Note: The article was written by Penghui Li and translated by Zinan Zhang.

Get ready for the annual insights from TechNode Content Team! The year 2023 can be considered a groundbreaking year in the technology field. As wrapping up this year, we gathered different insights from our content team. We’ll present nine Q&As, with timely updates every Wednesday and Friday in the following weeks!

Today, our Q&A comes from Penghui Li, reporter at TechNode. Penghui is a tech reporter who focuses on the Southeast Asian VC Ecosystem and Companies Going Overseas.

1. Which company has impressed you the most in 2023?

Whether from the perspective of a netizen or a content creator, the generative AI craze sparked by ChatGPT over the whole year has frequently appeared in my daily life. I have gradually accepted and actively started using such tools to enhance my work efficiency. I look forward to more surprises from this type of technology.

2. Which company has surprised you the most in 2023?

It’s amazing that VinFast, a Vietnamese electric vehicle company, actually delivered its first EV in 2023. This company was founded in 2017, and the company announced its transition from fuel vehicles to electric vehicle manufacturing in 2021. In the second half of 2022, I always saw related news about the delivery of its first car on Christmas Day that year but it was still delayed. 

Before this, I have always had doubts about VinFast. Although I have seen too much news about car manufacturing, it is difficult for me to believe whether this young car company can produce cars as its pricing is benchmarked against Tesla, and its primary target market is also North America. In addition, the industry has always referred to it as the “Vietnamese Tesla.” The combination of these accolades and repeated delays makes it hard for people not to feel that it is a script. However, VinFast has indeed been produced.

3. Which industry professional/entrepreneur/startup founder has left the most profound impression on you in 2023?

Sam Altman. Before the recent conflicts within ChatGPT and OpenAI this year, as I have a slight interest in tokusatsu, “Ultraman” would more specifically refer to Tsuburaya’s Ultraman series in my memories (Altman and Ultraman have a similar translation in China) However, after the ChatGPT and OpenAI controversies, the various Chinese translations of Altman’s name. I hope that he can have a consistent Chinese translation of his name.

4. What is the most memorable overseas event for you in 2023?

The upheaval in TikTok’s Indonesian e-commerce business. What stands out to me is that, on the one hand, as a company, TikTok’s impact extends far beyond our conventional understanding of a business. On the other hand, looking at it from the perspective of a company going global, there have been significant changes compared to simply introducing products and services to overseas markets in the past.

However, in my opinion, when a startup gradually continues to mature and becomes a presence that industry insiders pay attention to and even influence the development of the industry, the things it undertakes will gradually surpass everyone’s imagination. At this point, interpreting these things purely from the perspective of right or wrong, or good or bad, becomes quite complex. From the standpoint of a content creator, this can make me feel an intangible pressure.

5. If you were to recommend one significant industry trend for everyone to follow, what would it be?

Cross-border Payment Linkage among Southeast Asian countries and between Southeast Asia and other regions. More specifically, this movement is made up of a series of specific events over 23 years, particularly cross-border payments and cross-border transfers.

Before the pandemic, there were large groups of tourists and travelers traveling between Southeast Asian countries every year. And as the effects of the pandemic have gradually passed, these movements have begun to return. The ease of payment will further promote the transactional activities in these cross-border behaviors. Almost every Southeast Asian country will have its QR code payment platform. If one account/one phone can be used in all countries, I believe more people will also start this kind of transaction behavior.

From my perspective, I would recommend that we focus on the impact of this process of increasing integration. When we mention Southeast Asia, it’s not hard to realize that the region is made up of many countries with different development paths and processes.

6. What industry buzzword have you encountered the most in 2023?

Funding Winter. Intuitively, our readers might notice that the funding reports I’ve written in 2023 have been significantly decreasing compared to the previous two years.

7. Which phrase or sentence best summarizes your perspective on the field you’ve been following in 2023?

“Back to the reasonable range” for the tech VC in Southeast Asia.

I’ve heard this from Southeast Asia-focused investors over the past year. The Southeast Asian VC community was experiencing a boom in 2021 and the first half of 2022. In comparison, Southeast Asia is currently undergoing a “financing winter.” Despite being an “underrated region”, their performance in the past few years does not seem to be a sustainable condition in the long term. On the journey of Southeast Asia’s “digital decade”, it has only completed one-third of the road.

8. What product/company/technology/industry are you most looking forward to next year?

Electric Vehicle/EV industry (both two and four-wheeled). On the one hand, it comes from Southeast Asia’s ambition to become a regional hub for EVs. On the other hand, the Southeast Asia area is also hosting a boom in EVs going overseas in China. 

9. Do you believe AI has the potential to threaten humanity?

Yes. My understanding of the threat is to have a harmful effect. AI may currently refer specifically to AIGC, and the main reason that makes me feel threatened is the increasing presence of AI voices including harassing phone calls and video content AI reading voice. AI content, such as the articles that are becoming more commonly produced by AI, usually seems to be well-written but is actually uninformed or even wrong in its opinions. There are quite a few people who use AI assistants to discuss issues with me.

I’m not saying that AI answers are wrong, but in terms of accuracy, AI-generated content can easily be misleading.

I also realize that AI is essentially a tool, and the value it can add depends on the perspective of the people who use it. What I’m worried about has existed before AIGC was created, though they’re likely to become more numerous and difficult to discern in the future.

Anyway, before more specific regulations and policies are finalized, this buzzword will bring more room for imagination and development value to the world, and at the same time, it will also produce negative impacts that cannot be ignored. As for the concern of AI occupying human jobs, I don’t think that’s what I can explore alone, and at least not in the short term for my job, it doesn’t have that possibility.

BANGKOK, March 9, 2022–True Digital Park officially announces its strategic partnership with TechNode Global. Through our partnership, we can open up more opportunities and interactions between the tech startups across Thailand, China, and Southeast Asia, as well as breakthrough innovations and technologies that will drive a positive impact on the startup ecosystem.

This collaboration will promote the integration of science and technology innovations across Thailand, China and Southeast Asia, and the partnership is expected to further enhance cooperation between the startup ecosystems between these regions, with both parties having vast networks and resources in the technology and innovation industry.

As part of this partnership, we co-hosted an event on the topic of “Building Connections and Capabilities Before You Land in the Thai Market.” During this session, we shared advice, experiences, and best practices relevant to expanding into the Thai market. Thailand’s economy has been growing rapidly and has made remarkable progress in social and economic development, moving from a low-income country to an upper-income country in less than a generation. Bangkok has become an important regional hub for startups.

​​“We are delighted to partner with TechNode Global to strengthen both of our networks to create a stronger and wider startup ecosystem. True Digital’s goal is to attract startups, talents, and VCs from other countries to tap into the Thai market and exchange knowledge access to infrastructure and customer groups in the region. We sincerely hope that this cooperation will lead to the sustainable development of the digital economy,” says Dr. Tarit Nimmanwudipong, General Manager, True Digital Park.

With a vast network in global innovation and entrepreneurship, China-based TechNode is at the center of a unique worldwide tech ecosystem of startups, venture capital firms, industry resources, and corporate partners. In 2018, TechNode expanded its core offerings to include six business units: TN Media, TN Inno (corporate innovation services), TN Global, TN Events (branding and event services), TN Data (startup ecosystem database), and TN VC (venture capital and financing services). Through these initiatives, TechNode Global supports and connects the startup ecosystem between China and the rest of the world.

“TechNode Global’s partnership with True Digital Park builds on our respective strengths, in-depth knowledge, and expansive connections across China and Southeast Asia,” says Dr. GANG Lu, Founder and Chief Executive Officer of TechNode Group. “We look forward to serving as the trusted platform with our international events and conferences, complemented with our media to deliver timely news and insights, as well as being the connector for global entrepreneurs, investors, corporates, and other partners as we continue to level up the region’s innovation ecosystem.”

About True Digital Park

True Digital Park is Southeast Asia’s largest tech and startup hub, spanning over 200,000 sqm. The park is a critical driver for the development of the startup and innovation ecosystem in Thailand. All under one roof, startups, entrepreneurs, tech companies, investors, accelerators, incubators, academies, and government agencies co-exist in our interconnected ecosystem.

For further media information, please contact:

True Digital Park
Puyada Sawasdikosol, Assistant Director
puyada.saw@truedigitalpark.com
+66-95-556-5154

About TechNode Global

TechNode Global is a Pan-Asia tech platform offering premium tech news, industry insights, events, and tailor-made marketing solutions for startups, VCs, corporates, and other industry pioneers. With a vast network in global innovation and entrepreneurship, TechNode Global facilitates cross-border partnerships and businesses. TechNode Global is a spin-off of TechNode, China’s leading innovation and entrepreneurship platform.

For further media information, please contact:

TechNode Global
Stanley Chong, Head of TechNode Global
stanley@technode.com
+65-9690-1079

• TechNode Global, a pan-Asian tech media and community platform startup, announces seed investment of US $1 million.
• The funding round was led by Kairous Capital, with the participation of Nutty Capital and SPH Ventures.
• Fresh capital will fuel TechNode Global’s growing footprint in the Asia Pacific.
• TechNode Global intends to build its pan-Asia technology ecosystem with media, events, corporate innovation services, and cross-border businesses.

TechNode Global, a Pan-Asia technology media and community platform startup, has raised a seed round of $1 million led by Kairous Capital (Hong Kong), with participation from Nutty Capital Venture (Hong Kong) and SPH Ventures (Singapore).

The investment will accelerate TechNode Global’s effort to build the Asia Pacific’s leading tech media platform, including plans to cover more technology stories, deliver high-quality events, and build comprehensive cross-border businesses across the region. The funding will also support the company’s further international expansion.

Launched in early 2019 by Dr. Gang Lu, the founder and CEO of China’s leading bilingual tech media TechNode, TechNode Global is more than a media company. It is building a technology community platform, offering news, fundraising and deal flow support, regional events, and facilitation for corporate-startup partnerships. The startup has experienced significant growth since its launch and has partnered with corporations such as iFLYTEK, Huawei, Alibaba Cloud, and NTUC Income.

