emerging

Uber-For-Weed Startup Meadow Lights Up In San Francisco

Screen Shot 2014-10-14 at 12.44.11 PMYou can really see where David Hua’s food blogger cred shines with his new medical marijuana startup Meadow. In the app, there is just close-up after close-up of bud.

That’s because as a longtime medical marijuana user, he has an almost weed sommelier-like care and taste in finding quality product.

His new company Meadow lets medical marijuana users quickly order and receive medical marijuana in less than an hour through a mobile app.

Meadow and other startups like Eaze are emerging as the United States undergoes a rapid shift in cultural attitudes and regulation around marijuana. Since the 1970s, about 37 states have liberalized marijuana laws by either allowing medical usage, full legalization or through decriminalization. The New York Times, whose editorial board finally called for legalization over the summer, says that this is a “watershed year” for legalization with half of the states in the country deciding on relaxing prohibitive laws.

With proof that other on-demand service startups seem to be working, it’s creating a unique opportunity to apply the business model to bud. Unlike some of Meadow’s fast-emerging rivals, Hua and his startup work closely with local dispensaries like The Vapor Room Collective. In the app, you can browse through specific varieties of medical marijuana with names like “Jack Diesel” or “Blueberry Kush.”

The company lets people join partner collectives online by uploading their California identification card or driver’s license and then a physician’s recommendation letter. They connect that with a secure, HIPPA-compliant database where the collective can quickly verify their credentials. Hua envisions expanding to other states with a similar model.

He says the hard part about this business is making sure all of the unique laws and guidelines are followed.

“This is not some get-rich-quick scheme; we’re playing the long game on behalf of the medical movement,” Hua said. “Our overarching goal is to implement and publicize a lawful marketplace to demonstrate to medical cannabis opponents that patients can obtain access to necessary treatment without endangering public safety or the rule of law.”

While Meadow isn’t fully integrated with a dispensary’s inventory, that’s the long-term goal. Hua says one of the issues with ordering medical marijuana is that the collective might not know what they have on hand. So Meadow connects with a collective’s up-to-date menus.

By providing door-to-door delivery, patients don’t have to wait in line or have to keep getting their eligibility checked. They charge the dispensary a $3 fee for each delivery and all of their partners accept either cash or debit cards.

As for Hua, he has been involved in startups for years. Before Meadow, he was head of mobile growth and marketing for Sincerely, a mobile gifting company that was acquired by Provide Commerce. Before that, he was head of content at HealthCentral.com. Meadow is currently bootstrapped.

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Tablet Sales Growth Plummets In 2014 As Android Smartphones Continue To Soar: Gartner

As Apple gears up to unveil what many believe will be its latest iPad tablets and Mac computers on Thursday, Gartner has today published figures that underscore the challenge in the market for devices like these against the ineluctable rise of the cheaper, and ultimately more easily replaceable, smartphone.

Gartner’s Q3 and annual figures for device sales worldwide — covering smartphones and tablets as well as PCs of all sizes — shows that tablet sales in 2014 will only see 11% growth over last year, compared to growth of 55% the year before. This works out to a projected 229 million tablets selling in 2014, or 9.5% of overall worldwide device sales, which will total 2.4 billion devices for the year, and 2.5 billion in 2015.

The PC, meanwhile, continues its long-term decline: there will be sales of 276 million units in 2014, down from 296 million in 2013.

The winner in the consumer electronics race continues to be smartphones, and specifically the Android smartphone.

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Devices built on Google’s mobile opeating system will see sales of 1.2 billion devices this year, working out to more than half — 51% — of all devices sold — smartphone or otherwise.

And while there are still sales of feature phones in the market (as evidenced by Gartner’s findings that feature phone-heavy Nokia remains number-three after Samsung and Apple), Gartner predicts that they are not long for this world. It says that by 2018, every nine out of 10 phones sold will be a smartphone.

