The strategy to utilize a side business line as a company’s “knight in shining armor” in attaining growth has been widely adopted by various companies. This tactical maneuver involves harnessing the potential of an auxiliary or adjacent business facet to propel the organization towards growth – a drive to provide an exhaustive ecosystem.

Numerous successful tech companies have adeptly employed this strategy.

One of the many success stories includes Gopay, the digital payment platform of GoTo. Gopay has played a pivotal role in GoTo’s success by providing a secure and efficient payment solution, influencing its users to choose GoTo’s services over competitors. As it enhanced user convenience through financial inclusion and access to digital financial services, Gopay managed to drive up its user acquisition and retention, becoming the most used e-wallet apps by consumers in Indonesia (Statista, 2022).

We’ve also written about this “ecosystem building” approach on Insignia Business Review.

7Es of The Ecosystem Approach to Sustainable, Profitable Tech Companies in Southeast Asia

And at the heart of it is really being able to create a win-win situation where the company can continue to find new ways to beef up its monetization while also continuing to innovate and provide products and services their customers love.

As Carro CFO Ernest Chew shares on our podcast, “The idea is to cross-sell financing where we get commissions or monthly interest, cross-sell insurance and target yearly renewals, to build products and services that our customers love and capture returning customers including after sales services every 6 months and insurance renewals every year. Essentially many of the things we do strengthens and reinforce customer lifetime value.”

Pinhome, the largest property transaction platform in Indonesia, has also taken this approach.

From a home-ownership app that offers ease in property brokerage and mortgage service, to house-related service providers such as home cleaning, repairs, beauty, health massage, or other essential services, Pinhome thrives in becoming a trusted All-In-One property solution for Indonesians.

We explore the role of Pinhome Home Services (PHS) as a key business adjacency to strengthen its core operations:

(1) Expanding into business adjacencies needs to align with the company’s mission and vision.

Pinhome believes that home-ownership is a long journey that requires a lot of stages and careful deliberation – not something done in split seconds.

One needs to scour the town to find their dream house, deal with mortgage, and handle numerous administrative tasks. Even after settling in, there’s the ongoing challenge of renovations and household chores, leaving little time for anything else.

Pinhome brings together all these different parts of the home ownership journey accessibly through an app, saving users valuable time and alleviating stress. And PHS is key in completing this journey. The company introduced home services from 2021 to 2022.

From a value proposition perspective, where Pinhome has long aimed to be the go-to platform for all things related to the home-ownership journey, not being able to incorporate home services would leave a significant competitive gap.

(2) Depending on the unit economics of the product or service, adjacencies are not just for retention but also acquisition into a customer journey or service ecosystem.

Property is a once in a lifetime kind of experience for the majority of people. The nature of property purchases has led Pinhome to formulate a strategy that can help them acquire and retain more customers through a more transaction-frequent business line.

This is where PHS comes in.

As its services are more affordable with a broader user base, from young adults to elders, housewives, landlords, PHS acts as a gateway to a wider target market to experience the whole Pinhome’s ecosystem, creating a funnel for users to explore Pinhome’s property marketplace services afterwards.

As Dara shares on our podcast, “While pursuing growth, it is essential to strike a balance between acquiring new customers and retaining existing ones. We do not want to underinvest. We want to continue to get fresh new customers, but at the same time, we want to make sure they are well retained…

We also cross-sell. And when we cross-sell, we acquire users with lower CAC products, such as home services, and then cross-sell them and upgrade them to high CLV products, such as brokerage or mortgage refinancing.”

(3) A low-cost, high-quality acquisition product can make for a great retention driver as well.

PHS is also a retention driver for the platform.

Users engaged with PHS are more likely to stay within the ecosystem, increasing overall user retention rates.

The low ticket size of Home Service transactions complements the higher ticket size conversions of Pinhome’s property marketplace and brokerage services. This synergy creates a well-balanced economic model for sustainable growth.

(4) The platform approach can create jobs while also improving customer experience.

Pinhome also ensures inclusivity and diversity in its partnerships with service providers, creating opportunities for all.

The company currently works with more than 10,000 service providers with various social backgrounds across 40 cities, with 60% of service providers are women, and hundreds of them are people with disabilities.

Because Pinhome takes care of the logistics of home services, more valuable time can be saved, allowing users to focus more on meaningful aspects of their lives.

(5) It is important to understand the role of adjacency businesses in the social and economic fabric of the company’s market.

As Eid-Al Fitr has recently concluded and the post-holiday season continues, PHS plays a vital role in helping Indonesian households both before and after the celebration. This is closely related with Indonesian tradition during Lebaran, when people are either preparing their home to welcome guests for open-house feasts or keeping them clean after returning from their hometown, especially with stay-at-home helpers not around.

Learn more about Pinhome’s approach to building an ecosystem business from our conversations with CEO Dayu Dara Permata and CTO Ahmed Aljunied: