or videos. The level of engagement through other social media is nowhere as close as live streaming. Live streaming enables idols to engage directly with fans, instead of fans talking to copywriters employed by the idol.
This is why 17 Media makes sense. 17 Media became popular with teenagers sharing photos and earning monetary rewards from the number of likes they received from users on their photos. In addition to this, 17 offers the ability to live stream directly on the smartphone. Though it was founded in 2015, 17 has dominated the Taiwanese live streaming market. With Paktor’s recent deal to gain a controlling stake in 17, Southeast Asia will be in the headwinds for 17’s live streaming service. Partnering with MNC Group, 17 Media has begun its Southeast Asia entry in Indonesia.
2017 promises to be a unique year for Paktor. Referring to the early days of Paktor and the new frontiers, Joseph reflects, “We likely won’t see this crazy growth again. This year is where we will rediscover ourselves. Rebuilding ourselves fundamentally, taking the time to discuss, pushing to break even—pushing to innovate.” Indeed, live streaming may just be the start of Paktor’s entry into expanding the dating frontiers.