It’s a trend that will be played out especially in emerging markets, where Android will cross the 1-billion annual market in sales in 2015 in geographies outside of markets like the U.S., Western Europe and Japan. This year, emerging markets already represent nearly three times the number of sales that take place in developed countries (see full table below).

The ultramobile promise

Ultramobiles, the not-quite-PC and not-quite-tablet and not-quite-phone category, will remain niche but continue growing: there will be 37.6 million of these sold this year, and as befits a fast-growing but still-small category, it will grow the fastest. Ultramobiles will essentially see a doubling in sales in 2015 while the other categories continue to see only modest rises.

But ultramobiles are also, effectively, suffering from the same issue as tablets (and to a lesser extent PCs): people are simply not replacing them as much. “In the tablets segment, the downward trend is coming from the slowdown of basic ultramobiles,” Gartner writes. The analysts believe that the life cycle of tablets and ultramobiles is around three years at the moment — meaning buyers this year won’t replace devices until 2018. Gartner says it projects 83 million less new tablet purchasers in 2014-2015 and 155 million less tablet replacements through 2018.

It’s not that these devices are unsatisfactory to consumers; quite the opposite. “I think that maybe they’ve lived up too much to their expectations,” jokes Roberta Cozza, a Gartner analyst and co-author of the report. “There are too many solid devices out there and users don’t have a reason to upgrade to the new units. They are just happy with software upgrades.”

She adds the she thinks tablet makers may already have to start setting their sites more on emerging markets. “I think that this market has really just reached a point of saturation in mature markets. In the US for example by end of 2014 we are expecting a 50% penetration. Things just had to slow down as new users are drawn to another device category, larger display smartphones.”

Samsung on top, but hurting from a lack of must-have new features

Cozza also confirmed for me what many of you probably already suspect: Samsung is head and shoulders above all other OEMs at the moment in terms of sales.

If we take all devices — including PCs, ultramobiles and phones, Samsung is still number one, with around a 20% share this quarter, she says. And to underscore how much Samsung’s fortunes are driving by Android, she points out that Samsung’s share in the PC category is “tiny.”

With Apple in second place at around 10%, Nokia in third just behind it and Lenovo in fourth in the overall category (the Microsoft-owned Nokia still has a pretty brisk trade in feature phones that buoys it), the stage is being set up for some rebalancing in the quarters ahead.

“We’ve definitely seen a slowdown in Samsung in Q2 in the smartphone market, and they’ve been losing share,” Cozza notes. “I think that the issue is that in the premium side of the market with phones, and they will have this even more so in Q3 and Q4, is that will be under pressure from Apple because now of the new alternative with larger display.” By this she means the new iPhone 6 models.

Premium device users, she says, haven’t had “enough reasons” from Samsung to either buy their new devices, or even stick with the brand. “Going form the Galaxy S4 to the S5 or even to the S4 from the s3, there is nothing really groundbreaking that generated a lot of replacement. On the contrary, we are going to see a lot of replacement on the Apple side because the bigger screen is a tangible feature to have.”

The emerging picture for emerging markets

While developed markets in many ways call the shots when it comes to the latest and greatest features and high-end handset sales, it’s the emerging market sector that will be setting the pace for volume growth.

Another fast-moving brand, Cozza notes, is the Chinese handset maker Xiaomi, which is now pushing more strongly into emerging markets outside of its home country. “We’ve seen really their share growing very fast and during Q1 and Q2 of this year, but as the Chinese smartphone market has reached saturation Xiaomi will go into other regions.” Another that will do this is Huawei, she says. “Now all these Chinese brands are really going into other markets, where the volumes will be.”

Indeed, when you consider Gartner’s figures for how emerging and mature markets are comparing in terms of operating systems, you can see how the volumes have massively shifted — a sign of where attention and investment will continue to go in years to come.

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Image: Flickr

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Report: Asia is mad for tablets that make calls, which now account for 25% of all shipments

Fresh from last week’s Jana report claiming that emerging markets prefer large screens, there’s evidence that the appetite for big screens goes beyond smartphones in Asia. According to a new report from IDC, close to one in four of all tablets shipped to the continent (minus Japan) is equipped with cellular voice capabilities.

