Recent startup boom across Southeast Asia(2)

Recent startup boom across Southeast Asia

The number of internet users in key countries of Southeast Asia like Vietnam has been mounting the fastest on the planet. A whopping 480 million people is predicted to get access to internet in Southeast Asia by 2020. 

This could explain why global investment experts have been paying closer attention to this area where youngsters covering half of the entire population are climbing on the brand new era of the digital economy.

Recent startup boom across Southeast Asia(1)

Recent startup boom across Southeast Asia

Startup boom has been one of the hot issues in Southeast Asia these days. Startups in Southeast Asia were awarded with $10.9 billion in investment in 2018. This figure is over 30% higher than the total startup investment of $7.9 billion in 2017. 

10 unicorns, privately held startup companies valued at more than $1 billion, have been emerged so far including Go-Jek, an Indonesian application-based ride-hailing service provider.

Spread of mobility service and Indonesian cashless society(5)

Spread of mobility service and Indonesian cashless society

Of course, cashless society is still at its infant stage. A life without cash may not ring a meaningful bell to those staying in less-developed parts of Indonesia. 

However, hopes are higher than ever that a cashless society primarily enabled by unprecedentedly fast expansion of mobility services will surely advance the national dream of digital Indonesia into reality.

Spread of mobility service and Indonesian cashless society(4)

Spread of mobility service and Indonesian cashless society

In other words, mobility services in Indonesia became more and more prevalent with no concern for possession of cash or credit cards. It goes without saying that such spread of mobility services accelerated by actualization of e-payment on mobile gadgets has raised the expectation of a cashless society in Indonesia.

As a result, financial environments without coins and bills have been realizing inch by inch. For instance, it is commonly observed that IT-savvy youngsters enjoy full benefits of a cashless society with Go-Jek or Grab on a daily basis.

Spread of mobility service and Indonesian cashless society(3)

Spread of mobility service and Indonesian cashless society

In contrast, Grab announced official business partnership with OVO, an electronic payment platform backed by Lippo Group and have it transplanted to mobile application in December, 2016. In a country where less than 10% of the population holds credit cards, implementation of e-payment system on mobile devices served as a game changer for the leapfrog of the mobility market. 

As users can make payments within their balance in the mobile wallet, overall access to mobility services was considerably upgraded.

Spread of mobility service and Indonesian cashless society(2)

Spread of mobility service and Indonesian cashless society

As snowballing amount of investment continues to rush in, anticipation has been getting bigger that the local mobility market will fulfill its growth potentials in a maximum level. Huge success of two mobility startups in Indonesia can be partly attributed to the introduction of e-payment methods to their applications. 

For example, after purchasing a few electronic wallet-related startups, Go-Jek added Go-Pay, an e-payment function to its application in April, 2016.

Spread of mobility service and Indonesian cashless society(1)

Spread of mobility service and Indonesian cashless society

In tandem with the e-commerce, fintech and online travel areas, mobility service has been often acclaimed as the leading trailblazer of the Indonesian digital economy. It is due to the rapid development of the mobility industry mainly triggered by ever-intensifying rivalry between Go-Jek and Grab, two and only decacons in Southeast Asia. 

Beginning from the desperate idea of improving chronic traffic congestion in urban districts, both Go-Jek and Grab have risen to their fame as supper applications inevitable for daily lives of the Indonesian people, young generation in particular.

Global eyes on startup fever in Indonesia(4)

Global eyes on startup fever in Indonesia

In this regard, it is no wonder that Indonesia has been through hottest startup craze in Southeast Asia over the last decade. Starting from the e-commerce field followed by sectors like the co-working space, the mobility and the fintech services, young and ambitious startups have been playing crucial roles in taking initiatives to bring digital technology into designing customized solutions in a local context. 

As Bari Arijono  stressed throughout his book, 'Indonesia Digital Nation', digital transformation has been widely undergoing all over major industries in Indonesia.

Global eyes on startup fever in Indonesia(3)

Global eyes on startup fever in Indonesia

It seems that Indonesia has caught eyes of the global investment industry more actively than Singapore in the regional competition of startup waves. A growing number of venture capitals and startup incubators sense exceptional business opportunities of Indonesia especially in terms of the market size. 

In fact, as the world's biggest archipelago with 17,000 or so islands, Indonesia has little choices but to rely upon online or mobile platforms to have more people advantaged from the convenience and efficiency of the digital economy.

Global eyes on startup fever in Indonesia(2)

Global eyes on startup fever in Indonesia

These advantages of the two countries, namely Singapore in quality way and Indonesia in quantity way, have been exercising salient powers in generating most notable startups in the region. 

