Recently, Whale Rhino communicated with Jumio, a U.S.-based provider of identity verification, fraud risk assessment and compliance solutions, and Nana Ding, APAC Regional Director (Asia Pacific), on topics such as overseas data security policy security and global SaaS company competition.
1. The security of the payment environment boosts the development of the overseas industry
Jumio started with eKYC electronic identity authentication. The traditional way of opening an account requires the user to go to the counter in person and bring the ID card for verification. The three years of the epidemic have moved this process online, which has boosted the rapid development of online payment.
Nowadays, the development of platforms such as TikTok, Temu, SHEIN, Amazon and other platforms, such as TikTok has 2 billion users worldwide, and Temu has far more than 200 million users. This is also one of Jumio's core businesses.
Talking about Jumio's service business, it includes traditional banking, digital banking, payment platforms, securities and insurance and other financial fields, as well as emerging industries such as sharing economy, social platforms, online games, live streaming platforms, and cross-border e-commerce.
However, when it comes to identity verification, the situation is very different at home and abroad. The identity data of the domestic market is more comprehensive, while most overseas countries lack such a complete coverage database, and most of them only feedback partial data.
One of the core differences, regarding identity verification, the mainland market relies on the ID card database of the Ministry of Public Security, and has already realized data networking and automatic background verification, but the lack of foreign countries is diametrically opposite. Not only is there a lack of compulsory registration, but the database of electronic ID cards is not perfect. For example, the Philippines has not had a unified national identity document for many years, and there are more than a dozen identity documents in various forms, and it was not until 2019 that the unified national identity card PhilSys Card began to be launched, but the registration rate has been less than 50% since its launch in 2019.
Therefore, countries and regions that lack a database with high coverage rely heavily on third-party services to assist in identity verification.
The world's leading Internet and financial companies are bound by various terms. One of the advantages of Jumio, a multinational company, may be reflected in compliance, policy, and supervision.
And the regulation of each country and region in foreign countries is different. For example, the GDPR (General Data Protection Regulation) in Europe has very strict data processing requirements; Mexico in Latin America will supervise and manage some industries and require docking to the database; The requirements are different for every country in Southeast Asia.
When it comes to the development of the company, Jumio is a multinational enterprise that started services in the field of identity authentication in 2010 relying on AI technology. The business is divided into three main segments: identity verification, anti-money laundering screening, and fraud risk signals. At present, the certificate verification capability covers more than 200 countries and regions around the world, serving the Asia-Pacific region, Europe, the Middle East, Africa, North America, Latin America and other markets.
Headquartered in Sunnyvale, California, Jumio has offices and representation in North America, Latin America, Europe, Asia Pacific and the Middle East. The Asia-Pacific headquarters is located in Singapore, which is mainly responsible for market development, sales and pre-sales technical support, customer and other services.
When it comes to the development of the Asia-Pacific region, since 2018 and 2019, Chinese companies such as e-commerce, consumer electronics, and mobile games, led by SHEIN, have gone overseas in batches, bringing high growth to many online identity verification and payment-related enterprises, including Jumio.
In 2024, the target markets for Chinese companies to go overseas will be more diversified, from the original first stop in Europe and the United States, to Latin America, Africa, the Middle East, etc. Some e-commerce platforms have even opened multiple national sites at the same time, which gives companies like Jumio great development opportunities and new business opportunities.
It can be seen that the overseas expansion of Chinese enterprises has driven the development of the whole link of globalization.
2. To make a sea SaaS, you can't just look at the scale of revenue and not look at the profit
In terms of revenue, Jumio was the first in the identity verification industry to reach $200 million in 2022 and has a high growth rate in 2023. Jumio has the largest market share in the global non-continental market in the field of eKYC.
In this regard, industry insiders bluntly said to Whale Rhino that this is a very good achievement for a company in a vertical field.
In recent years, there have been many changes in the overseas industry. Amazon's store closure, Temu's birth, and TikTok's twists and turns in Indonesia indicate that the industry and enterprises are facing collective upgrading and reshaping the interest chain pattern.
So can the traditional price war model continue?
In fact, some leading SaaS companies in Europe and the United States will invest their profits in R&D technology to always ensure that their product strength is always ahead of the market, so that they have the right to speak, and they also have the right to price and even the right to premium. Since it does not participate in the involution of the price war, it will have higher profits to invest in technological upgrading and iteration, organizational reform, etc. Essentially, this is a positive cycle.
On the contrary, the price war leads to the inability of profits to continue to invest in high technology, and gradually involves enterprises in the passive follow-up market, and the competitive advantage will gradually be caught up by latecomers.
To a certain extent, this gives Chinese enterprises a certain reference significance.
However, the leading European and American SaaS companies cannot always sit back and relax, especially in the pursuit of a large number of Chinese overseas enterprises.
In fact, a large number of Internet companies in China have abundant capital in terms of talent, technology, and capital. Just as Temu is developing strongly, it is only a matter of time before it replicates the path of traditional strong Internet companies in Europe and the United States.
Jumio said that companies need to keep an open mind and learn from each other's business aspects. Affected by the different policies of various countries, the development and breakthrough of some technologies are not overnight, and enterprises also need to make profits. And the accumulation of data algorithms such as AI is not a technology that can be surpassed in a short period of time.
Therefore, what European and American Internet companies, including Jumio, need to do is to continue to provide value to users, and then convert it into profits, so that the pursuers will never be able to reach breakeven within 3-5 years, so as to always maintain market advantages.
At the same time, Chinese Internet companies will face pressure from policy supervision and cultural differences when they go overseas.
For example, the response of Chinese enterprises to speed is obvious to all, but foreign countries are not so "volume", and what they see is more of the rhythm of "work-life balance", especially for developed countries with better social welfare such as Europe, enterprises need to adapt to their rhythm, and even face the situation that they cannot get a response from the other party for several days or weeks in business communication.
The EU will conduct anti-monopoly supervision of China and enterprises that exceed a certain size. This is not exactly the same as the ecology of the Chinese market.
In this way, today's overseas pattern is that China, Europe, America, Japan and South Korea are global enterprises, standing at a high level to compete in comprehensive strength. Whale Rhino will continue to pay attention to the stories of global companies. Please contact the author Dai Runze (WeChat dairunze0429).
Leifeng Net, Leifeng Net