More precisely, the analyst firm says 3.5 million of the 13.8 million tablets (with seven-inch screens) that shipped to Asia over the past three months were fitted with the ability to make calls like a smartphone. That, IDC says, represents an increase of more than 60 percent year-on-year.

Unsurprisingly all of the voice call-enabled tablets run on Android — that’s likely to include Samsung’s Tab range and more exotic devices such as the ASUS Fonepad.

“This shift highlights the sustained interest among consumers, at least in emerging markets, to have a single mobile device for all their needs… even if the device has a huge seven-inch screen on it. It also helps that these devices are quite affordable, playing in the entry-to-mainstream price bands in most markets,” said IDC analyst Avinash K. Sundaram.

fonepad asus 730x764 Report: Asia is mad for tablets that make calls, which now account for 25% of all shipments

 The seven-inch Asus Fonepad tablet

I’ve seen plenty of anecdotal evidence of people in Southeast Asia, and particularly in Thailand where I live, who buy a tablet to access the internet and a separate feature phone for making calls, primarily because the phone’s battery life is not affected by their Angry Birds addiction and whatever else they do online. Combining the two into one device makes plenty of sense — particularly since tablets are already widely used for taking photos and other activities traditionally covered by smartphones.

Unfortunately, IDC did not provide comparable data for the US, Europe and other part of the world — though we’ve reached out to ask for it.

Certainly plenty of tablets with calling capabilities ship to the rest of the world, but it seems Asia is the primary focus. Indeed, IDC says as many as half of the tablets shipped to India and Indonesia come with voice calling enabled, which suggests that there is large demand for them.

Alongside the rise of large smartphones — or ‘phablets,’ if you can stand the word — the growth in tablet-phones is an interesting trend to watch out for as more people come online for the first time in emerging markets.

Related: This chart shows the world’s internet usage shifting to smartphones

Image credits: Sham Hardy/Flickr, and Intel Free Press/Flickr

Read more: Report: Asia is mad for tablets that make calls, which now account for 25% of all shipments

Dolphin wants to be more than a window to the Web – it plans to be a channel for all your content

Mobile browsers are solidifying their importance amidst the mobile revolution, as more and more people access the internet via their smartphones and tablets, abandoning the desktop experience in the process.

Dolphin is one of the oldest and most popular third-party browsers for Android — we called it a “genuinely beautiful Android browser” in a roundup — currently claiming more than 100 million users worldwide. Dolphin Browser was started in the US back in 2010.

Recently, Dolphin made a rather surprising move by announcing that it sold a 51 percent stake to Changyou, a Chinese online game developer, in return for $30 million in funding.

A mobile browser and a mobile gaming company — there is a link, but it seems rather tenuous. We caught up with Edith Yeung, the vice president of international business development at Dolphin, who assured us that Dolphin will remain an independent company. She told TNW that there are interesting synergies between the two firms that could see the browser become much more than just a window to the web — indeed Dolphin has ambitions to become a central place where users launch most of their content (and that includes games).

dolphin android 2 730x280 Dolphin wants to be more than a window to the Web it plans to be a channel for all your content

Dolphin as a portal

Though Dolphin faces a lot of competition in the mobile browser world, Yeung acknowledged the success of its rival UCWeb — which was acquired entirely by Alibaba in June this year — for being a “content aggregator.” She said that Dolphin is striving to become more like UCWeb, in the sense that it is a portal for everything.

UCWeb has been very successful because they’re basically a content aggregator — if you look at the China version it’s basically a gigantic site map and people access everything through the UCWeb homepage. It’s a portal for everything. Users in China don’t even care whether you’re coming from a browser or not. And that’s what we’re striving to become more so. We should be the center-place where you launch most of your content.

