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iMail   |  March 10 2001 M is for commerce
Tony Surtees		EMAIMAI, the company responsible for bringing Chow Yun-fat stamps to the post office, is now moving from collectibles to mobile commerce (m-commerce). Tony Surtees, the former head of Yahoo!'s e-commerce group, sees China along with Hong Kong as one of the largest potential markets when it comes to m-commerce. He is planning to unveil the "new" emaimai before the end of June and add another 50 to 60 staff in the interim. Mr Surtees, who was recently promoted from chief operating officer to CEO, left Yahoo last October where he is known for substantially expanding the portal's auction sites. Mr Surtees saw a "gap" in the m-commerce arena about a year ago when he was still in Silicon Valley. The executive, who bets that Asia will be the hottest market for wireless and m-commerce growth, says Hong Kong and China are an m-commerce business' dream. "I came here with a mission to turn the assets and provide something that had greater impact on the market," the executive says. In doing research to build e-commerce he came "across a number of very interesting strategies and methodologies". "The thing that I found most captivating was how people could use mobile telephony as the platform to make people-to-people and people-to-business payments." "Tony just loves Asia," says emaimai's chairman Moshe Malamud who interviewed 39 candidates for the position before choosing Mr Surtees as chief executive officer. "He loves China even more than Hong Kong, not for the living but for the market opportunity. I mean they're saying it's a market of one billion people." Emaimai seems to have its finger on the right spot. The consulting company Ovum forecast that Asia would have 140 million wireless subscribers by the end of 2000, with almost 23 million of them active Internet users. Hong Kong, Singapore, and Taiwan are expected to have greater wireless penetration. Wireless subscribers in Japan and Korea have already surpassed fixed-line subscribers, and China is expected to have over 70 million subscribers by the end of this year. Ovum also forecast that m-commerce services will soon be the driving force in the mobile location services market, and will be worth US$20 billion (HK$156 billion) by 2006. Mr Surtees and his team are currently creating wireless m-commerce solutions that will hopefully revolutionise the way that consumers and businesses make transactions. In other words no more queuing up at the bank or supply store or waiting for a fax to go through. It will hopefully save consumers and companies time and money, says Mr Surtees. He was also struck by how common the mobile phone is in Asia. "People trust the mobile phone while they don't trust the Web. People have access to the inter-network infrastructure that represents that cellphone, and the mobile phone becomes the remote control to life." Hong Kong has a mobile phone penetration of some 78 per cent, according to the SAR government, and in China, mobile phone users are growing by some one million per month. It is estimated that by 2003 the user number will hit 183 million. Emaimai is looking to make everyday transactions easy for the man in the street and businesses by allowing them to do business through their mobile phones. Depending on the market, the company will offer person-to-person or business-to-business transactions. Functions that are powered by technology from IBM, Microsoft, Apple, Ericsson, Chinadotcom, among others, will include buying and selling on the Web, and paying for professional services. The secret to success is speed, Mr Surtees says. "We're looking to make 15,000 transactions per minute, which will take an average of four to five seconds." The native Australian was in part inspired by NTT DoCoMo's iMode that has struck a chord with Japan's young and smart set. IMode users can do everything from trade stocks, participate in online auctions, make bank deposits and eventually purchase tickets and stamps through their phone. Mr Surtees, who was a Sloan Fellow at Stanford University's graduate school of business, wants to get started right away. He doesn't want to wait for the coming of 2.5G or 3G network. Emaimai, a catchy translation of what literally means "buy/sell" in Chinese, won't lose its buy-and-sell initiative. It is looking to be a selling platform for companies that want to showcase their products, which could range from office supplies for small and medium-scale enterprises to financial services from a bank. They are not looking to sell common consumer items. Mr Surtees is well aware that the competition is fierce. "The difference in what they plan to do and we plan to do is we plan to do it now, with no new technology, and leveraging the installed base of GSM (global system for mobile communications) phones as they exist today," he says. "The company that captures the market first and provides real functionality owns that market." Emaimai is not looking to selling its own products, but will be a platform for businesses selling discretionary products. In order to differentiate them from the pack, emaimai will be initially targeting small businesses, and then the man in the street. It will be looking to co-brand itself with partners who already have a critical mass in the market. Partners would primarily be in the area of financial services, telephony and merchant sales. "We want to achieve critical mass fast," he says. He estimates that it will take emaimai 12 months to have a comprehensive service. Currently the company's technology crew is based in San Diego, and it has offices in Shenzhen, Shanghai and Sydney. Investors include Henry Kravis, the CEO of institutional investment firm Kohlberg Kravis Roberts, venture capital firm Odeon Capital Partners, and New York real estate equity investors The Wolfson Group, responsible for many of the buildings that make up the New York skyline and financial district. Eventually the company would want to go public when the timing is right. Until then the company will make its money from the minimal fees that it will charge users. Mr Surtees declined to comment on potential partners, but does stress that his goal is to be the pioneer in the market. The business could well be global, although he is cynical that it would catch on in the United States where mobile phones haven't caught on as quickly as in Asia. "The US is a uniquely bad market for this stuff," he says. Emaimai decided to change focus from its online auctioning business after it discovered that e-commerce wasn't taking off. As former e-commerce players such as Jimmy Lai's defunct adMart know, the business has a limited market in Hong Kong where shopping is a major activity, and the proximity to supermarkets and stores does not encourage shopping online. "We feel that what's important right now is to look for where the gap is, and we found the gap in the marketplace," he says, nodding towards a mobile phone.