Tencent tie-up with Ookbee hailed as boon for startups
Joint venture seen as boosting the prospects of thailand’s digital content providers
A joint venture between global Internet player Tencent and local startup Ookbee is expected to boost digital content in Thailand.
Last week, Tencent announced its investment in Ookbee, which had received funds from InVent and Transcosmos. The money will be used to set up a new startup, Ookbee U.
This deal shows that a local startup can partner with a global player to create an impact on the local startup ecosystem and add to digital content in the country.
Natavudh Pungcharoenpong, chief executive officer of Ookbee, said the deal had exposed Thailand’s startup environment to global corporates and may lead to them investing in more startups in Thailand.
There is no large venture capitalist in the startup ecosystem in Thailand, so startups who get bigger and need a big investment must seek global investors. Examples include Grab Taxi and Lazada, startups from Southeast Asia.
Ookbee U will be positioned as a digital content platform for user-generated content or UGC, while Ookbee is continuing to focus on its core business as an online bookstore platform.
Ookbee U’s business model depends on advertising and paid content, while Ookbee’s content categories include comics, music and literature.
Ookbee U plans to launch UGC categories – including one related to social network-related products – in the middle of this year.
Ookbee has book and magazine services that receive a lot of downloads but have less access than Ookbee U. So, Ookbee U has more monthly active users than Ookbee – four million, against 1.5 million.
Ookbee U is expected to have 12 million monthly active users in the next two years.
It has more potential to become a unicorn startup than Ookbee, but to become a unicorn startup it needs to be more than 10 times bigger than it currently is. So it is unclear if it will achieve that status.
Ookbee is focusing on creating a synergy in related areas between Ookbee and Ookbee U, such as turning UGC content from Ookbee U into e-books at Ookbee, while also finding new business models and launching new products.
“We will launch a new feature for the Ookbee app in the first quarter that is designed to attract people to access the app daily,” Natavudh said.
Ookbee this year is expected to grow its revenue by 30 per cent.
He admitted that UGC content from Ookbee U cannibalised the professional content of Ookbee. However, he said Ookbee would adopt entertainment options with various kinds of digital content similar to Tencent’s, on top of its e-book and audio-book elements.
Natavudh said Ookbee U did not provide duplicate options to Sanook and JOOX
but complemented them. For example, Fungjai will support JOOX with an
online-to-offline monetisation model. While Sanook has its own content team to create its content but all Ookbee U’s content is created by users.
Ookbee U is expected to reach the mark of a million-plus user-generated content in three years.
Digital content boost
Krittee Manoleehagul, managing director of Tencent (Thailand), said that Tencent would create its own platform, but it wanted to invest in a startup in Thailand to help create content.
Tencent Thailand’s role is to create a platform and develop its own content. Content from Ookbee U will be added to Tencent Thailand’s content including novels, comics, music and blogs. The investment by Tencent is aimed at supporting Tencent Thailand’s business strategy.
Krittee will be a broad member of
He said the vision of Ookbee was in line with Tencent’s vision.
He said the focus of Ookbee U was to create a greater synergy with Sanook and OOX and even the new platforms of Tencent Thailand.
He believes that the joint venture is a good sign, showing that a global giant is interested in the digital content sector in Thailand and that the move would help to further monetise digital content in the country.
“We believe that the content platforms we create or support will help encourage content creators to monetise their assets and to attract advertisers to spend money,” said Krittee.
Sanook is the largest portal site in Thailand while JOOX is the largest music-streaming platform.
Ookbee U’s goal is to create content in various platforms to support the business goal of Tencent Thailand.
Sanook has 30 million unique visitors, while JOOX has 24 million downloads. Typically, around five million to six million users visit Sanook and JOOX per day.
“Our goal is to be a giant player in digital content in Thailand, so we need to invest in startups. Ookbee U will support our entertainment and multimedia content,” said Krittee.
Krittee stressed that Tencent wanted to support startup environment in Thailand.
Sanook and JOOX draw on professionally generated content, while Ookbee U relies on UGC and targets younger users.