To become a portal for more than just websites, however, requires a lot of technical work to make the user experience on the mobile Web equivalent to that on native apps.

Changyou is a NASDAQ-listed company that boasts a portfolio of popular web and mobile games in China. Yeung said that this is why she thinks there will be “really good synergy” between Dolphin and Changyou, given its expertise in designing for both web and mobile.

Other than that, gaming is something that Dolphin has been looking into — in fact, the company was testing an HTML5 game even before Changyou came into the picture, as they strove to create an experience on the Dolphin browser that was the same in terms of gameplay on an app.

“You can still install your games on your desktop, or still install any app, but at the same time a browser is a platform to access many, many things,” she said, once again reiterating the idea of Dolphin as a central launchpad for content.

Android Settings Horizontal 730x410 Dolphin wants to be more than a window to the Web it plans to be a channel for all your content

Yeung noted that there are certain difficulties involved in creating a great gaming experience in a mobile browser — primarily to get the sound of the game running smoothly, offline caching that allows a user to continue playing without being connected, and the billing process for in-app purchases. This is where Changyou is starting to play a role.

Mobile games are the number one category in terms of revenue and growth for the mobile industry worldwide.

We chose Changyou because they share our vision for the world.  They have an amazing team who concentrate on user acquisition and monetization in China, India, Brazil and Southeast Asia.  We want to learn from them and grow even more in these emerging countries.

We will also work closely to integrate some of their games into Dolphin. The ultimate HTML5 games experience will be coming soon.

Native apps versus the mobile web

As apps become commonplace in the mobile world, along with that comes the problem of having too many apps on your device. In emerging markets, this problem may be even more frustrating, given that lower-end mobile devices may not have that much internal memory, while apps running in the background can mean sapping data.

To this extent, the idea of mobile browsers as a portal would likely appeal to users in emerging markets. Yeung revealed that the $30 million investment from Changyou will primarily be used to focus on growth in emerging markets.

“There are 7.1 billion people in the world and over 60 percent of them still have no internet access. They are in countries like China, India, Indonesia and many other countries across Southeast Asia, Africa and Latin America. The population in these countries will eventually have access to the internet via their Android phone and I hope to see Dolphin becoming the centerpiece and gateway for their internet use,” she said.

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So far in 2014, Yeung said that Dolphin’s daily new installs in countries like Russia, Mexico, Colombia, Argentina, Brazil have increased almost 300 percent.

However, Yeung observed that it is going to be a “long, long war” between the argument of native apps versus the mobile web — and instead of jumping into the war by trying to convert app developers into building for the mobile web, what the company will focus on is convincing web developers to develop for HTML5 instead.

We had very interesting conversations with lots of potential investors, but I think going with Changyou had a lot to do with synergy. This is going to be a long-term play…

I think the role that we want to play is: how do we encourage as many developers and in fact, HTML developers — millions of them — to be excited about mobile and want to create more apps on HTML5. That’s actually a bigger ecosystem thing that takes a lot of energy. It’s not what one round of funding can solve. How do we encourage the normal web people (developers), to get them education and make things easy for them to get excited about mobile? I’m not going to try to preach to people who are already doing amazing on native apps.

Dolphin’s journey to become a window not only into the Web, but to a variety of content, is reminiscent of an appstore — without the apps, but with links to games and entertainment among other offerings.

If Dolphin can recreate a native app experience in the browser, it could very well attract even more users in emerging markets who don’t want to have too many apps on their mobile device. At least with the Changyou partnership, it looks like it’s going on the right track, particularly in games.

Don’t missWindows to the Web: 10 of the best Android browser apps

Headline image via Valery Hache/AFP/Getty Images, third image via Getty Images

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Rocket Internet’s FoodPanda Grabs $60M In Fresh Funding

FoodPanda, Rocket Internet’s food delivery service, has its paws on yet another round of funding. This time it is $60 million from existing investor Falcon Edge Capital as well as Rocket Internet AG. The money will be used to expand FoodPanda, as well as its brands hellofood and Delivery Club (a Russian food delivery marketplace that FoodPanda recently acquired), in emerging markets. This funding round brings the total FoodPanda has raised so far to $108 million.

