KE is the biggest Fin-tech/Any-Tech/Data-Tech/Social Network in the Country if they wanted to be….

Love it or hate it, cant live without KE. With all the market making news around KE, there is a lot to be said and done around the assets KE has. Besides the power or energy it distributes, it has data that it doesn’t distribute or use insofar as I can tell.

Let’s look at the bill. Beyond the usual business of having consumer demographic details, their CNIC, it also has past payment history and consumption info.

From KEs Bill Explainer

If we just take the basics. KE has the ability to be single largest fin-tech play in the country. If you asked me, I would have had them apply for a digital banking license bar none. Why?

Let’s deep dive into the theory looking at their standard bill.

What do they know about the connection owner?

  1. Male/Female
  2. Actual Bill Amount
  3. Payment frequency
  4. Usage consumption, up or down co-related to weather
  5. Address
  6. At least 10+ years of all this data is digitally available

What does one need to base lending decisions on typically at a fin-tech/bank/credit co? Most if not all of the above. But wait, it doesn’t end here. This is what is non extrapolated and non implied data.

Now let’s look at what else they could know or use?

  1. They can group people into affluence/segments based on data from a neighborhood
  2. They could club neighborhoods by pay-back rates + timeliness
  3. They also have one super power no one else does or can, they know the channel where the payment was made
    • Online
    • Bank Branch
    • Which Bank
    • Cash
    • Online Transfer
    • Bill Aggregator
  4. Based on this they can build heat maps on
    • Cash based payment locations + banks + centers
    • Time of day month etc when those payments are made
    • Who are the folks that have delinquent payments
    • Who are those that pay for payment plans
    • Can you offer pre paid subscriptions and collect advance cash from Tier one customers?

What else could they monetize for them to be a 10x Valuation play?

  1. Data, data and more (small data)
  2. Make your constituents download your app or consent to giving them their home/commercial connection pin location(more on this later, if you are a KE board member email me and ask nicely)
  3. Push notifications and discounts via app (more on this)
  4. Incentivize users to go beyond the abysmal 500k Downloads today of the app
  5. As an entity KE Serves 2.5M Adult customers(whose demographic/psychographic info is in the system some where but not being used)
  6. KE’s distribution network spans across 6,500 km2 based on their data, imagine the maps applicability that could be unleashed if they actually stored and curated this data

How can a small change in their data/digital strategy make them help consumers pay their bills ?

  1. Once you drive up app installs make it the most useful app, by having video/news/games/content in it. At 1M daily active users and looking at our consumption habits you serve people with ads, if they have the ability to use part of the ad-revenue you make to pay off their bill, you would be the first electric utility company in the world to monetize a completely different channel..But wait theres more..
  2. For the above example we are assuming you turn on some one else’s content and likely googles ad-network. But if it were up to me, you would build your own/reuse some one else’s tech to run your own ad-network. Why, because you have the single most populated cities 1st party user data. Meaning what you could charge for targeted ads, google would pay you to connect to your network. No one in Pakistan(sans the dumb telcos) have this data, who also by the way have no ad-network of their own.(Tried and failed twice, because their chief digital officers are ex marketing mavens, and bad at that too-Historically speaking)
  3. But wait there is more, if you take NextDoors example from the US, the only company that has the slightest chance to build a local communal social network in Pakistan is KE leading to local commerce, payments and monetization of every transaction on that network, dont forget UGC news, health and other use cases.
  4. What KE has is the ability to build a trust network. Granted they have shitty PR, but this is what it takes. Most of this costs under 1M$ to roll out a real working product.

As the corporate changes, ownership scuffles and PE battles enrage, the operating company should be focusing on building value.

If I was a shareholder, which I am not, I would ask, Is this company, with the above data plays, a better monetized asset? When/if the eventual sales happens to the Chinese, does the valuation go up?

Should the government that is 23% strategic share holder and on the board, demand that KE innovate because these seemingly small data plays can increase revenue + reduce the burden of power costs on the end consumer by really doing some thing out of the box.

It is the consumers data, with the state involved perhaps the state can nudge KE into enhancing their outcomes. Who doesn’t want, or need better outcomes. The people of Karachi could most certainly use them and a lower bill potentially. Or have avenues to make additional money by engaging in local commerce.

I wanted to go look up the BOD of KE, sadly their profiles aren’t hyper linked any more but still show up on a google search. Interestingly enough some of the folks whose profiles aren’t on the Bod Page. Perhaps new directors to come or old ones whose links still on Google. But I digress. I wanted to take a look to understand who in this lot would have the courage to ask the Management to do some thing bold. Don’t know the answer yet.

The fact of the matter is, a lot can be done, there is immense potential both to the current share holders, the market at large and any future buyer from a resultant asset sale. The question is, will they recognize what they have? Like most Pakistani asset flips, is this just vanilla for a quick upside? Or with the change of play in the BOD they will actually go ahead and bring some critical thinking besides rubber stamping of votes for an eventual sale. I mean just basing this on historical items and nothing besides that.

I have no horse in this race, besides being a consumer, who would like continuous un interrupted power supply and if by some miracle, these guys are able to do a further turn around on the back of a real digital transformation that allows me and other end user some relief from sky high rates, whilst adding to economic progress of the constituents they serve, I’d be all for it.

**Note to BOD, if you are thinking of or are already engaged with McKinsey or Bain, on the insistence of your management team, you are better off re reading what I shared for free and save your self the same BS they took to every bank, every navigation co, every telco, every food science company in the country. Its one standard deck with whitewashed commentary that sounds better coming from some one whose not of local disposition. Sharing this so you can conserve your FX at such a critical time in the country’s history.

4 thoughts on “KE is the biggest Fin-tech/Any-Tech/Data-Tech/Social Network in the Country if they wanted to be….”

  1. This is a new avenue path of thinking to go down on and explore.

    The article shows that KE is a latent, undiscovered goldmine of user data. The government had the right idea but the wrong implementation of that data when they tried to charge a flat trader tax on everyone’s bill.

    Using KE as a conduit to multiple funnels of revenue would be a win win situation for everyone.

  2. Absolutely amazing and very much doable too.

    Very well written , with articulate strategy and facts to consider. A little off the topic in the near end, commenting about the BOD and all but sums it up beautifully in the end. Couldn’t agree more in your views !!

    Great work !!

  3. 90 percent of the data that KE holds is at the household level. Not at the individual level. So they don’t know which individual is paying the bill or is the bill split between family members or not . So services would be at the household level ?

  4. Data is the New Black Gold.

    KE should adopt this immediately if not at least do some work on these proposals but knowing Pakistani corporate culture they will make a laugh over it over a cup of tea.

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