After Amazon wipes out major local retailers, the banking sector will be next, CEO of the original disrupter SEEK Andrew Bassat warns.
Mr Bassat, who disrupted the media landscape 20 years ago after launching the online job site, warned that he worries about Amazon ‘‘much more than most people do’’ and after existing retailers face having $10 billion wiped from their sales, he expects banking to be next.
‘‘They are bloody smart, they are bloody aggressive, they have a lot of technology, and they use data really well,’’ Mr Bassat toldThe Australian Financial Review’s BOSS Magazinein an interview published today. ‘‘But the most simple thing is they don’t give a shit about whether they make a profit in Australia for five years, whereas Gerry Harvey cares a lot about the profit he makes next quarter.
‘‘That’s an unfair battle; who do you think is going to win that?’’
The CEO who founded SEEK, now worth $6.8 billion, with his brother, venture capitalist Paul Bassat and friend Matt Rockman of the Rockmans women’s fashion family, warned that disruption of corporate Australia is ‘‘only 10 per cent done, not 80 per cent done’’.
Mr Bassat speaks in-depth for the first time about how he let his guard down as CEO in 2011 to competitors LinkedIn and Indeed and had to ‘‘change everything about the business’’ to survive.
‘‘I couldn’t share this with too many people but if we didn’t move really fast, we would be stuffed,’’ Mr Bassat reveals.
‘‘Australians are much more vulnerable to disruption than anyone realises. I look around industry by industry and I say, ‘I can’t see Australian companies winning that industry’.’’
Mr Bassat and his brother Paul discuss the call from magnate James Packer in March 2003, who as former chairman turbo-charged the company towards a $170 million ASX listing and backed the company’s push into China, which is now paying dividends.
Despite a 25 per cent increase in share price this year, SEEK shares fell by more than $1 from a high of $19.67 on Wednesday, after a forecast 13 per cent increase in pre-tax earnings announced at Wednesday’s AGM fell short of investors’ expectations. SEEK is diversifying into education and has invested in a number of earlystage firms such as Melbourne employment marketplace Sidekicker, job application tracking and client relationship startup JobAdder, worldwide job search aggregator Jora, Brazil’s Catho Education and Malaysia’s JobStreet Education.
Mr Bassat, who has copped criticism for describing CEOs as ‘‘gutless’’ for bowing to shareholder criticism over pushing into overseas markets, warned the banking sector is set to be disrupted next by players such as Facebook who have announced it will start offering payments via its Messenger service next year.
Amazon has quietly pushed into financial services, offering credit to merchants selling on its platform. Recent reports from the World Economic Forum and McKinsey warn that platform companies like, Facebook, Amazon, Alibaba and Google present a greater threat to the big banks than fintech start-ups.
‘‘I have spoken to some of the bank CEOs: they get disruption and [the need to move] fast, but they say it is really hard to focus on this stuff,’’ Mr Bassat said. ‘‘They [CEOs] need to go hard. I think they are missing the point; you need a strategy first on how you will survive and thrive, not just [be] innovative for the sake of it.’’