FoodPanda serves as an online marketplace for restaurants. Customers can order food for delivery through FoodPanda’s mobile app, which also gathers analytics and other information for vendors.

Like most of Rocket Internet’s other ventures, including EasyTaxi; e-commerce companies Linio, Lazada, and Zalora; and price comparison site PricePanda, FoodPanda takes a business model that has proven successful before and replicates it in emerging markets, where the cost of starting a company is relatively cheap. FoodPanda is currently available in 40 countries, with a focus on markets in Southeast Asia, Latin America, the Middle East, and Africa. In Russia, FoodPanda operates as Delivery Club.

In a statement, FoodPanda and HelloFood’s global managing director Ralf Wenzel said: “The new funding will be invested in continuous growth in our existing markets, by partnering with even more restaurants in more cities and further improving customer service.”

The rest is here: Rocket Internet’s FoodPanda Grabs $60M In Fresh Funding

Google Planning A Big Push In India This Fall

Sundar Pichai Google IO Android One

Google is planning a big advertising campaign for its Android One initiative in India this fall, according to several recent reports.

The Information’s Amir Efrati claims that Google is telling potential partners in the country that it is planning to spend “at least several hundred millions dollars” to boost awareness for phones made as part of the Android One initiative.

The Economic Times of India’s report cites a much lower number: approximately $17 million. The Economic Times also states that the push will begin in October and that Google SVP Sundar Pichai will visit the country as part of the launch effort.

While the figures don’t line up — which could simply be due to sources talking about different time frames, i.e. Google could spend $17 million right away with more to come based on how well the campaign does — the news itself makes a lot of sense.

The Indian market is huge and smartphones haven’t penetrated there like they have in the United States or even other emerging markets like China. According to IDC data, smartphone penetration in the world’s second most populated country is at about 10% despite 186% year-over-year growth for the category in the first quarter of 2014.

With Android One, Google is looking to make it easier to launch affordable devices in emerging markets. It’s working with suppliers to ensure cheap but powerful parts used by OEMs will be compatible with the latest versions of Android, providing access to the Google Play Store, and handling updates to the Android operating system while still allowing device makers to install their own apps on devices.

At Google I/O, Google’s Pichai announced that the company is working with Micromax and other device manufacturers in India to bring multiple devices in the ~$100 range to the country by the end of the year. That’s a price range that’s proven to do well in India, with Motorola’s low-margin lineup selling a million units within five months of entering the market.

By getting in while the Indian smartphone market is still in its infancy, Google has a chance to capture a significant portion of it as people are still deciding their preferences in operating system. The Android One initiative is important Google because it gets people into its Play Store ecosystem instead of smaller third-party app stores generally offered on the millions of cheap phones and tablets sold in emerging markets running the open source version of Android.

While it’s not bringing in a lot of money just yet — India has yet to crack the top 5 countries in terms of revenue for Google Pay — App Annie’s latest Market Index suggests that Google is at least doing a good job of getting users into its app ecosystem, with India outpacing South Korea and Russia in terms of download numbers. That puts the country right behind the United States and Brazil, the 1st and 2nd largest countries by app downloads, respectively.

Excerpt from: Google Planning A Big Push In India This Fall

Humans And Computers Will Come Together For Middle Work

Editor’s note: David Greenbaum is CEO and co-founder of Boost Media. Previously, David worked in venture capital and at Goldman Sachs, and was director of strategy and M&A at Interval Leisure Group.

Jon Evans’ post “Welcome To Extremistan! Check Your Career At The Door” on TechCrunch warns of mass penury for this generation and the next as the dual horseman of the techno-apocalypse, robots and software, strip humans of their ability to make a living.