The deepening cross-border commercial ties between China and the rest of Asia, especially with Southeast Asia, present a huge market opportunity as Chinese tech behemoths step up their expansion and investments in the region. By spinning from TechNode, TechNode Global will focus on industry and regional expertise to serve the growing regional market.

Dr. Lu said, “Despite 2020 being a challenging year, TechNode Global is proud to have experienced remarkable growth and many firsts. Having the privilege to work with regional corporate clients is a testament to our mission to be the source of insights and network for tech and innovation. Asia is the next promising technology innovation center and market. With the enormous experience and resources TechNode has in China, I believe we are at the right place, at the right time to carry out our purpose.”

Joseph Lee, Managing Partner at Kairous Capital, a regional venture capital specializing in cross-border investments between China and Southeast Asia, said: “Being a regional VC investing across China and Southeast Asia, we envisage tremendous integration and collaboration opportunities in the technology and business space within the region. Because TechNode Global is connected with the Asia Pacific technology ecosystem, coupled with the recently signed RCEP, we are positive that they will be a key player as a regional innovation enabler in years to come.”

Gilbert Lam, Executive Director at Nutty Capital, said: “Despite the serious impact from Covid, we do see a big innovation opportunity trending into a number of new technology frontiers. We believe it’s perfect timing for TechNode to expand into new markets under the strong leadership of Dr. Lu, to reshape the new rhythm in the fast-growing Southeast Asia tech playground.”

TechNode Global has been privileged to partner with regional government agencies, community builders, and corporations to host its flagship event ORIGIN Conference and other community initiatives. These partners include National Research Foundation Singapore (NRF), Enterprise Singapore, Malaysia Digital Economy Corporation (MDEC), Sunway Group, True Digital Park, and others. With recognition and support from key tech communities across the region, TechNode Global will work closely with local partners to localize its services and engage with local tech ecosystems.

The company currently has an office in Singapore, and plans to open an office in Malaysia soon. 

Background

TechNode Global

TechNode Global is a Pan-Asia tech platform offering premium tech news, industry insights, events, and tailor-made marketing solutions for startups, VCs, corporates and other industry pioneers. With a vast network in global innovation and entrepreneurship, TechNode Global facilitates cross-border partnerships and businesses.

Kairous Capital

Kairous Capital, a regional venture capital specializing in cross-border investments between Greater China and South East Asia, with a focus on investing in disruptive technologies across both regions. Kairous Capital specializes in bridging the technology gap between Greater China and South East Asia, providing a complete cross-border solution to its investments.

SPH Ventures

SPH Ventures is the corporate venture capital fund of Singapore Press Holdings Ltd (“SPH”), Asia’s leading media organization listed on the Singapore Stock Exchange. The fund size totals S$100 million. It has a global mandate to invest in early-stage innovative companies in the areas of Digital Media (including advertising technology and content aggregation/ distribution/ consumption) and Consumer Internet (including e-commerce, marketplaces, social media, education technology, financial technology, etc).

Nutty Capital

Nutty Capital, where daring nuts meet to revolutionize and put a dent in the universe. Nutty Capital shares early stage venture resources with entrepreneurs across Greater China and Southeast Asia region in a selected range of areas, including internet, technology, health care, and consumer.

On Dec 10, TechNode Global and TechNode co-hosted five sessions on Day 4 of Singapore’s SWITCH conference. 

Jointly organized by the Monetary Authority of Singapore, Enterprise Singapore, and IPI Singapore, the Singapore Fintech Festival (SFF) x Singapore Week of Innovation and Technology (SWITCH) took place from Dec. 7-11. 

In line with this year’s theme “People and Talent,” TechNode and TechNode Global spotlighted the faces of the Chinese tech innovation ecosystem, inspiring budding entrepreneurs and innovators.

The following are the highlights of each panel co-hosted by TechNode Global and TechNode:

The Southeast Asia dynamic with Chinese investments and partnerships

At SWITCH Connect, Elliott Zaagman, co-host of the China Tech Investor Podcast, moderated a panel discussion with Kay-Mok Ku, Managing Partner for Gobi Southeast Asia, and Yi Pin Ng, Co-Founder and Managing Director at Yunqui Partners.

On the topic of Chinese investments and partnerships in Southeast Asia, the panelists went over several dynamics in the region, including maturity of markets, fragmentation, barriers to innovation, localization, bifurcation, and the future of innovation in the region.

Notable is the difference in maturity of markets between China and Southeast Asia. China is considered to be mature in terms of infrastructure and innovation, while Southeast Asia is host to emerging markets, which are rapidly catching up. This leads to so-called “low-hanging fruits” or markets ripe for innovation, particularly with a fast-growing internet base.

“In Southeast Asia, I see a lot of these startups actually focus more on policy and execution side of technology. So, for example, the infrastructure side, a lot of logistics companies are being funded and more and more private equity will start to come into this market as well,” shared Kay-Mok. “The question is: What are some of those barriers and what are the ones that have been overcome and what are the ones that are still not yet overcome fully.”

Read more.

Mobility insights in China – Is China’s EV industry thriving or diving?

China has done all it can to encourage manufacturers and consumers to consider electric vehicles (EVs). EV manufacturers such as Xpeng Motors have been planning to take it a step further and bring their EVs to global markets. In this panel, moderator Simon Hui of Baker McKenzie discussed the current market positioning and different opportunities for EVs in China and unchartered waters with Brian Gu, the Vice Chairman & President of Xpeng Motors.

Hui said that EV sales in China have regained momentum in the past couple of months after suffering a drought earlier this year, and Gu credited this rebound to a couple of different factors that have been in play for a while now.

Over the past couple of years, the Chinese government has offered subsidies and favorable policies for manufacturers and consumers to bring more growth to the EV industry. Players who have entered the industry early on were able to foster the environment, and this has definitely played a big role over the past couple of years in building the infrastructure needed and convincing consumers to make the change.

Even with everything the government has done to push EVs and what the pioneering companies have done to foster a more appealing environment and product, people remain doubtful about making the change from Internal Combustion vehicles to EVs. The two biggest hindrances were range anxiety and the general cost of an EV.

Read more.

China’s shoppertainment craze: Is the social commerce livestream hitting its ceiling?

We have seen e-commerce grow and reach places and heights that we would never have imagined. One of the more recent strategies that have been integrated with e-commerce is adding a social aspect to your online shopping. In this panel, Chinaaccelerator Managing Partner Oscar Ramos moderates a conversation on Social Commerce Livestreaming with Pinduoduo Executive Director for Sustainability and Agriculture Impact, Xin Yi Lim.

Pinduoduo is the pioneering interactive e-commerce platform that brings a social aspect to your online shopping experience. They aim to give you a fun experience and with friends as all of you save money together. Founder Colin Huang Zheng said that they want Pinduoduo to be like CostCo and Disney combined: savings and fun put into one package.

Social commerce livestreams open up a channel for consumers to reach merchants. One of the more significant hindrances for people to buy online is not seeing the product in person. This allows the merchant to answer any questions or concerns these consumers may have. Lim brings up clothes as an example, wherein customers are always unsure about what size they should get. Having this livestream channel allows the customer to see how it actually looks and how big a small would look next to a medium.

In the bigger picture, consumers who were foreign to e-commerce were forced to adapt due to the lockdown. The pandemic has brought an entirely new wave of users who rely on e-commerce platforms to get products such as daily essentials from FMCGs and fresh produce, which consumers would usually purchase in physical stores. Lim does not see this as a trend and explains how the sales for fresh groceries in e-commerce have been steadily increasing. This sudden boom in sales for these necessities is most likely here to stay, and some physical stores may have to restructure in the future to include fulfillment of online sales as one of their new services.

Read more.

Up close with tech veteran Lei Ming: The Baidu and Kuwo Music Founder on the next breakthrough

Lei Ming was one of the first senior engineers for one of China’s biggest social media platforms, Baidu. He joined the team early on, right after graduating, to work with Baidu’s research and development team. He described his experience back then as very different from his classmates, who decided to join big corporations. With start-ups, you would be learning on your feet and based on experience rather than learning from elsewhere. Fresh from graduation, he was forced to step up and handle teams of engineers and develop products and features from prototypes to final release products. This is where he realized that he was truly an entrepreneur at heart.

With the experience and success under his belt, Lei Ming decided to take on completely new challenges in the tech world after letting go of Kuwo. His next focus was investing in the future and artificial intelligence. Lei Ming is one of the founding partners of AIBasis Ventures. He has invested heavily in artificial intelligence and has multiple incubation and innovation centers focused on developing AI products.

Lei Ming emphasized that the opportunities come with change. One of the biggest game-changers that we have seen is the continuous advancement of the internet. From slow and expensive, the internet has suddenly become fast, cheap, accessible, and reliable. These conditions made opportunities for new businesses ripe for the picking. We have seen how our means of communication have changed from text to voice, to picture, to video, and even live high definition video chats. This is all made possible due to faster internet connections.

When deciding what to do, Lei Ming advised that entrepreneurs consider finding the right thing to do at the right time. You need to make sure that you are addressing a problem, and you need to see whether or not you have missed your window to enter that opportunity. He mentioned that as early as 2005, there were thousands of video streaming and e-commerce sites competing with each other. Unless you can guarantee that your product can deliver the best quality compared to the rest, then you might end up experiencing more problems than you would like.

Read more.

HealthTech innovations post-COVID-19

Healthcare systems are changing really fast. Christopher Udemans, TechNode Senior Reporter, moderated a conversation on innovation in healthcare delivery and how COVID has changed the landscape with Chang Liu, ACCESS Health International Regional Director for Greater China & Southeast Asia.

One of the biggest tools that have been utilized to help ease the burden on the healthcare system is telemedicine. Through these platforms, users or patients can access healthcare by accessing an app and receiving consultations from a doctor remotely. However, it isn’t as simple as just putting up an app. Healthtech, as a whole, has to be applied to the entire system. This means access to essential medicine, proper training, sufficient financing, government support, and health data.

