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Six months into the pandemic, some companies are starting to feel the heat as the sales channels and approaches they have been relying on for years are burning up faster than ever. In fact, customers have migrated to digital in all areas, be it for IT-related consumption, cars, doctors’ visits, food, and more. This trend is not new, but it has become more evident. Ever since 2015, our investment strategy has focused on companies related to the digital age transformation. And since 2017, this investment strategy has been made available to the greater public via an active managed investment certificate [download fact sheet ]. This investment opportunity has proved to be a great performance provider—on average +18.5 p.a. Let’s dive a little deeper into the matter. COVID-19 has accelerated a trend that was clearly in place before; successful ecosystems interconnect sets of services through which users can access a variety of cross-sectoral needs in one integrated experience. Dominant players use hyperscale platforms to contest the market share of incumbent players; they disintermediate, and often substitute for, the offerings of traditional competitors by controlling customer interfaces and control points such as search, advertising, and messaging. Today, some of the biggest companies by market capitalization are related to digital B2C and B2B business models. Some companies act in different areas: Amazon, for example, ties together e-commerce, cloud computing, logistics, and consumer electronics, while China’s Tencent provides services including social media, gaming, finance, and cloud computing.
When looking at the business models and eco-systems the next 100 companies (by market share) are trying to build, we note that most operate with systems which are between the old and the new. Yet, we truly note they are moving ahead fast towards Ecosystem 2.0. Ecosystem 2.0 How does Ecosystem 2.0 work? For starters, it creates value along two dimensions. It allows participants to consolidate ranges of users, which are then segmented into different categories of the touchpoint concept (also called a sales funnel). Fast-moving ecosystem creators don’t try to do this by building everything they need in-house. Instead, ecosystem organizers assemble and partner extensively with other participants who may be either within their traditional industry boundaries or outside them. These moves can unleash distributed innovation and create new efficiencies along value chains to improve customer experiences while opening new avenues of value creation for a wide range of participants.
Traditional players often change the way they convey their clients. Instead of limiting themselves to services within their historical business model concept, they may go beyond in an effort to serve customers from A to Z, throughout the whole undertaking. For instance, let’s look at the United Kingdom’s ZPG: they are trying to create a start-to-end ecosystem that may cover all the processes related to “moving”: the ecosystem they are trying to build includes property search, property comparisons, mortgage shopping, household moving, switching phone, cable, and utilities, and accessing home-improvement professionals to get tender offers for improvements.
It can be expected that more than 15 industry sub-sectors, mostly related to mobility, travel, hospitality, health, housing, and staples, may evolve into one single ecosystem concept, a kind of virtuous network of networks that includes AI to focus on customer service with cross- and up-selling and service opportunities. That this will happen is a sure thing; the value creation is immensely huge, and the scale of the integrated network could reach USD 60 trillion as soon as 2025.
Recent research concluded that both consumers and corporations capture the appeal. About 70% of consumers confirm that they are tempted to make use of the benefits provided by Ecosystem 2.0, while about 40% of S&P 500 companies are likely to join or form an ecosystem in the next 18 months.
5G The rollout of 5G communication systems will accelerate the move towards Ecosystem 2.0. This in turn will increase the demand for hard- and software to build data centers, maintain communication exchanges, and provide application programming interfaces that reduce latency. Advanced systems go one step further: they are providing tools to manage vast databases and using AI to improve their own concepts while understanding the flows that occur elsewhere, thereby channeling more consumers to their own ecosystem.
Welcome to tomorrow—but stay well anchored in the present as the future can become a well-orchestrated trap for the uninformed.
Knowledge is power.
