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.