What you need to know
While most tourism-adjacent businesses have been battered by Covid-19, FunNow's focus on the domestic market has been key to its unlikely success.
As the coronavirus crushed the dreams of many travel enthusiasts this year, the tourism industry is facing a bleak winter. But in Taiwan, where a lockdown has never been imposed, locals are overcoming the Covid-19 fears with “” and domestic travel.
After Taiwan shut its borders to tourists in March, the local tourism businesses have suffered major revenue losses. One Taipei-based lifestyle startup, however, is rebounding much quicker than its competitors.
FunNow, an instant booking app, reports having a 60-percent year-over-year growth in its Q2 revenue, bolstered by locals hungry for entertainment. Meanwhile, a similar travel booking company based in Hong Kong, Klook, .
Targeting local consumers
Launched in 2015, FunNow has expanded its operations from Taiwan to Malaysia, Japan, and Hong Kong, boasting of over 1 million registered users around the world. The company had hoped to seize the business opportunities from the 2020 Tokyo Olympics before the pandemic sent much of the world into hibernation.
FunNow has so far maintained its growth in Taiwan while its overseas offices are slowly returning to work.
“The outbreak wasn’t as scary in Taiwan, but our retail partners also saw a 30-50 percent drop in revenue and 10 percent of them had to shut down their businesses,” FunNow co-founder and CEO Ting-kuan Chen told The News Lens. “But we’re lucky that our main source of revenue is in Taiwan.”
Unlike most travel booking apps, FunNow targets local consumers rather than tourists. Conventional travel packages such as train tickets or entry passes to tourist hotspots may not be available on FunNow’s platform. Instead, it provides “last-minute” discounted reservation services on restaurants, hotels, massages, karaoke, among other leisure activities.
“Compared to travelers who are on a schedule, locals are more spontaneous, on-demand,” Chen said, noting that around half of the bookings on FunNow are made for the next hour.
To seek out the hidden gems and understand local preferences, FunNow hires local staff for sales and product development in its overseas locations. The Taipei headquarters provide tech and operations support.
While a long-haul recovery awaits most of the travel industry, staycations might be in demand. Expecting a new travel trend, FunNow is forging partnerships with luxury hotels to create staycation packages for domestic travelers.
Flat organizational structure
The company’s Taipei office has an explicit rule for employees to remove their shoes before they enter the workspace. Around 60 employees roam around the open office comfortably in their socks or slippers as if they were working at home. This practice not only creates a cozier environment, Chen said, but it also keeps muddy shoes from dirtying the office floor on rainy days.
FunNow has almost doubled its team size in the last year. Chen noticed the need to adjust the company’s management and communication style once it surpassed the 50-employee threshold. The keys to maintaining the spirit of a startup, though, are to ensure a flat organization structure and speed, Chen said.
Nancy Hsu, a marketing manager at FunNow, said she feels that the employees can freely discuss creative ideas with their managers or even the founders directly. “This helps to speed up our workflow,” she said.
Having studied and worked in the Netherlands, Chen took note of the work culture. “No matter how junior you are, you can speak with confidence,” he said, referring to his experience at ING Investment Management.
‘We need a role model of success in Taiwan’
In 2019, FunNow completed its Series A+ funding round led by Japan’s CSV Venture Fund, bringing its estimated total funding to US$7.5 million.
Since the conception of FunNow, Chen and his co-founders knew they had to move beyond Taiwan to scale up their business. The Taiwanese government has tried to build a competitive startup ecosystem over the past decade by .
Despite these efforts, early-stage financing and talent circulation remain a hurdle for many startup owners in Taiwan. Both local VCs and the workforce are relatively risk-averse because they have yet to see a unicorn startup, especially in the mobile app space, Chen suggested.
“The successful Taiwanese entrepreneurs we see now, like TSMC and MediaTek, are the last-generation industries, but they’re not a case study for tech startups,” Chen said.
Taiwan’s tech startups need to have a “role model” — a pivotal example of success — to attract investors, Chen added. “How else would you persuade someone that the investment return for a startup is higher than that of real estate and the stock market?”
TNL Editor: Nicholas Haggerty (@thenewslensintl)
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