COVID-19 has definitely played a critical role in adding attention and value to integrating technology when it comes to healthcare delivery systems. Liu enumerated three magic ingredients to ensure that health tech will work: social acceptance, government support, and enterprise innovation. Cooperation between private companies and the government needed to come together to generate a holistic solution that would address the problems COVID had brought out.

Liu said that there is a lot that other countries can take note of when it comes to how China, as a whole, has handled the virus so far. Several low/middle-income countries have already studied and adapted systems and protocols that China has already put in place.

Read more.

Jointly organized by the Monetary Authority of Singapore, Enterprise Singapore, and IPI Singapore, the Singapore Fintech Festival (SFF) x Singapore Week of Innovation and Technology (SWITCH) returns on Dec. 7-11. This year, the event will be presented in a unique hybrid format, combining a 24-hour online event platform and over 40 global satellite events in Fintech hubs around the world, including physical and digital formats. 

The global pandemic has underscored the need for innovation and resilience to overcome the greatest challenges. With the theme “People and Talent,” SFF x SWITCH 2020 will support initiatives and community activities that drive talent development, reskilling and upskilling of the financial and tech workforce. The event will also continue to champion key themes such as inclusion, green technology, and sustainability. 

In line with this year’s theme, TechNode and TechNode Global are excited to co-host five sessions on Day 4 of SWITCH. We will be spotlighting the faces that make up the Chinese tech innovation ecosystem, inspiring budding entrepreneurs and innovators.

Topics

SEA startups at a crossroad: Yay or nay to Chinese investments and partnerships?

For many China tech companies, Southeast Asia is both a second market and, increasingly, their most important global office—a home away from home. With the ongoing geopolitical tension, are Southeast Asian businesses still open to Chinese tech partnerships and investment? How can technology companies rethink their global strategies? 

Mobility insights in China: Is China’s electric vehicle industry thriving or diving?

Chinese carmakers have long sought to expand overseas amid Beijing’s ambition to build a world-class auto industry, and the baton has now been passed to young Electric Vehicle makers. Are they well-positioned to sustain high growth rates into the future, and can they prove viability in the market?

China’s shoppertainment craze: Is the social commerce livestream hitting its ceiling?

Livestream e-commerce has reached dizzying sales figures, and optimism is rife. However,  the sector may have hit its limit. The hype around livestreamed e-commerce is threatening its sustainability, especially as regulators set their sights on the sector.

Up close with tech veteran Lei Ming: The Baidu Kuwo Music founder on the next breakthrough

What are some best practices for companies to overcome adversity as they seek to expand into China? This session will look back at the tech veteran’s entrepreneurship journey: co-founding Baidu and KuWo Music, before switching gears to the angel investment and artificial intelligence sector.

How the health tech innovation environment will change post-COVID-19

China’s telemedicine industry got a big boost this year, offering vital medical services that would have otherwise been unreachable to many patients. But it’s too soon to say whether the surge in patients caused by lockdowns has lasted, or whether healthtech apps will be able to turn a profit

5 sectors of featured activities

The event will focus on five major topics: Fintech; Smart cities & urban solutions; Healthcare and biomedical sciences; Trade and connectivity; and Blockchain, AI, and 5G.

Other featured activities include: Deal Fridays, an internship program, the revamped MAS Global FinTech Hackcelerator and MAS FinTech Awards, SLINGSHOT 2020, and TechInnovation, which will culminate in special digital showcases at the week-long event. A new element this year includes digital events to engage the African Fintech community.

Featured speakers:

More than 1,400 prominent guest speakers have confirmed their participation. Among them are:

• Satya Nadella, CEO of Microsoft
• Jane Fraser, incoming CEO of Citigroup
• Akon, Founder of Akoin
• Dan Schulman, President and CEO of PayPal
• Kai-Fu Lee, Chairman and CEO of Sinovation Ventures
• Vijay Shekhar Sharma, Founder and CEO of PayTM
• Adena Friedman, President and CEO of Nasdaq
• Calvin Choi, Chairman of the Board at AMTD Group
• Henry Ma, Chief Information Officer of WeBank
• Gang Ye, COO of Sea Ltd

For more information

Please check the official website of SFF x SWITCH 2020.

SINGAPORE, NOV 18 2020: TechNode Global, a Pan-Asia tech platform, has announced the winners for the first edition of ORIGIN Innovation Awards. The winners were announced during the ORIGIN Conference, an on-demand conference track about the latest developments in the Asia tech and startup scene within TECHFEST Live x ROAD-TO-WCIT Malaysia 2020.

2020 winners include early-stage startups, venture capital firms, corporates, community builders, and influential individuals. Close to 400 contenders from 18 countries across the Asia Pacific region participated. Southeast Asia continued to be the most-represented region, with 67% of the applications, while East Asia emerged in the second spot with 23%, ahead of South Asia with 10%.

“Congratulations to the winners for making an impact on the Asian technology and innovation space. All of this year’s nominations were impressive and have demonstrated passion and dedication in providing innovative technology solutions,” said Nadia Fonny, vice president at Gobi Partners, and advisor of the ORIGIN Innovation Awards 2020 panel.

The all-star advisory team is made up of representatives from AppWorks, Cyberport, Gobi Partners, Golden Gate Ventures, InnoVen Capital, MDI Ventures, Rakuten Capital, Sistema Asia, True Digital Park, and ZWC Partners. 

Read more: Announcing the finalists for the ORIGIN Innovation Awards 2020 

TechNode Global presented the ORIGIN Innovation Awards to outstanding startups, corporates, ecosystem enablers, and movers and shakers in Asia who are poised for growth.  Nominations were evaluated based on criteria such as value proposition, strength of technology product, company growth potential, and the leadership capability. 

Dr. Gang Lu, founder and CEO of TechNode Global, said, “We’re thrilled to offer recognition to the winners as they continue their journey on a technology revolution. TechNode Global remains committed to continue building a community of tech innovation in Asia. We look forward to meeting more outstanding solutions, engaging new partners, and connecting tech businesses across the region.”

The winners (in alphabetical order):

[Startup Awards] – Artificial Intelligence 

1. AIZEN – South Korean AI Banking-as-a-Service platform. 
2. AlpacaJapan – AI and FinTech company that utilises machine learning and deep neural network to provide investment solutions for bankers, asset managers, traders, and market makers worldwide. 
3. Kata.ai – Indonesian conversational AI company with an integrated platform to build intelligent chatbots. 
4. SandStar – startup that uses AI computer vision to revolutionize retail operations. 
5. Tookitaki – enterprise software company that creates sustainable compliance programs for the financial services industry. 

[Startup Awards] – FinTech 

1. Aspire – Y Combinator-backed technology organization that serves small businesses with financial tools to solve cash flow management and working capital needs across Southeast Asia. 
2. FPL Technologies – FinTech startup that helps consumers check, monitor, and improve their credit score via an AI-based score planner. 
3. slice – FinTech startup that aims to redesign the financial experience for millennials in India. 
4. StashAway – digital wealth manager that personalizes financial planning and portfolio management for the needs of retail and accredited investors alike. 
5. Vaymuon.vn – Vietnam-based peer-to-peer lending platform that connects borrowers with investors. 

[Startup Awards] – IoT 

1. KaHa – end to end smart IoT wearables platform.
2. oneCHARGE – electric vehicles startup that operates a computer vision and AI enabled EV charging system. 
3. Origami Labs – mobile computing solutions provider that offers screen-free, voice, and gesture-based products and services. 
4. Overdrive – IoT platform specialized in fleet management, assets monitoring, environmental sensing, vehicles monitoring, and real time location system. 
5. Pinmicro – global provider of IoT-based real-time location solutions.

[Startup Awards] – HealthTech 

1. Aktivolabs – personal wellness application that utilizes digital behavioural modification tools. 
2. DocDoc – patient intelligence company that empowers patients to make data-driven healthcare decisions. 
3. mClinica – healthtech startup that connects pharmacies using mobile technology. 
4. Oncoshot – cancer collaborative platform that empowers patients, caregivers, and oncologists with access to personalized clinical trial information and top cancer experts for second opinion. 
5. Vault Dragon – healthtech startup that aims to build “Asia’s Google Maps for healthcare data”. 

[Startup Awards] – Logistics & LMF 

1. Buyandship – cross-border e-commerce logistics company in the Asia-Pacific region. 
2. DRVR – fleet management solution that uses an IoT analytics platform. 
3. Inteluck – logistics company focused on first and second mile delivery.
4. Parcel Perform – carrier-independent parcel tracking platform for e-commerce retailers.
5. PDL Technology Limited – semiconductor company who drives adoption of the use of 3 phase 6 wire BLDC motors in the transportation industry.

[Startup Awards] – Supply Chain & New Retail 

1. InsightSCS – Philippines-based provider of cloud, blockchain, and AI-based supply chain solutions.
2. IUIGA – Singapore lifestyle homeware retailer combining brick-and-mortar retailing with e-commerce.
3. Mighty Jaxx – integrated platform empowering future culture brands with an end-to-end supply chain of tech-enabled collectibles and to deliver new retail experiences to consumers globally.
4. O4S – Gurugram-based SaaS startup helping brands with 360° visibility in their downstream supply chain. 
5. Wahyoo – Indonesia-based startup focused on digitizing street food vendors. 

[Startup Awards] – E-commerce 

1. Captive Interactive – Singapore-based digital content production and integrated digital marketing agency focused on e-commerce live streaming and e-commerce marketing.
2. Intrepid Group -a Southeast Asian e-commerce consultancy firm offering end-to-end e-commerce management services.
3. Kampung Marketer – Indonesia-based social enterprise who trains and educates village youth about e-commerce and digital marketing. 
4. LoveLocal – India-based retail company that digitizes and organizes local retailers, delivering a neighborhood shopping experience of the future. 
5. myCashback – online cashback platform for multi-category consumer products.