Essentially, he predicts machines and algorithms will consume jobs faster than we can create them. Don’t believe this dystopian vision of the future for a second, because both humans and robots will contribute to the economy in generations to come through a concept called “middle work.”

Today, non-manufacturing work largely falls into one of two categories: purely human (a judge serving sentences) or purely software (a computer serving search results). However, there’s an emerging category called middle work that is neither purely human, nor purely software. This new labor category combines both algorithms and human thought processes and will be an impactful economic driver in the next decades.

Middle work leverages what machines do best – solving low-value, high-volume problems – and combines it with what humans do best – solving high-value, low-volume problems.

Middle work is not just “information work” where humans use computers to complete tasks like millions of people do every day in the office. Rather it’s defined as work that wouldn’t be economically viable for a human to do without a workflow platform, yet  is too nuanced for software to perform unaided. For example, software is great for spellchecking a marketing email, but only a human can think creatively to write an engaging headline to get consumers to click on that email.

Between these two extremes exists a middle-work world where humans use software to make the process of writing ad copy more automated and efficient. In this example, middle work might entail hundreds of copywriters using an online network to contribute potential email headlines, allowing a marketer to choose among dozens of headline options and submit several choices for A/B testing. Contributors whose headlines are chosen would earn money for their work. For marketers, this process is more streamlined and cost-efficient than hiring a stable of copywriters.

Of course, over time, software will become more advanced, but it will never be as good as people at jobs that entail creativity, judgment, empathy and a raft of other uniquely human traits. Middle work combines efficient software algorithms with human ingenuity to create a whole new class of jobs – opening up a large swath of economic opportunity. Humans will be able to use software to perform high-value, low-volume tasks with high levels of precision and accuracy.

In many ways Amazon’s Mechanical Turk was the first software-based middle work company. Today, people use Mechanical Turk to solve low-value problems such as classifying the subject of a picture. But the emerging trend is for middle-work companies to verticalize and specialize, allowing humans to leverage software platforms to solve higher-value problems. In middle work, a workflow platform creates standardized units of work, while a marketplace of human labor provides pools of workers who bring creativity and judgment to the tasks at hand.

To make it clear why middle work will become commonplace, consider the following examples: A non-native English speaker wants to verify whether she is using idioms correctly in professional correspondence. A small business owner wants to file his taxes using QuickBooks but isn’t sure of the correct categorization of a deductible 401k plan. An executive needs an accurate transcription of a meeting, but also to clearly identify each of the speakers and their importance to the group.  All of these issues could be solved by web-connected humans using advanced software platforms.

Because middle-work participants don’t have to find the work themselves (the network provides the work opportunities), they can work at lower per-unit costs but still make substantial per-hour rates because their time is spent only delivering work – not prospecting, invoicing and managing clients.

For many industries, the size of the addressable middle can be larger than the head (top-level salaried positions) or the tail (low-value contract work).  A handful of emerging companies are lowering the cost of producing a unit of work by combining software with human labor.

By addressing the middle, companies are not taking jobs away from people who were doing them before, but rather are adding jobs by unlocking a category of work that didn’t exist in the purely human or purely software realms.

Unlocking the middle is a massive opportunity for entrepreneurs, employees and customers alike in industries as diverse as medicine, accounting, law, and music discovery.

IMAGE BY Shutterstock USER ND Johnston (IMAGE HAS BEEN MODIFIED)

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Why are digital music merchants ignoring emerging markets?

Andrea Boetti is a Business Development Manager at Fortumo, helping web and app developers and digital content merchants build out their monetization strategies for emerging markets.


Spending on smartphone content is shifting away from Northern and Western markets and heading South and East. Emerging markets will soon exceed the US and Europe in smartphone ownership and as a result, most people looking for entertainment on their mobile devices are also located beyond the mature economies.

Yet many of the big digital content distribution platforms like Pandora and Netflix are not available in countries like Brazil, Turkey and India (Spotify just recently entered Brazil). Why is that?

The easy answer is legal rights: music, e-books and videos are usually licensed on a country-by-country basis, and even large platforms need time to expand their business to new markets.

