Two global tech forces are putting their mark — and money — into Southeast Asia’s nascent startup ecosystem, but they may not be the Western names that you expect.
Rather than Google, Facebook or Microsoft, increasingly Chinese duo Alibaba and Tencent are the driving forces behind the importing of large sums of capital and vast business experience into Southeast Asia’s most promising startups.
Both companies, sworn enemies in China, appear to have realized the potential in the region and are now acting on it. That means battles, drama and probably more — welcome to Southeast Asia’s tech Game Of Thrones.
A market with promise
Southeast Asia has long been an area of interest for business for its neighbors. Tech aside, Southeast Asia is home to more than 600 million consumers, with six primary markets — Singapore, Indonesia, Thailand, Vietnam, Malaysia and the Philippines — standing out for growing economies and rising middle-classes of consumers.
In today’s digital era, smartphones have been a key catalyst. Like India, Southeast Asia’s internet users are primarily on mobile, with most having skipped the PC altogether and jumping straight to phones and tablets.
A much-cited report co-authored by Google last year showed that Southeast Asia has 260 million internet users with 3.8 million more going online per month. That’s tipped to grow the internet population to 480 million people by 2020. Sure, that isn’t China level yet — the country has 731 million internet users, half of which are mobile — but it does mean that, alongside India, Southeast Asia is a region of serious tech development potential.
That same Google report forecasted that the region’s ‘internet economy’ — i.e. all business generated from the web — will be worth $200 billion by 2025. That’s up from 6.5-fold from 2015, when it was estimated to be worth $31 billion. E-commerce alone is tipped to rise from $5.5 billion in 2015 to $88 billion in 2025, of which half will originate from Indonesia, the world’s fourth largest country, according to the report.
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