With most of its 245 planes grounded, high-profile Malaysian airline AirAsia is looking to newer businesses to lift its performance in 2021.
While the company has made some progress in industries as diverse as food delivery and logistics, one area that has seen strong growth is its media unit, which has gone from being a miniscule part of its business to accounting for 1% of turnover in under a year, according to the company.
AirAsia has firm plans to rachet this up to 10% (although it did not provide a specific timeline for this goal) as it leans on its inventory of first-party data in Southeast Asia, and like Amazon, builds out its suite of offerings. Central to its plans is a relatively new chat offering that attracted as many as 350,000 monthly active users in 2020, before its official launch, and is expected to cross 1 million.
"We offer our customers a unique omnichannel solution and first-person ASEAN data, along with better conversion rates than the competition," says Sumit Ramchandani, AirAsia Media Group CEO. As the unit seeks to grow its business, it is focusing on engagement over exchange value, as it seeks to build out a base of consumers who spend more time—and money—on its growing 'super app'. The chat function, run as a 'skunkworks' experiment for much of 2020, was launched to the public earlier this year.
"Since early 2020, we have accelerated our digital businesses and expanded AirAsia’s product offerings within the super app to remain relevant and more importantly, deliver greater value to our customers," says Melissa Lim, business lead for AirAsia.com. "During this time, we foresaw a growing need to provide users with a gateway to establish simple and comfortable connections for their main daily activities in one device—and that includes messaging."
Through continuous improvement and optimisation, AirAsia's super app is evolving and will offer a lot more in the coming months. For example, through AirAsia chat’s Channel tab, users will be able to organically follow channels they are interested in (akin to WeChat), to discover the latest promotions and announcements. The super app itself has already surpassed over 10 million downloads, and the business foresees increased engagement once travel restrictions are lifted, harnessing AirAsia’s database of 60 million users.
How does a brand that is best known for its bright-red planes make a successful pivot to a burgeoning media business? Ramchandani admits that AirAsia is yet working to improve awareness and pushing clients to spend more on the platform. "Most brands are not aware of what we’re trying to do as publisher," he admits. "Brands are not willing to invest straightaway in our platform in a pandemic."
To try to address this issue, AirAsia's media business will offer flexibility in pricing and tech offerings to customers. "Our focus has widened beyond travel as our company has indexed towards ecommerce," says Ramchandani. "We have roped in clients in food delivery, tech, duty-free shops and also working with big [ad] spenders in segments such as consumer goods, such as Unilever's Lifebuoy," he adds.
AirAsia Media also wants to partner with agencies to build an attributable solution that delivers clear ROI to their clients, and Ramchandani claims to be in talks with two "large media agencies" as part of this initiative.
AirAsia Media consists of five units: content and creative; media; data and adtech; talent and celebrities; and channels. Ramchandani says brands have the option to run campaigns either using AirAsia's self-service adtech platform or a managed service.
On top of this, the company has a deal with Universal Music Group (UMG), through which it created the RedRecords and RedCarpet offerings in under two months. RedCarpet (not to be confused with the airline's priority boarding service of the same name) focuses on talent-driven marketing campaigns. Ramchandani says its key proposition is to combine UMG's strengths in managing top talent and celebrities with AirAsia's media reach, marketing and content creation capabilities. The RedRecords label has already signed Malaysian actor Alvin Chong and Thai-German artist Jannine Weigel, with more talent in the pipeline. AirAsia is responsible for the entire marketing campaign for Weigel's Passcode single.
As the media business reaches some scale, Ramchandani's team is focused on not just growing capabilities at home in Malyasia, but further afield in Thailand, Indonesia, Philippines and Singapore. A key part of this push will come via RedCarpet channel partnerships, he added, with a few pacts close to being signed in 2021. Previously, the business has signed deals with ChekHup in Malaysia and Walch in Singapore.