Localization

listening to music 730x454 Why are digital music merchants ignoring emerging markets?

Unlike mobile apps where the content creator is also the distributor most of the time, digital content has a much more complicated distribution process behind it. This problem certainly delays expansion but can be overcome by localization: something completely ignored by most digital content merchants.

The assumption for platform owners and content distributors is that people want to consume the content they have obtained rights to: Western pop music owned by a few large record labels.

While this may be true in markets with strong cultural US influences, 80 percent of the world does not speak English. Have you heard of artists called İrem Derici, Yalın or Бурито? They are artists on top of music charts in Russia and Turkey.

The point here is that often consumers in emerging markets prefer local music. Merchants like Gaana in India and Yala in the Middle-East have proven that providing users access to local music can be profitable as well and increase the number of their users.

Where the money comes from

Another concern holding Western merchants back is the incorrect assumption that there is less or no revenue to be made here. This is reflected in Spotify’s pricing strategy for different regions as it is pretty obvious users in the Philippines have less money than those in Luxembourg.

Often the monthly subscription model is simply inefficient, or just not enough to ensure the huge opportunity for user acquisition offered by the emerging markets. To put things into perspective, the average top-up sum for a pre-paid SIM card in India is 10 INR (0.17 USD) and the average balance is 30 INR (0.50 USD). 

With such low revenue numbers, processing credit card payments becomes unviable to due to fixed fees that are higher than the one-time purchase received from the user. The best way to resolve this is to forget about monthly packages in such markets and transition into daily and weekly billing of users.

From our own payments data, we see that daily access purchases work about four times better than weekly ones – so it’s pretty easy to understand how monthly packages are not an attractive value proposition, except to a tiny share of high-end users. 

pandora android 1 730x280 Why are digital music merchants ignoring emerging markets?

Reaching users in emerging markets is becoming a critical issue for merchants as services like Popcorn Time are gaining popularity and making illegal consumption of digital content seamless. Before Popcorn Time, finding and consuming torrents was for the “tech-savvy.” Now, they have become as user-friendly as reading news on the web.

If the user experience is the same, it’s now up to the legal merchants to create a value offer which is attractive even in low-income economies.

Digital content merchants cannot be expected to expand as quickly as mobile apps have – but understanding the need for localization and targeting mass markets with cheaper pricing (rather than high-end users, which has been the case in the West) will help speed up the process and will help to fight the growing threat coming from piracy.

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E-Book Platform Bookmate Secures $3M To Target Emerging World

Betaworks-style ‘startup studio’ Dream Industries – based in Moscow – has raised a $3 million Series A round from retail giant Ulmart (in Russia) to develop its subscription-based social reading service Bookmate. They plan to take the startup international out of Moscow, starting with Turkey, Scandinavia and Latin America. The funding is part of a $6.5 million package from Ulmart to Dream Industries, with the balance of the raise going to other Dream Industries projects, which include Exchang.es, Theory & Practice, Third Place, Telegraph and Zvooq.

Bookmate is a subscription “social reading” service covering mobile, tablet and web. It claims to have 1.5 million active monthly users in Russia, Ukraine, Kazakhstan and other Russian-speaking markets, including Turkey, and a conversion rate of 7 percent to paid subscribers accessing 400,000 books, and from 300 publishers globally.

The e-book market is big in the U.S. and U.K., but e-book consumption is just starting out in emerging markets. So Bookmate is focused on those developing markets where the competition is mainly local.

Bookmate connects publishers and authors with new markets and makes money by partnering with MNO, device makers, online retailers and local government.

Unlike Amazon, Google Books or iBooks, Bookmate is an open platform that connects publishers and readers directly. So publishers get access to user behavior analytics and have promotion tools for direct marketing. It means they “own” their relationship with their readers – very much unlike the big players we all know.

This is a very interesting move, especially as emerging markets are largely untapped by the biggest players as they really on a lot of infrastructure that doesn’t exist in emerging markets.