The fact that 8 out of 10 unicorns in Southeast Asia are headquartered either in Singapore or in Indonesia proves the significance of the two countries in the developments of the digital economy. 

Global eyes on startup fever in Indonesia(1)

Global eyes on startup fever in Indonesia

Among 11 countries in Southeast Asia, Singapore and Indonesia has been viewed as spearheading the advent of the digital economy across the region. It is little doubt that Singapore is the financial and technological hub of Southeast Asia with its delicately developed free-market economy. 

Blessed with the world’s 4th largest population of around 260 million people, Indonesia takes approximately 40% of the total GDP of the Southeast Asian economy.

Recent startup boom across Southeast Asia(4)

Recent startup boom across Southeast Asia

This could explain why global investment experts have been paying closer attention to this area where the youth covering roughly half of the whole population are climbing on the brand new era of the digital economy. 

In this sense, it may not be too much to say that a rosy outlook on the startup fad in Southeast Asia is likely to be maintained for the time being.

Recent startup boom across Southeast Asia(3)

Recent startup boom across Southeast Asia

Why startup markets in Southeast Asia have been much spotlighted? Hugh growth potential in the region would be singled out above all things. The number of internet users in key countries of Southeast Asia like Myanmar and the Philippines has been mounting the fastest on the planet. 

There is eye-catching prediction that a whopping 480 million people almost nearing the entire inhabitants  of the European Union will be fairly accessed to internet in Southeast Asia by 2020.

Recent startup boom across Southeast Asia(2)

Recent startup boom across Southeast Asia

According to Tech in Asia , startups in Southeast Asia were awarded with as much as $10.9 billion in investment in 2018. This figure is over 30% higher than the total startup investment of $7.9 billion in 2017. This is far startling because investment in Southeast Asian startups failed to reach even $1 billion in 2013.

Consequently, 10 unicorns  have been emerged in the region. VNG, an online game platform in Vietnam and Go-Jek, an Indonesian application-based ride-hailing service provider are renowned digital players.

Recent startup boom across Southeast Asia(1)

Recent startup boom across Southeast Asia

Startup boom deserves to be named as one of the hot issues in Southeast Asia these days. Startup markets across Southeast Asia have been rapidly gaining momentums. 

As a matter of fact, locally born leaders of the digital economy  such as Grab in Singapore which acquired the Southeast Asian business unit of Uber in early 2018 have been credited for redrawing the conventional industrial map in the region. 

Expansion of mobility services and Indonesian cashless society(7)

Expansion of mobility services and Indonesian cashless society

It goes without saying that spread of mobility services accelerated by transplantation of e-payment on mobile gadgets has raised the expectation of a cashless society in Indonesia.

As a result, financial environments without cash have been actualizing inch by inch. Though a cashless society is still at its infant stage, hopes are higher than ever that a cashless society will advance the national dream of digital Indonesia into reality.

Expansion of mobility services and Indonesian cashless society(6)

Expansion of mobility services and Indonesian cashless society

Huge success of two mobility startups in Indonesia can be partly attributed to the introduction of e-payment methods to their applications. Go-Jek and Grab added electronic payment function to their applications back in 2016. 

In a country where less than 10% of the population holds credit cards, implementation of e-payment system on mobile devices served as a game changer for the leapfrog of the mobility market.

Expansion of mobility services and Indonesian cashless society(5)

Expansion of mobility services and Indonesian cashless society

Mobility service is often acclaimed as the leading trailblazer of the Indonesian digital economy. 

It is due to the rapid development of the mobility industry mainly triggered by ever-intensifying competition between Go-Jek and Grab, two and only decacons, privately held startup companies valued at more than $10 billion, in Southeast Asia. Both Go-Jek and Grab have risen to their fame as supper applications inevitable for daily lives.

Expansion of mobility services and Indonesian cashless society(4)

Expansion of mobility services and Indonesian cashless society

As the world’s biggest archipelago with 17,000 or so islands, Indonesia has little choices but to rely upon online or mobile platforms to have more people advantaged from the convenience and efficiency of the digital economy. 

Beginning from the e-commerce field followed by sectors like the mobility  and the fintech  services, young startups have been playing crucial roles in taking initiatives to bring digital technology nationwide.

Expansion of mobility services and Indonesian cashless society(3)

Expansion of mobility services and Indonesian cashless society

Singapore and Indonesia has been viewed as spearheading the advent of the digital economy across the region. Singapore is the financial and technological hub of Southeast Asia whereas Indonesia takes around 40% of the total GDP of the Southeast Asian economy. 

