Several weeks ago, I was invited to moderate a panel discussion at the Mobile World Congress (MWC) in Shanghai this year. It was the only panel that covered exclusively on Southeast Asia during the MWC. Also, Momentum Works was proudly the strategic partner to co-host the 4YFN startups events during the three-day conference.
Many people, especially from Northeast Asia, are curious about the Southeast Asian market after seeing a number of new-born Internet unicorns over the past few years. Some have confided to us that they are worried by not knowing the region well, they might risk missing a big growth opportunity in technology.
The infrastructure development has played a significant part of the game. If you came in 2013, there was nothing much to invest in that could actually grow fast, precisely because of the lack of infrastructure (mobile penetration, payment, logistics, etc.) back then. Think about the first ride-hailing apps entering the country in 2012 – most drivers did not own – or know how to use – a smartphone. Even if they did, the reception was at best patchy outside a few core business areas. Now Go-jek has transformed entirely the ride-hailing scene in Indonesia and is becoming more and more entrenched in the daily lives of urban Indonesians. More opportunities are actually just emerging.
Sometimes it’s fate.
On the panel, Albert shared the behind story when BPI was deciding an Asian market to enter, they thought China was considered too late to join. Southeast Asia (than India) hence became a destination after Europe and the US.
Not just Western groups, the Chinese investors are optimistic about the regional market as well. Wang Han pointed out the common notion which illustrates “Southeast Asia is China in 10 years ago.” Investors and businessmen alike are worried about missing out another Chinese dream again – now eagerly refer to Southeast Asia as a great mine.
Geography (same time zone!) and cultural similarities (Asian) make it relatively easy destination to tackle first. On the other hand, local conglomerates and investors like Dusit are now looking for successful models in China and help adapt them in the region.
With more players participating to the game, the market is maturing faster and faster. According to Genping, this space has never been so crowded, especially when new technology such as AI and data analytics are newly introduced to these emerging markets, spurring interesting applications that were not practical barely one or two years ago.
Having said that, talent constraints and information asymmetry may be hindering the speed of development, suggested by many of the panelists. In most parts of Southeast Asian, reliable, capable and experienced candidate can be hard to find. The lack of relevant educational resources and internet exits has been an obstacle for both entrepreneurs and investors.
The other thing is the culture. Agreed by some panelists, as Southeast Asia is divided by geography and languages, regulations and customer understandings could be challenging when navigating the market(s). Furthermore, finding a trustworthy local partner can be difficult without any on-the-ground networks.
Learn more about how Momentum Works can help businesses accelerate in the emerging markets empowered by our insights and local network.
5G and the Future
Aside from the panel, I did take some time checking out the exhibition. As the most prominent industry conference in the mobile industry, participants can take a glimpse of the future.
5G is no doubt the main topic of this year. Partially because of China is the most aggressive country to adopt 5G into real practice; as host, China Mobile and China Unicom both demonstrate 5G solutions in the main pavilion. 5G, the new industry standard provides not only faster speed but, more importantly, larger capacity to transmit more data and information at the same time.
This enables a lot of opportunities. IoT, which people have been talking for years, could finally become smart.
However, 5G can be extremely costly to build. How to give telcos the right incentive to invest in such infrastructure was discussed over and over at the conference.
Maybe it is time for telcos, many of which invested in Rocket Internet years ago, to re-look at aggressive investment in the right companies? The understanding about tech, and the talent in investment, ultimately, have both grown tremendously over the past couple of years.
This is why I am deeply optimistic about a connected and smart future for Southeast Asia.
Thanks for reading The Low Down, insight and inside knowledge from the team at Momentum Works. If you’d like to get in touch with us about any issues discussed on our blog, please drop us an email at email@example.com and let us know how we can help.