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Southeast Asia is the promised land for tech startups. Here's what we need to make that a reality

7 July 2020

Southeast Asia has become a new investment plan for many shareholders throughout the world. The new Asian boom has hit the expected numbers and even surpassed them with more than a thousand companies in Southeast Asia receiving the first round of financial aid since the year 2011.

The startup market is expected to grow even more so that by 2024, the Southeastern region is presumed to produce at least 12 new businesses with a total market value of at least US$1 billion each.

There are many factors that add to Asia’s financial boom and some of them include a higher investment activity and an increased influx of new venture capital, private equity participant members, and elevated investment in startups.

Basically, everything is set to expand rapidly and outside of the region – may be even across borders – bringing countries in the area relevant financial benefits. The reason why startups are promising here are numerous, so let’s try to cover at least some of the most important in today’s article.

The market conditions are exactly where they should be

The most interesting thing going on within the Asian market as of now is the conditions designed for the market. Consumers’ demands are increasing, therefore contributing more and more to Southeast Asia’s startup development. According to InformationAge, there will be around one billion new customers added to the market by 2040, making Asia the thriving nest of business productivity.

Another great aspect to consider is the relatively young age of consumers in Asia. As of now, the median age is 30.7 years, according to the same source. More than that, most of the newest consumers are involved or somehow connected to technology, making it easier for tech startups to emerge – and we all know that technology-driven businesses are the new model to follow.

Another fact to notice is that the Asian population also accounts for about 50 per cent of today’s internet users, making the environment, even more, thriving for its customers and young entrepreneurs. Apparently, all these market conditions offer Southeast Asia the perfect opportunity to flourish and expand beyond limits.

Technology plays a huge role in this equation

The new Asian digital innovation area promises social innovation and consumer openness; there are various technological devices emerging on the market but also within the already existing industries. More than that, the tech giants such as Alibaba, Baidu, SoftBank, and Rakuten are transforming the Asian industry through social innovation and opportunity exploration.

When the new tech industry comes out with a reasonably exquisite product, the business model is rewritten and implemented in such a way that it innovates, discovers, reshapes, and brings out the authentic. Most of the technology that has been implemented until now has targeted the newly acquired customers (the younger ones), who will, in turn, change the business world for the better, bringing outstanding ideas to the table and making them happen in real life.

With this technological era upon us and all the open mindsets being discovered, there will be an increase in the growth of these countries’ economies in a relatively short period of time, turning the Asian market into one of the most valuable and profitable for startups and other businesses newly emerged. For now, Asian countries such as Malaysia, Singapore or Vietnam thrive on these new technologies and ideas implemented, turning these markets into a highly profitable environment.

The government supports the new boom

This tech ecosystem has been implemented with the help of the government in most of these countries, which is nothing but a step forward into this new technological era of quick development and world access. This sector seems to be highly supported by the government through tech-friendly policy implementation, the development of better national and international strategies and an increased number of investors attracted to this environment.

This approach that the government chooses to take helps greatly in the attempt to make tech tools and science valuable in the business world, leading to innovative and authentic outcomes.

More than that, these initiatives also play a supportive role in supporting this new vibrant startup scene and the venture capital. While Singapore is one of the most highly regarded investment hubs of Southeast Asia, other countries such as Vietnam or Indonesia are catching from behind to ensure that the marketplace runs smoothly.

According to Bain.com, stats are promising an increase in the financial tech sector to support an even higher level of investment. According to these sources, about 20-40 per cent of the deal value during the next five years will be thanks to the financial tech sector. By 2024, unicorn techs are expected to emerge and lead the investment market from then on.

There is room for improvement

Even if the growth stage investments are on the horizon, as CrunchBase argues, there are some other issues that could be looked at and fixed in the meantime. Even when things seem to go perfectly well, there is always room for improvement.

One of the things that we should look at is gender diversity within the workplace, which still remains an important issue to be discussed and assessed within the next few years. We cannot be ignorant of these things but then expect this business environment to thrive.

We can now see that, according to various surveys and research conducted, about 40 per cent of participants responded that they work in companies with an all-male senior board of directors and managers. When asking the same poll of subjects what is the gender that should be considered when beginning these startups, 35 per cent of females considered that the gender of the founder is a very important criterion, while only two per cent of males chose this option.

Are there any barriers?

Since not everything can be all sunshine and rainbows, we found some of the barriers that these startups might face when dealing with the Asian super-quickly expanding market.

There could be communication barriers – since you will be investing in an Asian market, chances are you will not be speaking the language. These cultural barriers can pose as an obstacle when you are trying to accomplish business ideals, writes resume help specialist, Craig Johnson.

You should know your region – knowing exactly where you are and where you want to go with your investments is one of the first things to consider when it comes to entering the Southeast Asian market. These countries work on different levels and economies, as some might not be quite familiar with, which is why you should know your region before entering this business model.

Assumptions that have no solid basis – companies might sometimes make the wrong assumptions when entering a new market, so make sure that the expectations that you have are in alignment with the necessities that are being assessed. Strongly formed opinions never help as startup leaders should be malleable and think outside the box since the market reacts differently to every single business model.

Note that even the Asian market is booming and open to receiving new startups, there are several points to be considered before entering. Make sure that your business is well aligned with the requests that the countries are asking for and study the market well before engaging. In the meantime, have some fun while at it. Good luck!

Source: e27

Author: James Murphy