Is Localization Even the Right Strategy?

Why growing together in the market you serve works better

When I was at Bukalapak back in 2013, the CEO and founder made us all watch “Crocodile in the Yangtze”, the movie that tells the story of the founding of Alibaba and Taobao, directed by Porter Erisman, one of the earlier VPs at the company.

Bukalapak was early in the years, about 3 years old, just secured its seed funding. I was the first product designer. There was no design or product team. Just a group of 20+ young people in their 20s eager to make a change, and pretty much inspired by the Alibaba story. How, then, Alibaba beat eBay the hell out of China and putting this mantra front and center: Nobody understands Chinese and China like the Chinese do.

I realised that day that Achmad Zaky, our CEO, wanted us to think the same way. We can win this game, because we are all Indonesians, and we understand Indonesians the most. Nobody, ever, in the future, who come to Indonesia from outside, could win us over — we have the advantage of being here since we were born here, and only us understand all the nuances of Indonesia. There’s no way that outsiders, who just spent speed-learning about Indonesia through the internet, or those who only spent a couple of years here, could potentially win our market.

Fast forward to today, I am no longer with them anymore, but I have worked in various companies — mainly foreign companies — trying to “enter” the Indonesian (or more generally speaking, Asia Pacific) market. I spent the last 3,5 years fighting and justifying for a localised product for Vrbo in Asia Pacific market, by which we always think the strategy would be something like: finding the product market fit or acceptance level, finding what criteria we should have to even justify entering a certain market, and then if we do focus on certain market(s), what kind of effort should we do in those? Most often, it will begin with a research and audit, then a strategy somehow, translated into OKRs or plans, then execution. This could be technical, product, experience, marketing and everything in between. The levels of commitment can be different too, some companies brave themselves inside a country with full-geared teams, some only operate from regional hubs.

Either way, I still do not know what works. I am still in my journey, and many of these “outsider” companies are still in their journeys to sort of either win the market entirely or get certain slice of the cake.

But, then, I realise, based on my previous experiences, some of them actually gave up. Of course, they don’t explicitly say it. They might have lost the war, or they just think there’s no product market fit in the region.

This comes to a question: has there been any localised product that wins or is successful in the market?

You could argue, the traditional kind of product, like fast food chains might have done it, and I can assume some are pretty successful at that. Imagine customised menus and marketing materials. But what about digital products like apps or platforms?

I might be wrong, and would love to be proven wrong, so if you have any proven case studies, feel free to hit me up through email.

I have a wildly unpopular opinion, unproven at best, but more like an intuition: localization probably doesn’t work.

Here are some of the things why:

1. Cultural insights: Best local products come from locals who understand habit, culture and local nuances as well as challenges. Often these are done by the people who have lived for a long time than a company or entrepreneur who just spent 5 months studying the market.

2. Risk-readiness/flexibility: This is more than just money, but more about how you want to take a bet in a market and adjust your product accordingly to grow together with that market. Often time, a product has already been so set in stone and so big that nobody wants to take the risk anymore to start from zero.

Just localizing certain aspects of a product might work for some use cases, for certain amount of time, but a digital product is ever-growing, and best done with a dedicated local team, and a willingness to explore and grow together in that market.

I guess the key is that. Are you really willing to grow together with the people and customers you serve in the country or region you operate in?

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Picture by Dan Freeman