[Startup Awards] – Media & Entertainment 

1. CAPSL – Hong Kong & Shanghai-based Esports game studio. 
2. CloudTheatre – online ticket streaming platform for theatre shows. 
3. Gushcloud International – global talent agency group that connects audiences and brands to influencers and content creators. 
4. Music Hotpot – cloud infrastructure on blockchain that enables direct creator-to-consumer transaction and monetization on the music marketplace. 
5. Zocial Earn – marketing agency that empowers everyday consumers and social users to be key opinion consumers for brands. 

[Startup Awards] – Food & AgriTech 

1. Aquaconnect – full-stack aquaculture technology venture that provides data-driven farm advisory and marketplace solutions for shrimp and fish farmers. 
2. Avant Meats – cultivated meat technology company with a pilot focus on fish and seafood. 
3. 8villages – agritech company aspiring to empower farmers and rural communities through technology. 
4. HERO Protein – Mainland China-focused plant-based meat company with its proprietary process based on a high moisture extrusion technology.
5. Sesamilk Foods – Thailand-based company producing sesame milk, which is an alternative to dairy milk and is extracted from premium-grade Thai sesame seeds.

[Startup Awards] – EduTech 

1. ACKTEC Technologies – EdTech company focused on innovation in 360 VR, virtual reality, and augmented reality for immersive learning. 
2. Careershe – career guidance startup focused on helping students between 15-25 years old in China. 
3. Flying Cape – online booking and advisory platform for tuition and enrichment classes in Singapore. 
4. Kalpha – peer to peer mobile platform where individuals can connect and meetup to learn and share any skills, knowledge and experiences on a 1-to-1 basis. 
5. Ottodot – Singapore-based science learning platform for primary 3-6 students. 

[Startup Awards] – Internet Solutions (aaS) 

1. Parkingbnb – platform for drivers to find the cheapest and closest parking space considering personal preferences. 
2. Procol – India-based intelligent procurement software. 
3. Ravenry – company that connects customers with content writers in Asia. 
4. SyZyGy –  5G-powered virtual event platform with integrative features such as VR/MR, 720° panoramic view, and live streaming.
5. Trabble – guest engagement SaaS platform for the hospitality & travel industry. 

Best Digital Transformation Award 

1. ADB – Philippines-based multilateral development bank focused on Asia and the Pacific region. ADB Digital seeks out innovative solutions aligned to the digital sandbox programs on artificial intelligence, robotics, blockchain, and big data. 
2. Fung Group – Hong Kong-based, privately-held business entity that engages in trading, logistics, distribution, and retailing businesses. Explorium is a value-generating ecosystem where businesses, start-ups, incubators, accelerators, and venture capitalists collaborate to explore disruptive technologies that are reshaping global supply chain and retail in the digital era. 
3. L’Oreal – French personal care company. The annual L’Oreal Innovation Runway launched in 2017 in Singapore is a competition that seeks to transform the beauty industry with scalable, sustainable, and environmentally-friendly technologies. 

[Ecosystem Enabler Awards] Best Community Builder 

1. HKSTP Global Acceleration Academy – free-of-charge open innovation platform that transforms corporate innovation with tech venture solutions and co-creation to succeed in the Asian market and beyond. 
2. SheLovesTech – startup competition for women and technology, seeking and accelerating the best entrepreneurs and technology for transformative impact. 
3. True Digital Park – Thailand-based startup and tech entrepreneur hub for digital innovation. 

[Ecosystem Enabler Awards] People’s Choice VC 

1. Brinc –  venture capital and accelerator firm that invests in pre-seed to series A startups and runs global accelerator programs. 
2. 500 Startups – global venture capital firm managing over $600M in committed capital across their global and regional funds.
3. Gobi Partners – venture capital firm with a Pan-Asian presence across North Asia, South Asia, and ASEAN with over US$1.1 billion in assets under management (AUM).
4. Quest Ventures – venture fund for companies that have scalability and replicability in large internet communities. 
5. Sequoia India – venture capital firm which operates in India and Southeast Asia through one arm, helping founders build companies from idea to IPO and beyond. 

[Movers & Shakers Awards] Outstanding Female VC

1. Amra Naidoo, Accelerating Asia 
2. Goh Yiping, Quest Ventures
3. Shannon Kalayanamitr, Gobi Partners

[Movers & Shakers Awards] Promising Female Founder

1. Araya Noon Hutasuwan, SnapCart 
2. Caecilia Chu, YouTrip 
3. Val Yap, PolicyPal 

[Movers & Shakers Awards] Founder of the Year

1. Jonathan Savoir, Quincus
2. Michele Ferrario, StashAway
3. Mohammad H. D. A. Farahani, SEPPURE

[Movers & Shakers Awards] Best Sustainable Solution

1. EcoWorth Tech – waste solutions company specialised in transforming waste materials into reusable products.
2. Magorium – waste plastic recycling solution and a disruptor in the road modifier industry.
3. RWDC Industries – Singapore-based company that produces biodegradable plastic.

[Movers & Shakers Awards] Resilience Award

1. Insilico Medicine – Hong Kong-based AI company for drug discovery and development. Insilico launched a COVID-19 basic and clinical research system called COVIDomic which helps scientists and researchers alike to predict the severity of the disease in hope to reduce the severity and mortality of infection. 
2. mClinica – HealthTech startup that connects pharmacies using mobile technology. mClinica has offered the much-needed digital tools for governments to conduct online research of COVID-19, to run digital awareness campaigns to its pharmacy network on prevention and screening, and to provide e-learning modules to prepare the pharmacists for the pandemic and inform them of the latest guidelines. 
3. Unacademy – India-based online learning platform. During the COVID-19 outbreak in March 2020, Unacademy Educators offered 20,000 Free Live Classes on its platform not just to existing Unacademy subscription but to the general public as well. 

ORIGIN Innovation Awards 2020 is made possible through the continued support from our community and media partners:

About ORIGIN Innovation Awards

ORIGIN Innovation Awards is APAC’s esteemed accolade for tech innovation which aims to provide recognition to companies that have exemplified the spirit of innovation and entrepreneurship in the running of their businesses. The inaugural ORIGIN Innovation Awards started in 2020 as an initiative by TechNode Global with a goal to build a dynamic community in propelling them to soar to greater heights.

About TechNode Global

TechNode Global is a Pan-Asia tech platform offering premium tech news, cross-border businesses, events, and tailor-made marketing solutions for startups, VCs, corporates, and other industry pioneers. With a vast network in global innovation and entrepreneurship, TechNode Global facilitates cross-border partnerships and businesses.

TechNode Global has announced the finalists for the first edition of ORIGIN Innovation Awards. The ORIGIN Innovation Awards recognizes outstanding startups, corporates, ecosystem enablers, and movers and shakers in Asia who are poised for growth. The awards celebrate the spirit of innovation and entrepreneurship, and also seek to inspire the dreamer in all of us. 

Nominations for the ORIGIN Innovation Awards began on Jun. 1 and ended on Sept. 20. The eligible nominees for the Ecosystem Enabler Awards and Movers and Shakers Awards were put up for public voting from Sept. 22–30. Final decisions about the awards were made by a committee of advisors, informed by the public voting.

Together with the all-star advisory team, TechNode Global spent close to two weeks evaluating every nomination and determining the finalists. The ORIGIN Innovation Awards advisory committee is made up of representatives from AppWorks, Cyberport, Gobi Partners, Golden Gate Ventures, InnoVen Capital, MDI Ventures, Rakuten Capital, Sistema Asia, True Digital Park, and ZWC Partners. 

The awards nominees come from diverse backgrounds: fledgling startups, as well as more established companies, all participated. Close to 400 contenders from 18 countries across the Asia Pacific region participated. Southeast Asia continued to be the dominant region with 67% of the applications, while East Asia emerged in the second spot with 23%, ahead of South Asia with 10%.

Dr. Gang Lu, founder and CEO of TechNode Global, said, “We are thankful to receive professional support from our advisors. Despite the negative impacts brought by the pandemic, we remain hopeful and see the unique opportunities that the crisis presents. Now, where the playing field is levelled, is probably the best time for companies to bring out the best in themselves by grabbing new opportunities.”

The ORIGIN Innovation Awards results will be announced on Nov. 18, 2020, during the ORIGIN Conference, an on-demand conference track about the latest developments in the Asia tech and startup scene within the TECHFEST Live x ROAD-TO-WCIT Malaysia 2020. Use code “ORIGINATTECHFEST” for US$150 off all-access tickets. For more information, visit https://technode.global/origin/.

The finalists (in alphabetical order):

[Startup Awards] – Artificial Intelligence 

1. AIZEN – South Korean AI Banking-as-a-Service platform. 
2. AlpacaJapan – AI and FinTech company that utilises machine learning and deep neural network to provide investment solutions for bankers, asset managers, traders, and market makers worldwide. 
3. Augmentus – full-stack robotics platform that uses mixed reality to enable code-free industrial and collaborative robot programming. 
4. Kata.ai – Indonesian conversational AI company with an integrated platform to build intelligent chatbots. 
5. Saleswhale – AI-powered lead conversion software. 
6. SandStar – startup that uses AI computer vision to revolutionize retail operations. 
7. Tookitaki – enterprise software company that creates sustainable compliance programs for the financial services industry. 
8. UIB – omnichannel messaging service provider with AI and IoT platform APIs for ISVs, chatbot builders, and developers. 

[Startup Awards] – FinTech 

1. Aspire – Y Combinator-backed technology organization that serves small businesses with financial tools to solve cash flow management and working capital needs across Southeast Asia. 
2. Curlec – Malaysia-based fintech company that makes it easy for businesses of all sizes to collect recurring payments and take control of their cash flow. 
3. FPL Technologies – FinTech startup that helps consumers check, monitor, and improve their credit score via an AI-based score planner. 
4. Gorilla – mobile telco that provides mobile connectivity utilizing decentralized blockchain technology. 
5. slice – FinTech startup that aims to redesign the financial experience for millennials in India. 
6. StashAway – digital wealth manager that personalizes financial planning and portfolio management for the needs of retail and accredited investors alike. 
7. Validus Capital – peer-to-business financing platform that utilizes data analytics, machine learning, and AI to fund growing businesses and address the financing gaps faced by SMEs. 
8. Vaymuon.vn – Vietnam-based peer-to-peer lending platform that connects borrowers with investors. 

