Growing on the potential of domestic football
E-ticketing startup hopes to add more value to football fans and clubs
LOCAL ticketing app Stubapp is optimistic that it can grow in tandem with the local football industry following ongoing plans to privatise the Malaysian football league system.
But unlike other startups, chief executive officer Faisal Karim says it will be a slow and steady growth.
“It’s a very slow transition for the industry. It’s still an ongoing process. The full transition would probably take up till 2020. But we will do our best in the meantime,” he says.
Stubapp started off in early 2015 as a ticketing platform focused on football matches. It has also expanded into entertainment and outdoor events.
Faisal, a mechanical engineer and self-professed football fan, along with his partner chief technology officer Ridwan Rahman, founded the company to provide local football fans with the convenience of e-ticketing.
“In Malaysia, tickets for football are usually only sold on match day. So you get people queueing for hours and there will be huge traffic jams at the stadium. So we thought of doing e-ticketing for the fans, like how you can buy movie tickets online,” he explains.
While the idea seemed good, their target audience was a little hard to reach.
Faisal notes that the majority of its customer demographic are from the sub-urban areas and are usually of the middle-low educated group. They preferred paying in cash and were more comfortable handling physical tickets.
This meant that it would take more money and effort to educate them to buy tickets though mobile or online channels.
When Stubapp launched its mobile app after obtaining a commercialisation grant from Cradle in 2016, they found that 20% to 30% of its customers were from the suburbs.
“So we try to encourage them to use the app by making it very user friendly. And to make it easier, we also allow them to make cash payments at 7-Eleven stores after pre-booking their tickets on the app. So we provide them with various platforms to make payment,” he says.
About 51% of its transactions are carried out in cash, while 40% are done through online banking and only 9% through credit cards.
Another challenge that Stubapp had was to convince football clubs to sell their tickets online.
“Tickets are only released on match day because they worry about the duplication of tickets. But we can help them with security features which is our QR code,” Faisal says.
He points out that in the first two years of operations, Stubapp only managed to get two football clubs on board its app. It was only this year that the team managed to convince more clubs to allocate them a portion of seats to be sold through the app.
“They’ll give us 20% to 30% of seats. There are about 15 to 20 matches a year. On average, we are selling more than 50% of our quota. If we hit about 80%, they’ll give us more,” he adds.
He notes that most football clubs are state-funded, hence, they are not profit-driven entities.
But as the industry moves to privatisation, Faisal foresees more initiative to boost revenue, including raising ticket sales. This will be a boost for Stubapp.
“We can expand into other things as well like selling merchandise and f&b. We can add on more revenue stream for the clubs,” he says.
At the moment, the company makes a commission from the clubs for every ticket that it sells.
Stubapp hopes to build on its base in the football field. It is expanding into ticketing for music and entertainment events that cater to the same customer base.
Eventually, Faisal hope to take the startup to the region.
Last June, it raised a little over RM500,000 through an equity crowdfunding (ECF) campaign. Faisal’s team parted with 23% stake for the amount, which will be used to beef up its technology and for marketing activities.
Among the investors that took part in the ECF round was an engineering company, which produces kiosks and self-operated machines. The investor took up the bulk of the stake on offer.
“This investor see a potential for us to grow into physical ticketing. In Japan, for example, you can go to any 7-Eleven and there will be a machine there for you to buy tickets for any event. That is a model that we can study. They have the hardware expertise.
“Based on our data, only 10% of our customers will buy online. So if we do physical ticketing, the customer conversion cost and technology can be lower,” he says.
At the moment, Stubapp has some 45,000 registered users, half of them are active buyers.
Meanwhile, business development V. Prashant notes the potential for local football.
“Football is a growing industry. If you look at China, they are picking up players. So it is a growing industry. The quality of matches here is not on par with the big leagues. That’s why Malaysians don’t really watch it.
“But if the domestic industry can privatise, the sports will grow in terms of marketing. A lot more sponsors will come in and the clubs will look for more quality players. And this will get more locals to be interested in the leagues,” says Prashant.
“Stadiums have sitting capacity for 30,000. For hot matches, it will be a full house. Otherwise, on average, it is only 30% to 50% filled. So there is also a lot of potential for us to tackle the other 50%. We can’t control the quality of matches but we can do our part with technology, by adding more value so that more people will want to go to the stadiums.
“If we manage to do this, I think other events will not be a problem for us,” adds Faisal.