The fact that 8 out of 10 unicorns in Southeast Asia are headquartered either in Singapore or in Indonesia proves the significance of the two countries.

Expansion of mobility services and Indonesian cashless society(2)

Expansion of mobility services and Indonesian cashless society

The number of internet users in key countries of Southeast Asia like Vietnam has been mounting the fastest on the planet. A whopping 480 million people is predicted to get access to internet in Southeast Asia by 2020. 

This could explain why global investment experts have been paying closer attention to this area where youngsters covering half of the entire population are climbing on the brand new era of the digital economy.

Expansion of mobility services and Indonesian cashless society(1)

Expansion of mobility services and Indonesian cashless society

Startup boom has been one of the hot issues in Southeast Asia these days. Startups in Southeast Asia were awarded with $10.9 billion in investment in 2018. This figure is over 30% higher than the total startup investment of $7.9 billion in 2017. 

10 unicorns, privately held startup companies valued at more than $1 billion, have been emerged so far including Go-Jek, an Indonesian application-based ride-hailing service provider.

The establishment of the AEC and its implication for South Korea(12)

The establishment of the AEC and its implication for South Korea

Worries are prevailing that South Korea is way behind not only the running Japan but also the flying China. Other major players including Australia, America and the North Europe don’t sit idle as well. 

Prediction is that the ASEAN may play a crucial role of the last resort to save South Korea suffering from chronic weak growth. Needless to say, systematic and long-term approach is desperately needed in the unprecedented era of the AEC.

The establishment of the AEC and its implication for South Korea(11)

The establishment of the AEC and its implication for South Korea

South Korean business people navigating new growth chances have unanimously pointed out that Japanese business presence is dominant in the region. Moreover, China is speeding up recently by utilizing its extensive networks across the region. 

China has maintained robust retail and wholesale channels in most part of the ASEAN since around the 16~17th century when the Western forces first embarked on their rush to Southeast Asia. Unlike competitors heading forward, South Korea is often regarded encountered with shabby circumstance.

The establishment of the AEC and its implication for South Korea(10)

The establishment of the AEC and its implication for South Korea

In doing so, physical barriers will be torn down and regional exchanges and trades will be fairly accelerated. This will also gear up the possibility of the realization of the AEC overcoming the concern that the AEC blueprint 2025 may remain a mere declaratory gesture. 

As a matter of fact, a global war without guns has been underway to attract the ASEAN actively stretching itself to the world. For instance, Japan has been striving to enhance its clout on the AEC by devoting itself to investment on the infrastructure and key industries.

The establishment of the AEC and its implication for South Korea(9)

The establishment of the AEC and its implication for South Korea

“People in Vietnam will start to learn the Thai language to drive taxies in Bangkok. There will be Laotians who will pick up Javanese text books to become cab drivers in Jakarta.” Actually, Singapore has been importing housekeepers from its neighbors, Indonesia and the Philippines in particular. 

However, it will be highly likely that more human resources in various fields of the region will cross the borders of the ASEAN members with no limitation. 

The establishment of the AEC and its implication for South Korea(8)

The establishment of the AEC and its implication for South Korea

The economic clout will be further strengthened if the ASEAN succeeds in actualizing the AEC. Consequently, the influence of the AEC on the regional security issues will be also growing bigger. 

Against this background, hopes are high that the beginning of the AEC will serve an opportunity to create a new landscape for the 21st century. A local expert in Indonesia pictures potential changes in the region that the AEC may bring in the upcoming days.

The establishment of the AEC and its implication for South Korea(7)

The establishment of the AEC and its implication for South Korea

Along with Africa and South America, the ASEAN has been called as the symbol of underdeveloped areas. Thus, major powers like America, the EU and China would remain invincible if the ASEAN members try to compete with them individually. 

However, situation would be different if joint efforts of the 10 countries to cope with superpowers is designed and carried out. As the old saying goes, “United we stand, divided we fall”, the countries will have their confidence built up step by step. 

The establishment of the AEC and its implication for South Korea(6)

The establishment of the AEC and its implication for South Korea

There exists considerable economic gap in the region as well. For example, Singapore is acclaimed to be in the rich Northern Hemisphere while Cambodia only records per capita GDP of about 1,000 USD. 

In this sense, it is no wonder that a tough itinerary is anticipated on the way to the substantial integration of the AEC. In spite of the skepticism raised, the importance of the birth of a sizable single economic community shouldn’t be underestimated. 

The establishment of the AEC and its implication for South Korea(5)

The establishment of the AEC and its implication for South Korea

This could explain why negative voices concerning the future of the AEC started to be echoed. The question is whether the AEC can evolve itself something beyond a regional agreement body. 