[Startup Awards] – IoT 

1. JomParking – smart parking application that eases parking payments in Malaysia. 
2. KaHa – end to end smart IoT wearables platform. 
3. MAD Gaze – augmented reality smart glasses company. 
4. MicroSec – company specialized in IoT security. 
5. oneCHARGE – electric vehicles startup that operates a computer vision and AI-enabled EV charging system. 
6. Origami Labs – mobile computing solutions provider that offers screen-free, voice, and gesture-based products and services. 
7. Overdrive – IoT platform specialized in fleet management, assets monitoring, environmental sensing, vehicles monitoring, and real-time location system. 
8. Pinmicro –  global provider of IoT-based real-time location solutions. 

[Startup Awards] – HealthTech 

1. Aktivolabs – personal wellness application that utilizes digital behavioural modification tools. 
2. DocDoc – patient intelligence company that empowers patients to make data-driven healthcare decisions. 
3. mClinica – healthtech startup that connects pharmacies using mobile technology. 
4. Newman’s – healthtech startup that provides online medical consultations and hair loss treatment for men. 
5. Oncoshot – cancer collaborative platform that empowers patients, caregivers, and oncologists with access to personalized clinical trial information and top cancer experts for a second opinion. 
6. StratifiCare™ Inc. – healthtech company that focuses on the development and manufacturing of in-vitro diagnostics assay solutions for personalized medicine. 
7. Ubie – AI-driven MedTech startup founded by doctors and engineers to guide patients to the right treatment at the right time. 
8. Vault Dragon – healthtech startup that aims to build “Asia’s Google Maps for healthcare data”. 

[Startup Awards] – Logistics & LMF 

1. Buyandship – cross-border e-commerce logistics company in the Asia-Pacific region. 
2. DRVR – fleet management solution that uses an IoT analytics platform. 
3. Haulio – Singapore-based container haulage platform that connects hauliers and shippers to better streamline fleet management and trucking services in real-time. 
4. Inteluck – logistics company focused on first and second-mile delivery.
5. Moovaz – Singapore-based logistics and international relocation startup.
6. Parcel Perform – carrier-independent parcel tracking platform for e-commerce retailers.
7. PDL Technology Limited – semiconductor company who drives adoption of the use of 3 phase 6 wire BLDC motors in the transportation industry.
8. SHIPPOP – Thailand-based e-logistics aggregator startup. 

[Startup Awards] – Supply Chain & New Retail 

1. GrowSari – B2B e-commerce startup focusing on small groceries or sari-sari stores in the Philippines.
2. InsightSCS – Philippines-based provider of cloud, blockchain, and AI-based supply chain solutions.
3. IUIGA – Singapore lifestyle homeware retailer combining brick-and-mortar retailing with e-commerce.
4. Mighty Jaxx – integrated platform empowering future culture brands with an end-to-end supply chain of tech-enabled collectibles and to deliver new retail experiences to consumers globally.
5. NITEX – Bangladesh-based end-to-end digital supply chain management company which helps small & medium size clothing brands and buyers with their overseas productions in an exceptionally efficient and transparent manner.
6. O4S – Gurugram-based SaaS startup helping brands with 360° visibility in their downstream supply chain. 
7. Perpule – India-based omnichannel retail-tech company. 
8. Wahyoo – Indonesia-based startup focused on digitizing street food vendors. 

[Startup Awards] – E-commerce 

1. Captive Interactive – Singapore-based digital content production and integrated digital marketing agency focused on e-commerce live streaming and e-commerce marketing.
2. Frabbit – Chiang Mai-based marketplace of services and offerings ranging from food delivery, errands service, to booking a hair appointment.
3. Intrepid Group -a Southeast Asian e-commerce consultancy firm offering end-to-end e-commerce management services.
4. Kampung Marketer – Indonesia-based social enterprise who trains and educates village youth about e-commerce and digital marketing. 
5. Lokein – Malaysia-based online marketplace for second-hand items. 
6. LoveLocal – India-based retail company that digitizes and organizes local retailers, delivering a neighborhood shopping experience of the future. 
7. myCashback – online cashback platform for multi-category consumer products.
8. PriyoShop – Bangladesh-based last-mile e-commerce platform.

[Startup Awards] – Media & Entertainment 

1. CAPSL – Hong Kong & Shanghai-based Esports game studio. 
2. CloudTheatre – online ticket streaming platform for theatre shows. 
3. Gushcloud International – global talent agency group that connects audiences and brands to influencers and content creators. 
4. Kumu – live streaming app built for Gen Z and millennial Filipinos. 
5. Music Hotpot – cloud infrastructure on blockchain that enables direct creator-to-consumer transaction and monetization on the music marketplace. 
6. Partipost – crowd influencer marketing platform that matches brands to influencers with the highest brand affinity to drive authentic word of mouth marketing. 
7. Sendjoy – celebrity video booking platform where anyone can book personalized celebrity video messages to surprise their loved ones. 
8. Zocial Earn – marketing agency that empowers everyday consumers and social users to be key opinion consumers for brands. 

[Startup Awards] – Food & AgriTech 

1. Aquaconnect – full-stack aquaculture technology venture that provides data-driven farm advisory and marketplace solutions for shrimp and fish farmers. 
2. Avant Meats – cultivated meat technology company with a pilot focus on fish and seafood. 
3. CRUST – foodtech startup that upcycles food waste by turning fresh surplus ingredients into beers and other beverages. 
4. DiMuto – trade solutions platform providing end-to-end supply chain visibility for global agrifood companies. 
5. 8villages – agritech company aspiring to empower farmers and rural communities through technology. 
6. HERO Protein – Mainland China-focused plant-based meat company with its proprietary process based on a high moisture extrusion technology.
7. Sesamilk Foods – Thailand-based company producing sesame milk, which is an alternative to dairy milk and is extracted from premium-grade Thai sesame seeds.
8. Tartan Sense –  AI powered robotics solutions provider empowering small farm holders. 

[Startup Awards] – EduTech 

1. ACKTEC Technologies – EdTech company focused on innovation in 360 VR, virtual reality, and augmented reality for immersive learning. 
2. Careershe – career guidance startup focused on helping students between 15-25 years old in China. 
3. Flying Cape – online booking and advisory platform for tuition and enrichment classes in Singapore. 
4. Glints – career discovery and development platform who has launched the Glints ExpertClass program to facilitate young professionals who are curious and eager to amplify their skill set. 
5. GREDU – Indonesia-based social ed-tech platform offering school management solutions
6. Kalpha – peer to peer mobile platform where individuals can connect and meetup to learn and share any skills, knowledge and experiences on a 1-to-1 basis. 
7. myFirst – brand new collection of tech for kids and teens to engage with technological advancements. 
8. Ottodot – Singapore-based science learning platform for primary 3-6 students. 

[Startup Awards] – Internet Solutions (aaS) 

1. CoverGo – insurance technology company that provides enterprise software solutions to insurers, banks, MGAs, and brokers in Asia and beyond. 
2. FirstHive – customer data platform that enables brands to build persistent customer identities by aggregating data from across all sources of customer interactions and customer transactions.  
3. HK Decoman Technology – Hong Kong-based renovation and decoration solution platform. 
4. Parkingbnb – platform for drivers to find the cheapest and closest parking space considering personal preferences. 
5. Procol – India-based intelligent procurement software. 
6. Ravenry – company that connects customers with content writers in Asia. 
7. SyZyGy –  5G-powered virtual event platform with integrative features such as VR/MR, 720° panoramic view, and live streaming.
8. Trabble – guest engagement SaaS platform for the hospitality & travel industry. 

Best Digital Transformation Award 

1. ADB – Philippines-based multilateral development bank focused on Asia and the Pacific region. ADB Digital seeks out innovative solutions aligned to the digital sandbox programs on artificial intelligence, robotics, blockchain, and big data. 
2. Fung Group – Hong Kong-based, privately-held business entity that engages in trading, logistics, distribution, and retailing businesses. Explorium is a value-generating ecosystem where businesses, start-ups, incubators, accelerators, and venture capitalists collaborate to explore disruptive technologies that are reshaping global supply chain and retail in the digital era. 
3. L’Oreal – French personal care company. The annual L’Oreal Innovation Runway launched in 2017 in Singapore is a competition that seeks to transform the beauty industry with scalable, sustainable, and environmentally-friendly technologies. 
4. Pilmico Foods Corporation – food and agribusiness that primarily engages in the manufacture of wheat flour and wheat by-products. Pilmico 2.0 is a digital transformation initiative that focuses on workplace transformation, customer experience, business operations, and business model innovation. 
5. Sogou – provider of search, input methods, browsers, and other Internet products and services in China. Sogou Vocational Avatar is an artificial intelligence multi-mode synthesis technology that can replicate human speech, lip movements, facial expressions, and body movements. 

[Ecosystem Enabler Awards] Best Community Builder 

1. HKSTP Global Acceleration Academy – free-of-charge open innovation platform that transforms corporate innovation with tech venture solutions and co-creation to succeed in the Asian market and beyond. 
2. QBO Innovation Hub –  Philippines-based public-private partnership platform that supports Filipino startups, connects and develops the local startup ecosystem, and forwards tech and innovation. 
3. SheLovesTech – startup competition for women and technology, seeking and accelerating the best entrepreneurs and technology for transformative impact. 
4. StartUp Village – incubator/accelerator that helps disruptive and innovative startups bring their unique ideas and business concept to reality. 
5. True Digital Park – Thailand-based startup and tech entrepreneur hub for digital innovation. 

