Across Southeast Asia, rising tech startups and firms are vying for glory in 2018. While artificial intelligence (AI) and augmented reality (AR) may be touted as the next big things in Silicon Valley, Asia will embrace simpler trends. According to a report by Google and Temasek, Southeast Asia’s Internet economy is flying along: it will reach $50 billion this year, and $200bn by 2025. Here are some of the biggest trends to watch out for heading into the new year.
C for content
In 2016, when Netflix became available worldwide, the American entertainment company advertised its video on demand streaming service in Cambodia through First They Killed My Father, the Khmer Rouge-based movie directed by Angelina Jolie. It was a strategic move, aimed to make Netflix an instant household name in one of the region’s smaller nations.
Netflix, however, faces no shortage of Asian challengers. Malaysia’s iflix continues to launch in more markets, and currently has over five million subscribers. With a solution focused solely on the Asian market, it will hope it can beat off the global content offered by its American competitor. Localized movie content is the key with which iflix and other local firms will hope can unlock a vibrant market, and stave off a Netflix-led monopoly.
E for E-Commerce
Good and bad news came in July 2017, in the shape of Amazon’s Prime Now service, which launched in Singapore. It was the service’s first outing in Southeast Asia, a landscape hitherto dominated by Jack Ma’s Alibaba, and Rocket Internet-owned Lazada.
E-commerce is perhaps no longer a new, trendy term in other parts of the world. It’s relatively novel in Asia. Individuals are able to establish shops thanks to social media channels like Facebook, Instagram, or LINE. In this space, other regional top players include Shopee and Tokopedia.
As Alibaba Group acquired a controlling stake in Lazada, and Amazon took over Whole Foods Market, the question is whether they will continue to aggressively acquire in 2018, to maintain strongholds and edge out competition, or whether smaller players can seize their own percentages of the market.
F for Fintech
Anh-Minh Do, the former tech editor of Tech In Asia and a communicator at Vertex Ventures, told Red Herring via email that, “Asia tech trend is probably dominated by blockchain and fintech. There’s also the overarching trend of more interest of Chinese companies into the rest of Asia. And possibly the rise in investment money in the region (even though there’s little rise in quality startups).”
Fintech is a major backbone for local startups. Indonesia’s ride-hailing service, Go-jek, has recently acquired three fintech firms to dominate the mobile payment market. Chinese Alipay has also taken a giant leap to strategically conquer more Asian markets. In late 2017, the Alibaba-owned digital payment firm closed a deal with Cambodian-PiPay to speed up the cashless trend. It had already been making significant moves since the beginning of 2017 via a merger of parent Ant Financial Services and helloPay.
Ant Financial took over helloPay, itself affiliated with Lazada Group, a German e-commerce company founded by Rocket Internet, in which Jack Ma has the controlling stake.
Blockchain and cryptocurrency are reaching beyond tech geeks looking into 2018. While the Cambodian National Bank warned people from investing in cryptocurrencies like Bitcoin and Ethereum, the bank is moving forward by collaborating with a Japanese fintech firm to work on a blockchain-based payment system for a national scale adoption. “The current trend, or hot thing right now, is fintech,” says Phnom Penh-based investor Chanda Pen. “And media content creation.”
T is for time (not transportation)
As most marketers and investors have suggested, unicorn starups like Uber and Grab are at the forefront of solving one the most critical things people in our world need: time. Based on Google’s report, ‘e-Conomy 2025 Southeast Asia’:
“The ride-hailing market in Southeast Asia has grown four-fold since 2015 and will be $20.1 billion by 2025, with 6 million rides booked through ride-hailing platforms every day.”
This is enough to have prompted a flood of transport (or time-saving) focused companies from entering the Southeast Asian market in 2017. They face several roadblocks (pardon the pun) that few in the United States could understand. One of these is poorly-marked roads and transport networks.
Another, bigger issue is unbanked customers. BookMeBus, a Cambodian firm, has launched 10,000 offline ticketing agents nationwide. Expect digital and real-world services to collide more frequently in smaller states. Solving problems for Southeast Asia’s population will be tough. But it is very much mission possible.