The year that just passed, 2020, was exceptional. Many of us were locked in our respective countries, cities or for some parts of the year, homes. 

Our predictions for 2020, it turned out, were either accelerated (therefore extra accurate), or completely blocked (therefore not accurate at all). Overall, we did a pretty good job in 2020, especially for Southeast Asia. You can find all our previous predictions since 2018 here

2021 is challenging to predict. While the vaccines are becoming available, we do not know how soon they will be deployed, especially in the emerging markets we cover; we also have no idea how effective they will be at massive scale, especially in the emerging markets we cover. 

We have decided to limit our predictions this year to Southeast Asia & Chuhai (出海 – or Chinese companies venturing overseas). 

While most of the predictions were compiled in December 2020, we are also a bit late this year to issue these predictions – we went for a nice (stay at home) holiday for the end of December and early January. 

During this time, the dynamics for Southeast Asia number 2 (Grab and Gojek finally merge) has changed with a potential Gojek<>Tokopedia tie-up. We thought about it, and decided to still go ahead with our original predictions. 

We welcome your feedback, especially when you have drastically different perspectives compared to ours. Enjoy 2021!

Southeast Asia

  1. SEA Group market cap reaches $200b; one more unicorn goes public;
  2. Grab and Gojek finally merge;
  3. The region’s tech majors expand on financial services, squeezing smaller players;
  4. Big Chinese companies snap up more tech assets in Southeast Asia;Chinese enterprise/SaaS companies enter in droves;
  5. Complete boom of ecommerce ecosystem: cross border, supply chain and delivery infrastructure, content/live-streaming/influencer agencies and other service providers; 
  6. Edtech/healthtech hype wanes, stronger players survive;
  7. More innovative business models emerge, built on top of accelerated digitisation and infrastructure in 2020; 
  8. Investors return to Vietnam and Malaysia; Thai ecosystem becomes more open; 
  9. Investors explore more creative ways to exit; haste to deploy capital raised to make room for larger funds;
  10. Competition for talent in the region becomes more aggressive; more Chinese tech veterans join the region’s tech majors;

Chuhai (Chinese tech companies venture overseas)

  1. Southeast Asia remains the hottest region for Chinese companies; 
  2. Ecommerce ecosystem players and B2B/enterprise companies are particularly bullish about Southeast Asia; 
  3. TikTok resumes its growth path; ByteDance further expands its overseas footprint; 
  4. Alibaba still struggles with its foreign subsidiaries and joint ventures;
  5. India allows Chinese investors back, though Chinese tech companies still cool; 
  6. Latin America becomes popular for lending, games and cross border ecommerce;
  7. Cross border, as opposed to direct overseas, deals remain the focus of China based VCs; Chinese PE & M&A activities in local foreign companies keep growing; 
  8. Chuhai becomes a mainstream career choice for experienced tech talent, many of whom with experience in one of the tech majors; Shopee and SeaMoney attract more experienced talent from China; 
  9. Singapore further strengthens its role as the hub for Chinese companies’ global operations; 
  10. Hong Kong starts to become a viable listing destination for tech companies in emerging markets, particularly those of Southeast Asia.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.

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