It’s official, Southeast Asia has been dubbed one of the world’s fastest evolving technology markets. With the help of The Next Web, we delve into the fundamental reasons why many international names like airbnb and Rocket Internet have sharpened their focus on this emerging market. To date Beacon New Ventures have funded two Singapore-based startups, Rocket Internet launched five companies in the region (Lazada and Zalora to name a few) while airbnb expanded in Malaysia, Thailand and Indonesia.
1. Southeast Asia is a well-populated and lucrative market with their social media use higher than ever
- Thailand are the leading users of Instagram
- Indonesia’s high usage of Twitter and Facebook
- Some stats on South-East Asian countries on the tech and social media front courtesy of Bernard Leong’s research
- 550 million total mobile subscribers
- 139 million Internet subscribers
- 3 million LinkedIn users
- 11.4 million Twitter users
- 6 million Foursquare users
- 54% of Singaporeans use smartphones
- 90% of Indonesia’s web users are on Facebook
2. Growth in Smartphones
There has been a rise in ownership of smartphones with Android the most popular device across Southeast Asia with 31% market share. However, smartphones only make up 25% of all mobiles sold suggesting plenty more growth to come. Last week the Malaysian Government revealed a proposed smartphone rebate to encourage young people to buy 3G smartphones with the aim to improve access to technology. Governmental support is not the only factor driving growth, Google has offered its services for free in the Philippines and messaging firm WhatsApp have offered low cost deals.
3. Greater focus on regional markets
Many startups are defying the conventional trend of targeting domestic markets first then expanding regionally by going“ regional from day one”. From the beginning Asian startup Ensongo, now known as Living Social, ran across multiple markets enjoying 85% market share in Thailand at its peak.
4. Opportunities for startups and entrepreneurs
Southeast Asias startup scene is hot with a plethora of startup bootcamps and events being held in the region yielding promising returns. This year JFDI Asia’s inaugural bootcamp (100 day program) helped more than half of the startups land funding – a total US $530,000 was invested between 9 of the 15 participants. This year the bootcamp will partner with Golden Gate Ventures, a leading startup incubator with their roots firmly planted in the region promoting Southeast Asia as the hub of new tech and innovation. It is clear that Southeast Asia has a growing ecosystem, access to mentoring and funding to breed startups ripe for investment. Singapore continues to be at the center of VC cash – thanks to government programs and the presence of startup hubs in the region.
- Government Regulations
- Openness of markets for foreigners
- Society still favours working for big companies over small startups
- Stability issues with tech, Indonesia’s social media usage may be high yet their uptake of fixed line internet is sluggish
- Uneven income distributions
- Low rate of bank usage across the region
- Payment system compatibility issues
Beacon New Ventures is an exciting new private equity business investing in the Asia-Pacific region. We’re a successful team of marketers and branding specialists with real-world experience in growing companies. We want to bring this expertise and our investment to small-medium tech companies.