[Ecosystem Enabler Awards] People’s Choice VC 

1. Brinc –  venture capital and accelerator firm that invests in pre-seed to series A startups and runs global accelerator programs. 
2. Cocoon Capital – Singapore-based venture capital firm that invests in early stage, enterprise and deep tech companies across Southeast Asia. 
3. 500 Startups – global venture capital firm managing over $600M in committed capital across their global and regional funds.
4. Gobi Partners – venture capital firm with a Pan-Asian presence across North Asia, South Asia, and ASEAN with over US$1.1 billion in assets under management (AUM).
5. Manila Angel Investors Network (MAIN) –  private investors network in the Philippines that supports the country’s startup ecosystem by connecting investors with promising early-stage companies. 
6. Quest Ventures – venture fund for companies that have scalability and replicability in large internet communities. 
7. Sequoia India – venture capital firm which operates in India and Southeast Asia through one arm, helping founders build companies from idea to IPO and beyond. 
8. Vickers Venture Partners – global venture capital firm focused on early-stage investments in life sciences, technology, media, telecommunications, as well as consumer and financial services.

[Movers & Shakers Awards] Outstanding Female VC

1. Amra Naidoo, Accelerating Asia 
2. Goh Yiping, Quest Ventures
3. Huang Shao-Ning, AngelCentral
4. Shannon Kalayanamitr, Gobi Partners
5. Sui Ling Cheah, Wavemaker Partners SEA

[Movers & Shakers Awards] Promising Female Founder

1. Araya Noon Hutasuwan, SnapCart 
2. Caecilia Chu, YouTrip 
3. Jamie Tan, Flying Cape 
4. Katherina Lacey, Quincus 
5. Val Yap, PolicyPal 

[Movers & Shakers Awards] Founder of the Year

1. Jonathan Savoir, Quincus
2. Michele Ferrario, StashAway
3. Mohammad H. D. A. Farahani, SEPPURE
4. Rama Raditya, Qlue
5. Roland Ros, Kumu

[Movers & Shakers Awards] Best Sustainable Solution

1. Ecoinno – Hong Kong Science Park-based technology company that focuses on developing multiple categories of products from Green Composite Material™️ (GCM™️), made from cellulose with Ecoinno’s proprietary processing facilities.
2. EcoWorth Tech – waste solutions company specialised in transforming waste materials into reusable products.
3. Magorium – waste plastic recycling solution and a disruptor in the road modifier industry.
4. RWDC Industries – Singapore-based company that produces biodegradable plastic.
5. TurtleTree Labs – Singapore-based biotech startup which uses cell-based technology to create milk.

[Movers & Shakers Awards] Resilience Award

1. BookDoc – Malaysia-based healthtech startup. BookDoc launched a COVID-19 digital mobile platform offering free virtual health advisory to the public, enabling them to order COVID-19 screening tests, access to the latest COVID-19 news & updates, and uberisation of healthcare via webinar.
2. Insilico Medicine – Hong Kong-based AI company for drug discovery and development. Insilico launched a COVID-19 basic and clinical research system called COVIDomic which helps scientists and researchers alike to predict the severity of the disease in hope to reduce the severity and mortality of infection. 
3. Kargo – Indonesia-based freight logistics startup. Kargo has dedicated 16 billion IDR to establish the Logistics Relief Fund. This will aid transporters on Kargo’s platform with their working capital cycles during this COVID-19 pandemic. A portion of the fund will also be donated to meet the logistical needs of Indonesia such as food delivery and essential supplies to hospitals. 
4. mClinica – HealthTech startup that connects pharmacies using mobile technology. mClinica has offered the much-needed digital tools for governments to conduct online research of COVID-19, to run digital awareness campaigns to its pharmacy network on prevention and screening, and to provide e-learning modules to prepare the pharmacists for the pandemic and inform them of the latest guidelines. 
5. Unacademy – India-based online learning platform. During the COVID-19 outbreak in March 2020, Unacademy Educators offered 20,000 Free Live Classes on its platform not just to existing Unacademy subscription but to the general public as well. 

ORIGIN Innovation Awards 2020 is made possible through the continued support from our community and media partners:

About ORIGIN Innovation Awards

ORIGIN Innovation Awards is APAC’s esteemed accolade for tech innovation which aims to provide recognition to companies that have exemplified the spirit of innovation and entrepreneurship in the running of their businesses. The inaugural ORIGIN Innovation Awards started in 2020 as an initiative by TechNode Global with a goal to build a dynamic community in propelling them to soar to greater heights.

About TechNode Global

TechNode Global is a Pan-Asia tech platform offering premium tech news, cross-border businesses, events, and tailor-made marketing solutions for startups, VCs, corporates, and other industry pioneers. With a vast network in global innovation and entrepreneurship, TechNode Global facilitates cross-border partnerships and businesses.

2020 has been a tough year for China tech companies selling to overseas markets. In India, local authorities banned 177 Chinese apps in June and September following border clashes between the two countries. In the US, the Trump administration launched an effort to ban short video app Tiktok and instant-messaging app Wechat, which are among the most successful Chinese apps in international markets. 

Even in Europe, Chinese telecommunications equipment maker Huawei is facing increasing restrictions on supplying gear for next-generation 5G networks.

It forces us to wonder if the world is still open to China tech. It’s a question that’s fundamental to what we do here at TechNode—so we made it the headline question at our Emerge 2020 conference last Thursday.

Bottom line: Going overseas has always been tough, and in this political climate, it’s even tougher. But politics isn’t everything. Speakers said it’s still possible for some Chinese tech firms to succeed in the right overseas markets. Others face long-standing market barriers that predate current tensions.

Compliance and building trust: Many firms trying to enter developed markets have a more basic problem than bans, speakers said: consumers there just don’t trust them.

“The challenge for entrepreneurs going across the border is actually trying to understand what you can do and what you cannot do,” said William Bao Bean, general partner at investment firm SOSV.

Bean said a lack of regard for privacy has earned many Chinese tech companies a bad reputation in markets like Europe and the US. “You have to adapt to the local market. You have to follow the local law. And half the time, people don’t even know that they’re breaking the law when they go across the border.”

Chinese companies have been successful in exporting hardware to overseas markets, said Kiran Patel, senior director at China-Britain Business Council, during the discussion. Patel said he is “more positive” about the future of Chinese hardware than software in the British market because hardware companies usually don’t need to deal with a huge amount of personal data.

Trust is more important when exporting software that holds personal data, Patel said.

“That is the challenge that companies like Tiktok and Wechat have to meet when moving into a new market,” Patel said. “The first challenge that must be overcome is building trust.”

China, security champion? Privacy and security have always been weaknesses for China tech. But at a workshop at the conference, we heard that this truism could be changing as China moves to enforce new laws on privacy and cybersecurity. Carly Ramsey, director at risk consultancy Control Risks, told the audience that China has written one of the world’s most extensive set of requirements to protect data, and is now moving to enforce it. These don’t resolve international concerns about surveillance—but they could help clean up China’s “idiots with a database” problems.

Disrupting barriers: Embracing disruptive technology can be a path for getting around traditional tech barriers, speakers said. The most optimistic attendees about internationalism, by far, were the blockchain-watchers. 

Asked about political barriers, Matthew Graham, founder of Sino Global Capital, a venture capital firm focusing on blockchain companies, said that the US cannot stop China in the world of blockchain the way it has hobbled Huawei on semiconductors. 

“Most of blockchain is open source. It’s not really possible to throw a bottleneck in that way,” said Graham.

As the nascent technology matures, said Michael Sung, co-director of the Fanhai Fintech Research Center at Fudan University, China is emerging as a leader in standards-setting. State-affiliated projects like the Blockchain Services Network (BSN) are creating ecosystems that attract international players.

But Sung, and Harriet Cao of Bianjie, a blockchain startup, rejected a US vs. China framing for blockchain. Instead, they said, it’s a trans-boundary technology that can mitigate mistrust.

“Blockchain is a little bit of a different beast. It’s not about choosing to use Huawei equipment or not,” said Sung. “Blockchain is about multi-party coordination, having stakeholders being able to coordinate in a trusted and secure way, where trust doesn’t exist between the parties beforehand.”

They’re just not that into your EVs: China is home to some of the world’s most exciting electric vehicle (EV) makers, such as Nio, BYD, and Xpeng. But they’ve yet to get traction with Europe’s millions of prosperous, environmentally-conscious consumers. Marketing is a major reason, said Tu Le, founder and managing director of business intelligence firm Sino Auto Insights.

“Some Chinese companies have started to sell EVs into the EU. That could be a question because they haven’t really solidified positioning in their home market,” said Le. “Europe, like Southeast Asia, is very diverse, and therefore a marketing strategy in Germany might not work in France and Italy. That level of complexity for entering an international market is a lot to chew on for Chinese EV makers.”

“The complexity ramps up significantly for them. And that could be a drain on their capital,” he said, adding that Chinese EV makers should focus on individual markets as opposed to looking at Europe as one big market.

Go southeast: The right answer for many companies with global ambitions is to look for markets that are more like China than Germany or the US. We’ve long seen that most Chinese companies do best in markets that have more in common with China a few years ago—large rural populations, first-generation mobile users, or leapfrog growth.

Chinese tech companies should focus on Southeast Asia in expansion plans, said Bean of SOSV. In addition to friendlier regulations than Europe or India, he said, it’s a good market fit.

“Southeast Asia has a lot of the same challenges, problems, or opportunities that China had 10 years ago. It’s a mobile-first market. So people’s first or only experience with the internet is on a smartphone, which is very similar to China,” he said.

All we are saying is give tech a chance: Chinese companies have their share of problems. But at times they also make good-faith efforts to mitigate concerns. Huawei offered to sign “no-spy deals” with countries and set up a cybersecurity transparency center in Brussels and now is facing spreading bans from Western countries’ core 5G networks. Tiktok vowed to localize user data in the US and appointed a blue-ribbon panel of privacy experts—and was rewarded with an app ban. 

