While the likes of Wix and Squarespace have been waging a lucrative war to house small business websites, this tech company is leading the way for small business apps.
AppsVillage has so far received strong commitments on its IPO roadshow ahead of its ASX listing next month
The strong support comes from AppsVillage’s software-as-a-service (SaaS) tech revolutionising app development and making marketing campaigns accessible to small and medium businesses (SMBs).
It does this by automating app development and delivering significantly lower costs to the end user, compared to other app developers.
Building an app with AppsVillage will cost the SMB ~$20 per month, on an 12-month subscription plan — significantly lower than other app developers that can often charge anything between $25,000 and $1 million for the same end product.
By using the small business’ existing marketing tools such as Facebook, it can automatically generate an app in less than one minute
Once the app is launched, the SMB has the ability to utilise a plethora of promotional tools to engage with existing customers and target new customers.
The SMB can now begin sending push notifications, running loyalty programs, offer in-app purchases, engage directly with customers, offer cashback incentives and run social media campaigns using high-resolution graphics through its own social channels.
For example, an enterprising cafe that launched its own app can let their customers know about deals or promotions, such as a buy-one-get-one-half-price, immediately and directly to their mobile home screen, encouraging them to come again.
From there, the customer can enter a loyalty program via the app — hopefully becoming a lifelong customer.
An app is a powerful tool that small business owners have never had in an easy-to-use and cost effective package before.
AppsVillage CEO Max Bluvband knows this better than most, as the idea for the company came about due to frustrations his wife was feeling in his native Israel.
“She ran a small children’s bookstore,” he recounted to Star Investing. “She started to gradually notice that her sales were slipping and wondering why.
“So she did some asking around and it turns out a big bookstore chain had created an app and was using that to do product promotions…and it was very effective.”
His wife began to look into app development to see what it would cost to get an app for her bookstore — only to be discouraged by the hefty price-tag, expertise and the amount of time it takes to get an app built from the ground-up.
“We learnt that for SMBs, having a fully functional app is almost an impossible mission. The excessive costs, expertise and time required mean it just isn’t feasible for small businesses,” said Bluvband.
The more he looked into it, the more he saw demand for an app solution tailored to small businesses was a virtually untapped market — and the demand was formed by one fundamental truth: websites are old news and apps are the way forward.
Death of the website
90 percent of a user’s internet time on a phone is spent within an app — whether that’s a social media app like Facebook, an online banking app, or an email app. Virtually no one visits a website from their phone these days.
“The more I looked into the information,” Bluvband said, “the more I realised that small businesses weren’t getting enough value from their websites and the SMB actually has a very low digital marketing presence.”
“In fact, the purchase conversion is 300 percent times higher within an app versus a mobile site” Bluvband said.
Most small businesses have a Facebook page, but these posts achieve less than 1% impressions and small businesses in particular find it hard to cut through the noise of cashed-up competitors, even with paid-for campaigns.
“If a customer doesn’t know who you are, there’s little reason for them to go to your website,” Bluvband said. “And for existing customers, they’re not going to check your social media or website on the off chance you’re running an offer.”
Instead, he says, apps change the game for small businesses – driving loyalty, engagement and customer reach.
“The ability to offer push notifications is huge,” Bluvband said. “It gives a small business a direct channel to their customers’ attention that they’ve never had before.”
The model is already delivering
Apps Village operates on a recurring SaaS model and has already demonstrated revenue traction with $750,000 in revenue for 2018.
It has begun 2019 with a strong start, securing ~$310,000 in annual contract value (ACV) revenue and annualised revenues of more than $1,200,000.
Aside from a recurring subscription model, it earns a 5-8 percent commission on sales made within AppsVillage-created apps and 20-40 percent commission on ads created within their apps.
It’s also created a diverse geographic spread of businesses using its services (from the US, Australia, Canada and the Philippines), demonstrating that the demand from small businesses for an app which doesn’t cost an arm and a leg is great no matter where you go in the world.
It begs the question — why not head to another market where capital is more plentiful and investors more receptive to early-stage tech stocks?
“We chose Australia for a number of reasons. It’s really a good market for small business, housing more than 2,100,000 SMBs, providing the perfect economic climate for our growth,” Bluvband said.
But he’s also got his eyes on bigger fish.
“While Australia is a good market by itself, we’re also looking at the likes of China and India longer-term…that’s where our massive growth is going to come from and Australia provides a good base to expand from,” Bluvband said.
A small business nation
While Australia may be portrayed as the land of banks and iron ore, it offers a rich and diverse small business market.
According to stats from the Small Business and Family Enterprise Ombudsman, there are roughly 2.1 million small businesses in Australia.
That means that roughly 97 percent of all businesses in Australia are businesses which employ fewer than 20 employees.
This means Australia is a market of significant growth for AppsVillage, given it has already proven the tech and the model works by securing thousands of small businesses in the USA to date.
“We know there are good links between Australia and Asia, and we’re hoping that by repeating the USA model in Australia we will unlock huge growth in these markets too.”
Small businesses have been crying out for the ability to create apps, but without the complexity and the price-tag.
If AppsVillage can deliver on its core promise, it will not only do well for itself but create a lot more business across the entire small business ecosystem.
This content is produced by Star Investing in commercial partnership with Apps Village. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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