Doubts are cast upon the significant disparity of the social and cultural environment among the member countries. In addition, neither a single currency nor a central decision-making tower as those in the EU can’t be found. 

The establishment of the AEC and its implication for South Korea(4)

The establishment of the AEC and its implication for South Korea

In fact, meaningful progress was already achieved since more than 70% of the intra-regional trade has been conducted free from any types of tariff. What will be the ASEAN like in the time of the AEC? 

It may be too early to forecast the AEC in 10~20 years when the AEC just pulled up its anchor. Even short-term outlook is not an easy thing to challenge as emerging markets with high volatility consist of most parts of the region. 

The establishment of the AEC and its implication for South Korea(3)

The establishment of the AEC and its implication for South Korea

According to the AEC blueprint 2025, part of the ASEAN 2025, the AEC rests on four pillars; a single market and production base; a competitive economic region; equitable economic development; and integration with the global economy. 

The AEC has been expected to draw huge attention from the international society ever since it came into the world. It isn’t too much to say that agendas of the AEC blueprint 2025 such as elimination of tariffs, facilitation of skilled labor mobility, liberalization of investment and promotion of connectivity have been greatly valued to the global community.

The establishment of the AEC and its implication for South Korea(2)

The establishment of the AEC and its implication for South Korea

10 ASEAN members are faced with their own weighty political or diplomatic issues as mentioned. However, all countries may share their uniformed look at the 'AEC(ASEAN Economic Community)'. 

It is because the AEC came to the 2nd year of its ambitious inauguration 47 years after the establishment of the ASEAN in 1968. Along with the ASEAN Political-Security Community and the ASEAN Socio-Cultural Community, the concept of the AEC was born from the ASEAN 2025 adopted by the leaders of the ASEAN. 

The establishment of the AEC and its implication for South Korea(1)

The establishment of the AEC and its implication for South Korea

The ASEAN(Association of Southeast Asian Nations), the 7th largest economy in the world, seems quite noisy in the wake of the new year, 2017. Assassination at the airport of the capital city of Malaysia triggered huge fury from all over the world as the North Korean regime is suspected of the mastermind of the incident.

While Myanmar is under international criticism for the massacre of its minority group, Indonesia sees social conflict with controversy of the majority religious party’s alleged attempt to exercise influence on the political sector.

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(9)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

Local startup founders have made unanimous voices that success stories of mainland Chinese startups have inspired them a lot. It is a shame that Korean startups are rarely mentioned for role models of Southeast Asian young entrepreneurs. 

Beginning with promising industries including fintech, education and mobile games, now is the right time for Korean startups to hit the digital road hard in Southeast Asia.

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(8)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

With the exception of Singapore, capital markets and legal and institutional systems for startups in the region aren’t well devised and developed as well. 

However, venture capitals, symbols of adventurous money would remain indifferent unless they feel confident of more gains than losses by stepping into the digital frenzy in Southeast Asia. This also holds true to Korean startups and venture capitals gearing up to carve out the Southeast Asian market.

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(7)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

This could explain why global investment experts have been paying close attention to this area where youngsters covering around half of the overall population are jumping on the brand new era of digital economy. 

There are yet pending issues to tackle in startup fever in Southeast Asia. Poor IT infrastructures in non-urban areas, shortage of high-skilled work forces and widespread financial illiteracy have chronically taken roots in most parts of Southeast Asia. 

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(6)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

The number of internet users in key countries of Southeast Asia like Vietnam and the Philippines has been increasing the fastest in the world. According to an article from the Wall Street Journal, whopping 120,000 online users are newly reported in the region on a daily basis. 

There is further prediction that 480 million people almost nearing the entire population of the EU (European Union) will be accessed to internet in Southeast Asia by 2020.

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(5)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

This is no exception to Korean investment firms. As centered on Indonesia and Vietnam, two countries in the region respectively representing the maritime and the continental Southeast Asia, news of Korean venture capitals eagerly exploring lucrative investment opportunities are heard now and then. 

Why startup markets in Southeast Asia are much spotlighted? High growth potential in the region would be singled out above all things. 

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(4)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

For example, attempts to introduce mobile technology to region-specific circumstances have been drawing huge attention. To name a few, startups aiming for improving the productivity of aquaculture industries or producing eco-friendly shopping bags to provide customized solutions for Southeast Asia where primary industries still considerably counts are loomed large.

In addition, indigenous family conglomerates have joined the startup wave by setting up venture capitals and navigating business chances. 

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(3)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

Lazada, an e-commerce platform in Singapore and Gojek, an Indonesian app-based ride-hailing service provider are presentable cases. It is mainly young Southeast Asians equipped with experiences of studying in Western countries who initiated startup craze in the region. 