Of course, the election in the United States is going to have a big impact on China tech. If US-China relations keep getting worse, tech will be affected. Maybe we’re biased, but at TechNode we don’t think this is a great thing for anyone. 

With contributions from David Cohen.

For the past ten years, some of China’s biggest companies have divided the country’s tech industry. Now, they’re fighting proxy wars in the emerging markets of Southeast Asia and India, battling it out for a share of the regions’ digital real estate. 

“These investments are building the muscles for a world-class clash of titans—with the big guys competing head to head and local players serving as proxies for the foreign giants,” consultancy Bain & Company said in a report describing the scramble for market share in Southeast Asia.

China’s tech giants are known as jealous backers. When Chinese startups take money from a tech major, they’re often committing to a side and its associated ecosystem. That’s why Tencent invested in Pinduoduo—the e-commerce company’s business model is based on users getting their Wechat contacts to buy items with them.

How much do these proxy wars spill over into Chinese tech giants’ new stomping grounds—Southeast Asia and India? I wanted to know, so over the past few weeks I’ve scraped, cross-referenced, and analyzed public data to map just how divided the digital landscape is in India and Southeast Asia. Here’s what I found:

• Chinese tech majors including Tencent, Alibaba, and Xiaomi have ploughed more than $26 billion into startups in the Southeast Asia and India regions. 
• Very few of the startups have investment from the same Chinese tech giant, dividing the young companies into camps depending on where they received their funding.
• The battleground is predominantly focused on fintech and e-commerce.
• In Southeast Asia, Alibaba, Ant Group, and Tencent have made the biggest fintech investments. Meanwhile, Alibaba and Tencent lead in e-commerce funding in both Southeast Asia and India. 
• Also, in India, Tencent, and Xiaomi have participated in rounds worth more than $2 billion to fund mobility companies. 

In the past five years, companies including social media and gaming giant Tencent, e-commerce firm Alibaba and its fintech affiliate Ant Group, search company Baidu, and smartphone maker Xiaomi have participated in 89 funding rounds totalling nearly $26 billion for Indian and Southeast Asian startups. 

Simultaneously, Chinese investment has shifted away from startups in the US to those in Southeast Asia and India as a result of rising US-China geopolitical tensions.

Funding round totals
Corporate giants jealously guard information about their investments in order to avoid tipping off their rivals. As a result, our data includes the total value of each funding round—a figure that includes contributions from other investors. While the data is incomplete, it still functions as a proxy for undisclosed numbers, and allows us to gauge Chinese tech giants’ stakes in various industries and regions.  

Battle for fintech supremacy

Southeast Asia and India’s underbanked population are driving a fintech boom. 

Underbanked people typically don’t have sufficient access to commercial banking services. But with the advent of digital wallets in the region, they’re able to hail a ride, buy online, and order food for delivery. The higher availability of these platforms then stimulates a need for more fintech services. 

According to Bain & Company, digital payments in Southeast Asia have reached an “inflection point,” with transactions expected to reach $1 trillion by 2025. 

Chinese tech majors don’t want to miss out. While Tencent and Alibaba operate their own digital payment platforms in several countries around Southeast Asia, the two companies have backed more than a dozen digital payment platforms in the region and India. 

These companies collectively account for around 150 million users in Southeast Asia, according to a report by Dealstreetasia. Meanwhile, in India, that number reached more than 350 million in 2019. 

Tencent and Alibaba are each recruiting their own team. No fintech startup in the two regions has been backed by both companies.

We don’t know exactly how much Alibaba and Ant invested into e-wallets—of these investments, most were either for undisclosed amounts or into large conglomerates whose e-wallets are not the whole show. The one disclosed e-wallet investment, into Myanmar’s Wave Money, was for $73.5 million. 

Alibaba has backed companies that are focused solely on digital payments, including WaveMoney and Thailand-based Truemoney, as well as large conglomerates that offer payment services among others, including e-commerce giant Lazada and internet service platform Grab. In India, the two Chinese giants have invested in digital payments platform Paytm. 

Tencent has taken a different approach. The company hasn’t invested in any e-wallet-first companies, but has taken stakes in several large firms that, like Wechat, offer wallets. 

Tencent has taken parts in rounds for Southeast Asia and Indian companies that total $9.4 billion. These companies include Sea Limited, which operates Airpay and Shopeepay; Gojek and its Gopay system in Southeast Asia; as well as Swiggy Wallet and Ola Wallet in India. 

Online services

E-wallets are being used for services ranging from ride-hailing to food delivery to e-commerce. 

In Malaysia, the government is incentivizing use of digital payments by offering MYR 450 million ($108 million) initiative, giving MYR 30 to all Malaysians older than 18 who earn less than MYR 8,333 a month. The incentive can be claimed using a variety of e-wallets, including Grabpay. 

Like the e-wallets, Chinese tech majors are divvying up these digital commerce platforms. 

E-commerce is one major battleground. China’s tech giants have divided up their Southeast Asian counterparts. On the Tencent-affiliated side, we have Singapore-based Sea Limited—a behemoth covering e-commerce, payments, and gaming. On Alibaba’s side, we have Lazada, a Singapore headquartered e-commerce company the Chinese giant acquired in 2016 for $1 billion. 

The same is true in India, where the two companies have bifurcated the country’s e-commerce and food delivery sectors. While Alibaba backed food delivery startup Zomato. Tencent funded Swiggy. While Alibaba backed Bigbasket, Tencent funded Flipkart.

Earlier this year, Zomato was reportedly in talks with Bigbasket to offer groceries on its food delivery platform. Both companies are backed by Alibaba. 

Tencent and Alibaba have participated in rounds for e-commerce companies in the region worth a total of $12.8 billion. This total includes some investments we have already counted above as digital payments digital payments. 

Meanwhile, Chinese lifestyle services giant Tencent-backed Meituan, a far less active international investor than either Alibaba and Tencent, has also backed Swiggy.

Chinese tech firms are not only competing among each other, but also with their US counterparts, including Amazon, Facebook, and Google. 

Ride-hailing boom

With a combined urban population of around 800 million people, getting people from one place to another has become ever more important. Ride-hailing platforms have stepped in to fill this gap. 

Several Chinese tech firms have funded mobility startups in Southeast Asia and India, but there is less of a clear cut divide. Southeast Asia’s two biggest mobility companies, Grab and Gojek, compete head-to-head in Indonesia, Vietnam, Singapore, and Thailand. These two firms also offer a host of other services, including food delivery and payments.

What happens when new giants with connections to Tencent and Alibaba enter the field? Well, it depends: Meituan, backed by Tencent, has joined the older company in backing Gojek and Swiggy. 

Didi is a boundary-crosser—it was formed by a merger between Tencent- and Alibaba-backed ride-hailing firms—but has integrated with the Tencent ecosystem. However, it joined with Alibaba to back Grab.

Gojek has raised $4.8 billion from funding rounds in which Tencent and Meituan took part, while details of Alibaba’s 2018 investment in Grab were not disclosed. Now, Alibaba is reportedly looking to invest $3 billion in the Southeast Asian mobility firm. Chinese ride-hailing giant Didi took part in two of Grab’s funding rounds, worth $2.9 billion. 

In India, Xiaomi and Tencent are dividing up the country’s ride-hailing market. In 2017, Tencent invested in Ola Cabs as part of a $2 billion funding round. Then, earlier this year, Xiaomi backed Oye! Rickshaw—a company that provides last-mile electric rickshaw rides—as part of the company’s $10 million Series A. 

Chinese companies may have a harder time investing in India startups in the future. Indian officials this year launched an offensive banning more than 100 apps operated by Chinese companies and increasing scrutiny of investments from neighboring countries. 

What’s next

For China’s tech giants, Southeast Asia is an important market, and they’re in it for the long haul. Several companies have announced plans to bolster their presence in the region over the next new months. 

Tencent said in September that it had opened a new office in Singapore in an effort to boost its business in the region. Meanwhile, Bytedance reportedly plans to invest billions of dollars and recruit hundreds of employees in Singapore in the next few years. A source told CNBC that Bytedance had already begun moving engineers to the city, with previous reports claim the company aims to set up a data center to back up US data. 

The investment war between China’s biggest tech firms will likely only intensify as companies double down on the region’s burgeoning digital economy. But they won’t just be competing among each other. 

US tech giants are shown interest in investing in the same companies Alibaba and Tencent already have stakes. In 2018, Microsoft invested in Grab. Meanwhile, Amazon may be zeroing in on Gojek and Google is reportedly taking part in a $350 round for Indonesian e-commerce firm Tokopedia—one of Alibaba’s portfolio companies. 

The future battle for Southeast Asia may not be between Chinese tech giants, but US companies and their Chinese counterparts.

Ant Group, Chinese e-commerce giant Alibaba’s payments affiliate, is cutting support and funding to the overseas e-wallet companies it has invested in as the company pulls back from ambitions to become a global leader in payments, Reuters reported.

Why it matters: Ant Group has made headlines over the past few months over its plans for a dual listing in Hong Kong and Shanghai. The company aims to raise $34.4 billion—potentially the largest IPO in history.

• Since 2015, the company has invested in a slew of e-wallet firms around the world as it sought to expand its overseas presence, simultaneously launching its own payments platform Alipay in several markets globally.

Details: Ant Group is now scaling back the hundreds of millions of dollars the company spent each year on its overseas fintech investments, while bringing its support employees back home, according to Reuters’ sources in nine countries.

• The move started in late 2019 as the company began to prepare for its much-anticipated initial public offering (IPO) and grappled with regulatory changes at home.
• Ant has also reportedly hit the brakes on plans to create a global QR code-based payments system that would connect all the e-wallets it has funded.
• The comany has invested in around a dozen fintech companies including India’s Paytm, Myanmar’s Wave Money, the UK’s Worldfirst, and Thailand’s Truemoney.
• The company still plans to invest abroad, reserving around 10% of the $34.4 billion it hopes to raise in its IPO for overseas investments.
• A person familiar with the matter told Reuters that Ant plans to provide initial support to the overseas e-wallet firms it invests in and then hopes to see them succeeed by themselves.

