AirAsia Digital recently achieved unicorn status (a valuation of over US$1 billion) in what AirAsia Group CEO Tony Fernandes described as a “record time” of under 2 years.
In a report by Swiss-based global financial services company, Credit Suisse, AirAsia Digital is now one of three Malaysia-based companies to be included in SEA’s unicorn club.
The other two include Carsome who became a unicorn in July 2021 after acquiring iCar Asia, and edotco, a telco infrastructure services company.
For clarity, AirAsia Digital is the rebranded digital venture arm of AirAsia Group. Previously, it went by RedBeat Ventures upon its launch in 2018.
This recognition validates the company’s belief that its strategy to grow its digital services was the right thing to do, especially in the face of the pandemic.
But even prior to the pandemic, AirAsia Group was already digitalising aspects of its business, beginning with its move to go ticketless and introduce online booking through airasia.com in early 2002.
Since then, it’s made more leaps in the digitalisation of its ventures, and we take a look back at some milestones in its digital journey thus far.
2005: Launched mobile.airasia.com
This service allowed users to search for search, book, and pay for AirAsia flights on their mobile phones or personal digital assistants (PDAs).
As mobile phone usage was growing rapidly then, the goal was to reach even more consumers while cutting down on operating costs.
2008: Made another move in the e-commerce space
That year, AirAsia launched an online shopping portal called the Red Megastore, which offered an array of exclusive AirAsia merchandise.
Today, the site no longer seems to exist and its operations appear to have moved to airasia travelmall, an online travel retail platform where more than just AirAsia merchandise can be found.
2012: Revamped its mobile app
In July 2012, AirAsia suspended operations of its mobile app to the confusion of customers, but several months later announced a revamped service.
It came with more features, such as the ability to pre-book meals, baggage weight, storage for sports equipment, and more.
However, fans at the time noticed the app had some glaring shortcomings, particularly the inability to check one’s flight booking alongside other bugs and glitches.
Though the company is always pushing the envelope when it comes to being tech-savvy, this rush to launch new but flawed services is something AirAsia still seems to struggle with today, if our recent review of its food delivery service is of anything to go by.
Over the course of the next few years, AirAsia would continue adding features and improvements to its mobile app.
2018: Expanded into the fintech space
Following the rebrand of RedBeat Ventures as AirAsia Digital, BigPay was launched. The e-wallet came with a prepaid card to be used anywhere a MasterCard was accepted, making it one of the firsts of its kind in Malaysia then.
One of its biggest selling points was the accessibility and ease of transacting money globally it offered, and in 2019, the introduction of its e-wallet to bank remittance feature further increased BigPay’s value.
By 2020, it had expanded its services to Singapore. In February 2021, BigPay shared that it had 1.3 million users in Malaysia alone, and that it was one of the country’s largest digital financial platforms by gross transaction value.
May 2020: Taking a piece of the local food delivery market pie
Once flights were grounded during the COVID-19 pandemic, the airline began looking into other digital opportunities to fill gaps in the market.
The company identified that many existing food delivery apps were charging merchants exorbitant 20%-35% commission fees, and believed it could offer the same quality for better rates.
Thus, airasia food was launched. It started out with zero commission fees, but as the business has to sustain itself too, it later introduced a 15% commission rate, believed to be the lowest in Malaysia’s food delivery sector right now.
Within 3 months of its launch, airasia food shared that it had onboarded 500 restaurants around the Klang Valley and delivered close to 15,000 orders.
October 2020: Revealed its new app identity as airasia Super App
You may know airasia Super App as one of the main areas AirAsia has been pouring lots of effort into growing, particularly over the pandemic.
The app’s rebranding was to reflect its goal of becoming a one-stop e-commerce platform for one’s lifestyle and travel purposes.
To that end, it offers more than 15 types of products and services, including the purchase of flights, hotels, food deliveries, grocery deliveries, beauty products, and more. In February 2021, Tony shared in an NHK World interview that the super app was serving 16 million users a month.
In the same month, AirAsia Digital launched Redbeat Academy in partnership with Google. It was initially set up to upskill and cross-train Allstars (AirAsia employees) in artificial intelligence (AI), machine learning (ML), software engineering, and more.
As the next step of the company’s own digital transformation journey, the academy was opened to the public and its efforts were praised by then-Minister of Science, Technology and Innovation, Khairy Jamaluddin.
March 2021: Joined Singapore’s food delivery scene
Seeing further food delivery opportunities overseas as well, airasia food expanded to Singapore after one year in Malaysia.
Despite a slow start of only 100 daily orders even after 4 months, Tony remained unperturbed, describing the performance as being “exactly what we predicted”.
He reiterated that their priority was just to launch it first, and then improve the platform’s technology infrastructure, which appears to be AirAsia’s usual practice. Once the tech was better, they would focus on marketing.
August 2021: Rolled into Malaysia’s ride-hailing scene
One of airasia Super App’s most recent additions is airasia ride, the airline’s attempt at capturing a share of the ride-hailing market in Malaysia.
This came after Tony’s announcement in March 2021 that he was unfazed by ride-hailing giants like Grab’s hold over the local industry, and that AirAsia would soon be launching its very own ride-hailing service.
At the time of its launch, it had already onboarded about 1,500 drivers and planned to onboard another 5,000 by January 2022. Based on projections, airasia ride CEO Lim Chiew Shan stated that they would need 30,000 drivers to satisfy the expected demand.
Similar to its low commission rates for food deliveries, airasia ride takes a 15% commission fee from driver-partners in an attempt to cut a more attractive deal.
October 2021: Recognised as one of three Malaysia-based unicorns
This brings us to where we are at present, with the affirmation of AirAsia Digital’s recognition as a unicorn by Credit Suisse.
Tony stated, “This sends a strong message to the industry that our strategy to become more than just an airline in the digital era is not only on the right track, but allows AirAsia to make a name for itself as a key player in the e-commerce and delivery space in Asean.”
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On the horizon is also drone delivery, if AirAsia’s pilot testing of the technology in March 2021 manifests into something more substantial coupled with the development of Malaysia’s unmanned aerial vehicle (UAV) industry. At the moment, there has been no further news on this venture.
With an extensive history of growth behind AirAsia, it’s likely that this article didn’t manage to cover every single one of its relevant digital milestones, but it’s enough to show its ambition and dedication to its digital transformation.
In the early days, it appeared that AirAsia was one to break the mould, but that it is now opting for the tried and tested way.
Though some of its efforts have been less than perfect, especially with regards to its super app, I still commend the group for doing what it can in order to remain relevant and sustain itself during the pandemic.
Mark my words, we are going to be a major player in the Asean digital economy. Recently we won the Business Innovation category at the 2021 Airline Strategy Awards. Our competitors are already taking notice and the best is yet to come, with new innovations and partnerships to be announced soon that will really shake up the industry, the way we revolutionised the Asean airline industry 20 years ago.
Tony Fernandes, CEO of AirAsia Group.
- Learn more about Credit Suisse’s report here, and AirAsia here.
- Read more of our AirAsia-related content here.
Featured Image Credit: Reuters