MACROKIOSK tops in SMS

MACRO Kiosk Bhd, Asia's largest mobile messaging technology company, aims to grow its revenue by 10 times to more than RM1bil by 2022.

Sales topped RM118mil last year. The company forecasts exponential growth over the next few years and says it will reach its target within 10 years.

With profit margin in the region of 20%-25%, that will reap a cool few million into the coffers of this 13-year old company.

"We've got the first mover advantage in Asia. And we are delivering in every sector we are operating in. So we are not letting up," says its chief executive officer Kenny Goh.

"If the moon has connectivity, we will even go there," he quips, reflecting an almost obsessive determination to maximise and consolidate the company's dominant position in the mobile messaging market.

Macrokiosk now operates across 18 industries in 14 territories, including China, Taiwan, Hong Kong, India, Indonesia, Singapore, Thailand, Vietnam, Australia and the United Arab Emirates.

Its clients include global names such as Facebook, Zynga, Abu Dhabi National Oil Corp and AirAsia Bhd. The company's wants to establish itself in another 10 countries by 2015. It is moving aggressively into the Middle East, has commenced work in Africa, and will soon be taking its first step into Europe.

The power of messaging technology

"When we first looked at the business in the late nineties, we found that the telcos had chosen to concentrate on voice technology and viewed short messaging services simply as a marginal add-on product," Kenny says.

"So the technology was already there when we came on the scene. But few people at that time understood the potential of mobile messaging as a business or communication tool. The breakthrough we achieved can be attributed to our ability to use this technology to meet customer needs which were waiting to be developed," he adds.

Macrokiosk was set up in 2000 and moved fast to develop etracker, a global mobile messaging network that enables the company to offer two-way messaging services to anyone who has a mobile phone. That means a potential reach of more than 2 billion mobile subscribers worldwide.

"With this technology, you can send any message you want, whenever you want, to whoever you want. The message can be targeted you can reach a family member, a friend, an employee or a customer. And you can exchange ideas, pleasantries, sell a product, or just convey some news," Kenny says.

"The technology can be put to many users. It allows for two-way traffic and it can also function interactively," he adds. "For example, you can transfer your funds from one banking account to another, change the seating of your flight, book a ticket to the theatre, or participate in a contest to win a prize.

"More and more now realise that mobile messaging is a powerful tool that you can use it to manage your business or personal affairs, and do it in a highly secure environment."

"Macrokiosk's undertaking is that we will deliver your message to any mobile number in the world within 30 seconds," he adds.

Macrokiosk is clearly top dog in its home ground in Malaysia. All the top 14 commercial banks here use its technology to power their mobile messaging services, including making payments, fund transfers and delivering authorisation codes for transactions. Macrokiosk is also responsible for sending out the spending alerts that credit cardholders receive every time they spend on their card.

The aviation industry is also a heavy user of Macrokiosk technology. It now powers the mobile booking and ticketing services of companies like AirAsia and four other regional airlines.

Barriers to entry

What about competition? Will this threaten Macrokiosk's dominance of the market place?

"The possibility is always there that someone will emerge to challenge our position. We already face competition from a number of smaller players, but so far, they tend to serve only individual industries and operate within national boundaries," Kenny says.

"Macrokiosk, on the other hand, is a truly borderless operation. We serve 18 industries and will go into any new sector if it makes business sense. And we are a true digital business we are no respecter of physical and political boundaries. Our mobile reach is truly global," he adds.

Anyone wanting to get into this business will have to address two major challenges, Kenny says.

First, they have to sign up as many telcos as possible and convert them into business partners. Macrokiosk has already signed up more than 500 telcos for this purpose. Telcos serve as function as providers, by giving access to their mobile phone subscribers.

Companies like Macrokiosk are more properly described as enablers. They make things happen by sending messages to mobile phones in different parts of the world which may be powered by different networks, e.g. GSM, CDMA, IMODE, TDMA, ETACS and even Iridium.

Secondly, you may need a licence to operate in some territories, and this may not be easy to obtain. Indonesia and Taiwan, for example, have stopped giving out such licences. China exercises very tight control over these granting of these licences. and Macrokiosk is only one of three foreign companies that have been issued the Nationwide ICP licence to operate across China. And after getting the licence from Beijing, you then have to go down to each of the 32 provinces to obtain approval to operate there.

That's for starters. Once this infrastructure is in place, you have to sign up customers, which basically means talking to companies, educating them about the potential of mobile messaging, and generally marketing your services.

There are many roads to travel, many miles to go, Goh says. Anyone up for the challenge?

Humble beginnings

Macrokiosk can trace its humble start to 1995 when the then 17-year old Kenny Goh decided to augment his pocket money by starting a small business with his two younger brothers Henry, aged 14 and Chee Seng, 11. The trio convinced their father to invest RM10,000 in a server to provide pager services and website designs.

The turning point for the boys came when their father clinched a master franchise to sell Japanese mobile phones in the late 1990's and they were exposed to a new technology that would become the foundation of the future Macrokiosk business.

As much as they want to build up their business, the three brothers decided to complete their studies before giving it their full attention. Kenny graduated with a degree in accounting and finance, Henry studied business and engineering while Chee Seng ended up with a degree in law and commerce.

It wasn't easy for the Goh brothers in the early years as they were not taken seriously because of their age. But the boys were not deterred and after many months knocking and banging on doors and making cold calls, they caught the attention of Goldis Bhd, a KLSE-listed company controlled by businessman Datuk Tan Chin Nam, which agreed to take up a 70% stake in Macrokiosk.

Since then there has been no looking back and the company has grown by leaps and bounds. The Goh brothers are now in the midst of a management buyout exercise to secure full control of the company.

The future

The Goh brothers do not rule out a public listing of the company is not ruled out but this is not considered a priority at this stage. "Our priority is to consolidate our position in Asia and expand our business beyond. We will grow organically and avoid acquisitions as the nature of the business makes that difficult," Kenny says.

The company also plans to widen its sectoral coverage and diversify its customer base. Presently, nearly 80% of Macrokiosk's revenue is generated from the finance, telecommunication and aviation sectors. The company wants to ensure that no one industry or customer will contribute to more than 10% of its revenue.

Kenny says the company will continue to work hard to expand its coverage in China, Australia and New Zealand. It also plans to expand its Middle East operations by leveraging on Malaysia's reputation as a global Islamic hub. "We hope to provide a bridge between Middle Eastern, European and American companies," Kenny says.

"But even as we work hard to expand the business, we have not forgotten what our father told us when we first started out. He said that whatever we do, we must not compromise quality and services for sales.

"We have been lucky to be in the right place at the right time to be where we are today," Kenny adds. "The next stage of our growth will be more challenging and we are determined to build Macrokiosk into a truly world class, global company."

This article is part of a series on Winning Companies companies that have achieved outstanding success through innovation and creativity. Research for the article has been supported by the International Trade and Industry Ministry.