Frosmo: Unique solution brought growth in Southeast Asia
Three years ago, Frosmo made a decision that can be considered surprising for a Finnish software company. Instead of the traditional strong market areas, Frosmo decided to seek global growth in Southeast Asia.
According to CEO Mikael Gummerus, SE Asia is a more cost-effective alternative for growth than for instance the United States, which is the biggest market for the software industry.
"There is a huge demand for top-level digital know-how in Southeast Asia, yet there is little competition. In other words, growth is much easier and less expensive to achieve," says Gummerus.
Frosmo's primary product is a piece of software which can be used by for instance online stores to tailor their websites for different user groups and marketing campaigns. In the last four years, the company has grown at an annual rate of approximately 150 per cent. In 2016, the company's turnover reached EUR 6 million.
Frosmo's decision to head for Southeast Asia was made easier by the fact that the company could enter the market with the support of a customer recommendation.
"The first customer accounts grew fast, which encouraged us to invest more heavily in the region," explains Gummerus.
To SE Asia with the support of the BEAM programme
Frosmo was accepted in the BEAM programme of Tekes in 2016.
"Being involved in the programme helped us to find a local distribution partner. Without one, direct sales are practically impossible. We have also received vital help for mapping the opportunities of the market area," continues Gummerus.
At the moment, the company has employees in three Southeast Asian countries: South Korea, the Philippines and Singapore. In addition, the company has customers in Indonesia, Thailand and Vietnam. In 2016, a total of 10% of Frosmo's turnover came from Southeast Asia.
Top-level digital know-how is in demand on the Asian markets
As a developing market, Southeast Asia is one of the most promising in the world. Approximately 600 million people live in the area. Online shopping is showing continuous growth, and digital services are popular, especially among young people.
"More and more people are making mobile purchases. In Southeast Asia, for example, it is common to order services via the WeChat app. Equally, payments are made using mobile apps," explains Gummerus.
The challenges facing service providers are largely the same as in the rest of the world. According to Gummerus, Finnish companies would find it easy to expand their operations to the Southeast Asian markets.
"Typically, Finnish companies have access to very limited resources. Perhaps slightly surprisingly, focusing them on an area with little competition may yield the best results. Finland boasts high-quality digital know-how, which would surely be in high demand in Southeast Asian countries."
For further information, please contact
CEO, Frosmo Oy
Mobile: +358 50 323 4643
mikael.gummerus (at) frosmo.com