As more and more young generations across the region rush to kick off their own companies, business models of startups are getting shaped up in a various way. 

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(2)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

According to Tech in Asia, a Singapore-based online technology media, startups in Southeast Asia received as much as $7.9 billion in investment in 2017. This figure is more than tripled than the total startup investment of $2.5 billion in 2016.

This is far alarming because investment in Southeast Asian startups failed to reach even $1 billion in 2013. Consequently, unicorn startups, privately held startup companies valued at over $1 billion has been emerging one by one. 

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia(1)

High Time for Korean Startups to Ride on Digital Fever in Southeast Asia

Startup boom can be named as one of the hot issues in Southeast Asia this year. This may not sound familiar to most Koreans except for those involved in the IT industry or venture capital sectors. However, startup markets across Southeast Asia have been rapidly gaining momentums. 

In fact, locally born leaders of digital economy such as Grab in Malaysia which recently acquired the Southeast Asian business unit of Uber have been acclaimed for changing the conventional industrial map in the region.

Startup fever in Southeast Asia and its implication for India(15)

Startup fever in Southeast Asia and its implication for India to improve indispensable public services 

Startups armed with progressive social awareness can play significant roles in dissolving the messy fundamental public services especially those in education and health for the future of their country. 

This is none other than a right time for startups in India should open their eyes to Southeast Asia and try to learn the best lessons from their neighbors.

Startup fever in Southeast Asia and its implication for India(14)

Startup fever in Southeast Asia and its implication for India to improve indispensable public services 

All 10 members in ASEAN (Association of Southeast Asian Nations) received higher scores than India in terms of women’s social status.

Overall assessments on criteria encompassing maternal mortality ratio, share of seats in parliament and labor force participation ratio of India turned out alarmingly low. This result clearly demonstrates the homework lying in the bottom of the Indian society.

Startup fever in Southeast Asia and its implication for India(13)

Startup fever in Southeast Asia and its implication for India to improve indispensable public services 

For instance, Halodoc, an Indonesian health tech startup, has been providing tele-consultations with doctors, pharmacy delivery, and at-home lab services through its mobile application with reasonable price options to remedy the underprivileged public access to the medical service. 

Truly, more and more startups in Southeast Asia are joining to unravel rampant shortages and inefficiencies of basic public services including primary education and health on the spot. According to this year's release of UNDP (United Nations Development Plan) on GII (Gender inequality Index), India was ranked 127th among the 189 surveyed nations in the world.

Startup fever in Southeast Asia and its implication for India(12)

Startup fever in Southeast Asia and its implication for India to improve indispensable public services 

In spite of the snowballing increase in the number of Indian startups, not many young CEOs seem fascinated in jumping into the public sector. Most local startups have been allegedly involved in the apparently growing and thus lucrative business fields such as e-commerce, accommodation and transportation industries. 

Of course, this is no exception to their peers in Southeast Asia. However, continuous efforts to tackle long distorted public services have been reported from Southeast Asia.

Startup fever in Southeast Asia and its implication for India(11)

Startup fever in Southeast Asia and its implication for India to improve indispensable public services 

Presence of as many as 22,000 startups in operation across the country has been partly attributed the government program backed by the latest strong economic growth. 

In fact, Bengaluru in the Southern part of India, often termed as the Indian Silicon Valley, has even claimed the second place in the list of best locations for launching tech startups globally. Now the thing is not in quantity but in quality in India.

Startup fever in Southeast Asia and its implication for India(10)

Startup fever in Southeast Asia and its implication for India to improve indispensable public services 

Additionally, as widely known, some CEOs of top-tier multinational technology companies like Google, Microsoft and Nokia have been supplied from the vast pool of Indian IT talents. 

Under this circumstance, the Indian government has also come up with a new initiative, 'Startup India', to foster startup ecosystems in the country since 2015. The purpose of Startup India is to generate startup-friendly environments for young entrepreneurs to unfold their unfettered business spirit in the ever-changing digital period.

Startup fever in Southeast Asia and its implication for India(9)

Startup fever in Southeast Asia and its implication for India to improve indispensable public services 

What has been undergoing in Southeast Asia can be observed in India as well. It is mainly because India is fairly conditioned with established resources needed for nurturing entrepreneurship in the wake of the digital era. 

It is little doubt that India has been highly appreciated for its top-notch technology and IT manpower in an international stage. The fact that India has made it to develop and discharge its own nuclear weapons and artificial satellites shows the state-of-the-art level of scientific achievements of the country.