Innovating for a Blue Ocean: Creating an emotional communication service

In just a quarter of a century, consumers have moved from the first Internet browser to powerful mobile applications that provide instant connection and gratification. Identifying the next business opportunity in a saturated market can prove to be challenging for companies. As mainstream Internet services, like Facebook and Instagram, continue to dominate new markets, the rise of niche services may be the Blue Ocean Strategy that companies are looking for.

Niche services can be seen as an unbundling of larger services, focusing on making a particular segment in a repetitive process more efficient for consumers. The challenge in creating a viable niche service lies in the proper identification of the needs, market size and revenue opportunity.

During 2011, the use of Facebook and Twitter grew explosively in South Korea. This growth in hyper-connectivity created a need for more privacy online. Consumers began to look for ways to segregate their online activities, carving out a private space for more intimate or personal activities. Couples were one of the segments that drove this behaviour. While KakaoTalk remained the main mass-messaging app, couples were downloading a secondary messaging app to use as their exclusive communication channel with each other. The behaviour of using separate services to maintain privacy also presented itself in activities like photo sharing and scheduling among couples.

From a business perspective, the couples market presented a strong captive revenue opportunity. An average couple spends close to US$12,000 (Bt392,000) annually on its relationship. This includes obligatory spending for regular date activities, gifts and getaways. By creating a service specifically for couples, the Between app captures the access to help couples discover and obtain these purchases more efficiently.

Between launched as the world’s first private network for couples in November 2011. Between was able to grow rapidly without spending on marketing. In just over three-and-a-half years, Between has reached over 11.6 million downloads, with more than 50 per cent of users from outside of South Korea, and is currently the global leader in the couples app space.

In Thailand, a relatively young market for Between, the strong engagement with couples allowed successful partnerships with local e-commerce company Tarad.com, where special sales saw over three times the regular purchase conversion rate being achieved.

As with any Blue Ocean, competitors will rapidly emerge once a viable business model has been revealed. These competitors will be either in the form of new players with similar services or existing mainstream services that want to neutralise the threat of being unbundled. Being the first mover does not make a leader, as the industry has seen with Facebook’s dominance over Friendster. The key to staying ahead of the curve is to continue to innovate rapidly by leveraging the strong relationship with existing users, accurately understanding their continuously changing needs. Through this feedback loop, Between has continued to enhance its service by adding features such as a collaborative calendar, e-commerce stores, and a private relationship guide.

By focusing on the goal of enriching real, offline-based relationships through an emotional communication service, Between continues to set itself apart from other players in the market. The essence of mixing emotion into Between’s product offering helps create a service that is able to garner high loyalty from users. Creating a community of engaged, loyal, and vocal users is the key for the survival of a niche service.

 

Jake Park is the CEO and co-founder of VCNC, the company behind mobile couples app Between.