Our second conference in Singapore highlighted the incredible pace of innovation in Southeast Asia, still one of the fastest growing regions in the world. But it would be a mistake to see this vast geographic area as a homogeneous single market. To be successful, entrepreneurs and investors need to pay close attention to regional and cultural differences. Take a look at our recap to watch select videos and dive deeper into the most recent developments of this exciting part of the world.
Breaking Into the Asian Market
Roshni Mahtani, CEO and founder of theAsianparent, a popular app for young mothers, shares learnings about successfully scaling a business across Southeast Asia (or SEA for short). Her most important takeaway is that a “one-size-fits all” strategy doesn’t work in a region this broad and diverse. “You have to go local. If you don’t go local in SEA, you better go home.” Among other things it’s important to use native languages rather than rely on English.
This ties in with Mahtani’s insight that what works in the West doesn’t necessarily work in SEA. The products and services must be oriented towards the SEA consumer, she pointed out. Easy navigation is key, for example, because Asian users typically don’t surf the Web at their desks. Instead they are more accustomed to a mobile-first culture, similar to people in China. “If you want to grow in SEA”, Mahtani recommended, “take inspiration from China as opposed to the West.”
Investing In Southeast Asia
This panel discussion – moderated by Gwendolyn Regina – brought together Abheek Anand of Sequoia Capital, India; Terence Lee of KKR; Kuo-Yi Lim of Monk’s Hill Ventures; and Martin Weiss of Burda Media.
Growing at 40 percent year-over-year, Southeast Asia’s Internet economy offers plenty of opportunities for founders and investors alike. “The last five years have been an inflection point”, due behavioral shifts and a maturing investment ecosystem, said Kuo- Yi Lim. “It feels like a rocket that we’re sitting on”, Martin Weiss agreed. Abheck Anand advised founders to create a good company DNA from the start, for example by paying attention to “frugality, being resource constraint, being capital efficient”.
The biggest challenge of the region, the panelists agreed, is successfully scaling a business across the Southeast Asia as there are so many different countries, cultures, attitudes, mindsets that need to be taken into consideration. And while plenty of capital is chasing opportunities at the moment, all investors emphasized that founders should pay attention to sustainable growth, rather than growth at any cost. “You need to have a view on where this is going otherwise it becomes a bottomless hole”, observed Terrence Lee.
Innovation Powerhouse Singapore
Author Andrew Keen and Kee Lock Chua of Vertex Holdings examine how Singapore reinvented itself as a hotspot for innovation over the past 20 years. In the past, young people typically wanted to work for governmental services or multi-national corporations, putting a premium on job security. Today, in contrast, “young people are more willing to join startups”, Kee Lock Chua said, as “entrepreneurship and failure are becoming acceptable behavior.”
Building on the strength of its educational system, Singapore has the potential to become a hub for AI, Andrew Keen said, speculating that the city-state might become a pioneer for big data or AI technocracies in the 21st century because after all Singapore has been incredibly successful in public policy, in the formation of the state, in credibility, in trusting government and in the absence of corruption.”
Capturing The Indonesian Consumer
As a country of more than 260 million people, Indonesia is one of the most important markets in SEA – and also one of its most diverse: Indonesians speak more than 700 languages, live in mega cities like Jakarta but also in rural areas and on tiny, remote islands.
This panel discussion brought together Agung Nugroho, CEO and Co-founder of Kudo; Hendrik Susanto, Chief Investment Officer of Traveloka; and Jeffrey Yuwono, CEO and Co-founder of Sorabel. The panel was moderated by Donald Wihardja of Convergence Ventures.
Angung Nugroho illustrated how technology can help empower people in developing nations: His e-commerce company, he said, had helped more than two million people become so-called “agents” who use the platform to sell items online.
Hendrik Susanto explained how Traveloka successfully managed to transform itself from a meta search engine into “the leading travel and leisure lifestyle app in Southeast Asia”. The company is now present in eight countries and has branched out into various businesses, including ticket sales and renting out apartment houses.
Given that only three percent of Indonesians own a credit card, Susanto explained, Traveloka also entered the financial services industry: “We don’t want to be a bank”, he emphasized. “This is driven by customer need.” So the company lets users perform transactions across Traveloka sites even without a credit card. “We decided that having transacted with tens of millions of customers over the years, we have a pretty good idea of their buying power”, Susanto explained. Combining internal and external data, the company created its own credit scoring system to drive its business expansion.
Sorabel’s Jeffrey Yuwono offered another example of tweaking well-known business models to meet customers’ needs. The fashion e-tailer makes sure that couriers who deliver packages “wait for 15 minutes so that you can try the clothes on”, Yuwono said. “If you don’t like it you can return it directly to the courier.”
Vietnam’s Bubbling Market
Half of Vietnam’s population is younger than 50 years, and the country has the “second-fastest growing economy in the Asian region”, moderator Teresa Teague pointed out at the beginning of this panel, which brought together Esther Nguyen of POPS Worldwide; Shuyin Tang of Patamar Capital; and Phuong Dao Thu of Côc Côc. “Everyone’s lauded it as the next cool market to invest in”, Teague added.
A highly-educated, quickly expanding middle class is “extremely hungry for content and media”, observed Esther Nguyen. “You have free WiFi everywhere”, so people are consuming content “in coffee shops; if they’re standing still, on motorbikes – just everywhere.”
Food delivery services are playing into this as well, said Phuong Dao Thu. Instead of going out for lunch or dinner, more and more people are staying in, watching TV or Internet videos – especially when it’s hot outside. “You just stay in the room and you can have the whole world delivered to you”, the market researcher noted. “So digital is changing the lives of Vietnamese people a lot.”
For investors, however, the boom does not automatically translate into riches, Shuyin Tang pointed out. “There’s a lot of exuberance about the Vietnamese consumer and the Vietnamese middle class”, she said, “but it’s actually quite challenging to create long-term, sustainable value from that.”
Many consumers “are actually quite fickle”, quickly changing preferences according to the newest trends, Tang said. “One day this beauty product is the hottest thing, the next day it’s this bubble tea brand.” Her company, she explained, concentrates on investing in fields like health and education because consumer behavior was less fickle in such areas and “there is a huge gap between the public service by the government” and what private companies can offer.
The program of DLD Singapore also included sessions on New Work, artificial intelligence and robotics, mobility and smart cities. You can watch recordings of all sessions by visiting our YouTube channel. Here’s a selection.