Continue reading here: E-Book Platform Bookmate Secures $3M To Target Emerging World

Eyeing Expansion In The BRICs, eBay Doubles Down On Machine Learning And Context Translation

In 2013, eBay announced a big focus on growth in emerging markets for its marketplace, in particular, Russia, Brazil and China. Some of this growth can be enabled through localization, but the marketplace has tested a more technical approach — with machine translation — with its first big expansion effort in Russia.

To spearhead these efforts, eBay brought on machine translation expert Hassan Sawaf, a data scientist whose career spans more than 20 years in speech recognition and human translation technologies. He’s also the patent holder on hybrid machine translation, a system and method for using machine translation to translate from one language into another.

As Sawaf explains to us, language translation can be a source of friction between buyers and sellers on eBay, and his goal was to go beyond word-for-word translation into what he calls context translation. This means that Sawaf is helping build engines that ‘learn’ from context of the data (like item descriptions) rather than just more standard word-by-word translations.

Here’s the current problem eBay faces in emerging countries like Russia. eBay is trying to curate inventory from a global base of sellers and surface this to buyers in emerging eBay markets based on what ships to them in their respective countries. A Russian user can go to the localized version of eBay and see all products that are listed in Russian. When they are inputting search terms in Russian, this engine will produce search results of listings that match the query in Russian. But the Russian user’s query will not be able to see posts that match their query that were written by sellers listing in English. In order to access English listings, which do represent a considerable number of the listings on eBay’s platform, Sawaf explains, the Russian user would have to input the query on eBay in English.

“Machine translation normalizes this,” says Sawaf.

For the past year, Sawaf and his team of 14-15 data scientists and engineers have built a technology that allows Russian users to search in Russian, but be able to return queries with English listings that match. Sawaf’s technology takes it one step further, and will determine that a ‘purse’ in an item description, also refers to ‘bag,’ or ‘item,’ or ‘piece,’ providing a more accurate representation of the item in the Russian language. Sawaf says that the search technology, which just launched a month ago, returns signficantly more results for Russian eBay users. And twice the amount of users in Russia are inputting search queries in their native language. It’s unclear how this has translated into an increase sales and transactions in the marketplace, which is the ultimate goal.

Now that Sawaf has this scalable infrastructure in place, the team will be expanding this to other languages in emerging markets. We hear that the team is tackling Spanish and Portuguese, focusing on Brazil and Latin America.

Some e-commerce companies outsource some of the machine translation work to third-party providers, and eBay considered this, but Sawaf tells us that, “to develop the best, you have to do it on your own.” Plus, there is some third-party user data that eBay did not want to share with third parties.

We’re told that along with this improvement in search, eBay is also attempting to make improvements for Russian users with payments, shipping (an area that has faced some challenges in Russia) and other services in these markets. Another interesting takeaway is that eBay’s ultimate goal in these emerging markets is to offer more in B2C selling on the platforms, and find ways to get more local businesses selling on eBay online.

While eBay says Russia has been a No. 1 priority, it will be interesting to see how the improvement in technologies translates into actual sales. And how eBay’s localization performance in other markets will also be a way in which we can grade whether machine learning is working.

It’s worth noting that India hasn’t been a success story for eBay. As TechCrunch writer Pankaj Mishra wrote recently, despite entering India early, eBay has not become the dominant leader. eBay backed local e-commerce marketplace SnapDeal in a possible effort to make up for past mistakes. SnapDeal is six to seven times bigger than eBay in volume of business. Interestingly, Sawaf and eBay didn’t really mention India in the localization and machine-learning efforts.

But if eBay’s machine-learning technology can translate into an increase of sales in emerging e-commerce markets like Latin America and Russia, this could represent billions in new revenue. Stay tuned.

Photo Credit/Flickr

See more here: Eyeing Expansion In The BRICs, eBay Doubles Down On Machine Learning And Context Translation