READ MORE: Ant Group to close Hong Kong order books early on strong IPO demand

The fifth edition of TechNode’s ORIGIN conference is set to go virtual on Nov. 18, 2020. It is organized by TechNode Global, a pan-Asia tech platform offering premium tech news, cross-border businesses, events, and tailor-made marketing solutions for tech industry players. ORIGIN is an international event covering the latest developments in the Asia tech and startup scene where international industry leaders and technology innovators from across the region gather to share trends, experiences, and leadership lessons.

With the theme “Startup Asia: Celebrating the spirit of innovation and entrepreneurship,” this year’s ORIGIN will be held in conjunction with TECHFEST Live x ROAD-TO-WCIT Malaysia 2020, a three-day digital hybrid festival featuring curated live events and live-broadcast conversations about technology’s promise to do good.

The inaugural ORIGIN Innovation Awards winners will be announced during the conference, recognizing outstanding startups, corporates, ecosystem enablers and movers and shakers in Asia.

In the conference section, ORIGIN will see regional luminaries and forerunners from more than ten countries take to the stage, including:

• Anil Argilla, Head of Emerging Asia Region, Pfizer Biopharmaceuticals Group at Pfizer Inc.
• Harsh Pokharna, co-founder & CEO at OkCredit
• Cleosent Randing, founder and CEO at PasarPolis
• Jeff Chi, founding member & vice chairman at Vickers Venture Partners
• Sega Cheng, co-founder & CEO at iKala
• Andrew Lim, CFO at Gushcloud
• and more—click here to view a complete list.

The virtual conference consists of a series of panel sessions, intimate fireside chats and more which further explore topics ranging from livestream commerce to digital health, from venture investment to female entrepreneurship, focusing on the recent developments and predictions on the growth trajectories.

Dr. Gang Lu, founder and CEO of TechNode Global, said, “Now is not the time to slow down, and we are thankful to be able to host our flagship conference despite the challenging macro environment. It is important for the greater Asian community to adopt an attitude of collaboration rather than competition when dealing with the wider international community, which is why this conference is timely and essential in the current climate. We are bringing this online for the first time and we believe the partnership with TechFest Live allows both organizations to reach a wider group of audiences. We look forward to gathering like-minded outstanding startups, venture capitalists and industry experts to share their valuable insights and predictions.” 

Ngai Yuen Low, CEO of WCIT Malaysia and TECHFEST Live, said “TECHFEST is very honored to forge forward with TechNode Global, tapping on their expertise in identifying the conversations we must have. The above and beyond, however, is in making these conversations inclusive and accessible to as many as possible. Our call is to reframe the promises of the digital age. We need to hold every innovation accountable for societal good and this can only happen when informed decisions can be easily made because everyone is involved and is able to participate.” 

Use code “ORIGINATTECHFEST” for US$150 off all-access tickets. For more information, click here.

Topics and speakers

Trend explained: Everything you need to know about livestreaming e-commerce

• Andrew Lim, CFO, Gushcloud
• Sega Cheng, Co-founder & CEO, iKala
• Colin Phua, CEO & Founder, Captive Interactive
• Eric (Ye) Fang, President & Founding Partner, Favour Capital

Fostering global AI adoption with iFLYTEK

• Rachel Li, SEA Regional Manager, iFLYTEK

Digital health gaining momentum

• Dr. Liu Chang, Regional Director, China, Singapore, Hong Kong, ACCESS Health
• Anil Argilla, Head, Emerging Asia Region, Pfizer Biopharmaceuticals Group, Pfizer Inc.
• Carlos Jo Lo, Investment Associate, MassMutual Ventures
• Hui Hong Seow, Program Director, BlueChilli

Harvest the future: Big opportunities for plant-based food

• Nick Cooney, Founder and Managing Partner, Lever VC
• Kelvin Ng, BD Director (ASEAN), Green Monday
• John Friedman, Director, AgFunder Asia & GROW Accelerator

Digitizing small merchants in India

• Harsh Pokharna, Co-founder & CEO, OkCredit
• Tarana Lalwani, Director, InnoVen Capital

Reimagine insurance in the digital age

• Cleosent Randing, Founder and CEO, PasarPolis
• Max Tiong, Lead, Transformation Office, NTUC Income
• Kayvon Deldar, Program Director, Insurtech and Fintech (Singapore), Plug & Play Tech Centre

What’s the new formula for education in the Philippines?

• Grace David, Chief Marketing & Partnerships Officer, Edukasyon
• Joseph de Leon, Founding Member, Manila Angel Investors Network (MAIN)

Building resilience in supply chain & logistics

• Kevin Lim, Co-founder & CEO, Tramés
• Junxian Lee, Co-founder & CEO, Moovaz
• Garry Lim, Partnerships Director, LogiSYM

Where’s the new cash for startup founders?

• Kenneth Li, Managing Partner, MDI Ventures
• Jeff Chi, Founding Member & Vice Chairman, Vickers Venture Partners
• Pinn Lawjindakul, Vice President, Lightspeed Venture Partners
• Ambar Machfoedy, BD Director, Sistema Asia

How Japanese startups are building a smart and sustainable city

• Kobayashi Hiroyuki, Corporate Vice President, Akippa
• Mariko McTier, Co-founder, MyMizu
• Keita Mitsuhashi, Co-founder and CCO, Queue, Inc.

Thriving in the #SheEra: It’s time to shine for women entrepreneurs

• Shuyin Tang, Partner, Patamar Capital
• William Klippgen, Managing Partner, Cocoon Capital
• Susian Yeap, Co-founder, Supahands
• Jenni Risku, Founder, Women in Tech Asia

About ORIGIN

ORIGIN is TechNode Global’s premier international event covering the latest developments in the Asia tech and startup scene where international industry leaders and technology innovators from across the region gather to share trends, experiences, and leadership lessons.

ORIGIN by TechNode Global will be taking place on Nov. 18 at TECHFEST Live x ROAD-TO-WCIT Malaysia 2020, with the theme “Startup Asia: Celebrating the spirit of innovation and entrepreneurship.”

About TechFest Live x Road-to-WCIT 2020 Malaysia

A hybrid of physical and digital technology festival, TECHFEST2020 LIVE is a three-day global technology event from Nov. 18-20, 2020, packed with immersive virtual reality experiences and interactive programs. It will feature insights from industry leaders, showcase new technology and share inspiring impact stories from across the world, while highlighting George Town, a UNESCO World Heritage Site in Penang. The event will be telecasted live in addition to online streaming across 83 countries with additional on-demand access. TECHFEST2020 LIVE will also include private B2B matching, virtual exhibitions, and targeted O2O activities. TECHFEST2020 LIVE will host three main innovation conversations: a special edition of the World Congress on Information Technology, ROAD-TO-WCIT MALAYSIA; ORIGIN by Technode Global; and5G Malaysia as its main innovation conversations. ROAD-TO-WCIT MALAYSIA is a lead-up to the World Congress on Information Technology, WCIT Malaysia 2022.

Tiktok parent Bytedance is planning to invest several billion dollars in Singapore over the next three years and make the city-state its beachhead for the rest of Asia, Bloomberg reported Friday.

Details: The investment plans are part of Bytedance’s global expansion. They include the establishment of a data center and are expected to add hundreds of jobs in the country, according to the report.

• Bytedance currently has 400 employees working on technology, sales, and marketing. It has more than 200 job openings in the country.
• The company has applied for a license to operate a digital bank in Singapore. Digital wholesale banks will be allowed to take deposits from and provide banking services to small- and medium-sized companies and other non-retail customers.

Go deeper: TikTok Owner to Spend Billions in Singapore After US Ban – Bloomberg

Experts explained how Singapore is using AI to make the nation smarter at today’s World Artificial Intelligence Conference (WAIC). It was the first time the annual event focused on the city-state, with a special WAIC Singapore stage.

Here’s what happened in the six sessions:

1. Singapore’s national AI strategy

Singapore’s big push into AI is driven in large part by the government, which has made developing and using AI technology a core part of its strategy for the years ahead.

Chng Zhenzhi, director of the National AI Office within Singapore’s Smart Nation and Digital Government bureau, said the goal is for AI to “solve real-world problems.”

She added, “Our goal is to harness the potential of AI to create social and economic value,” which means focusing on what’s needed, what’s practical, what’s ethical, and avoiding technology for its own sake.

There are three pillars to this very practical strategy: digital economy, digital government, and digital society.

Singapore has outlined five projects where AI-related technology will be put to use, Chng explained:

1. Logistics: e.g. intelligent freight planning
2. Municipal services: e.g. a chatbot for reporting local issues
3. Healthcare: applications include personalized risk scores to help with early detection
4. Education: e.g. creating personal syllabi personalized to each child’s strengths
5. Border clearance: e.g. supporting completely automated immigration points

So far, Singapore has committed around $360 million to AI-related research. The next steps will include forming public-private partnerships so that the new, people-oriented AI technologies can be commercialized, Chng said.

2. AI research meets reality

Next up was Li Xiaoli, principal scientist and head of machine intellection at Singapore’s government-funded Agency for Science, Technology and Research (A*STAR). The organization was formed to figure out how exactly all those concepts and real-life needs can be transformed into working tech.

Of A*STAR’s 4,000 engineers and support staff, Li’s team of 120 are dedicated AI and data scientists. They have already set up 10 joint labs in partnership with other government agencies as well as major corporations such as KPMG, DBS, and Singapore Airlines.

Li gave the example of procurement fraud, a major issue for the tax department. With AI, his lab has been able to build what he calls an anomaly detection engine that can assemble a “suspicion ranking” on procurement deals so that auditors can prioritize which ones to check.

It saves time, reduces costs, and increases auditor productivity, he added.

His second example is one that might save lives. In collaboration with Singapore Airlines, the A*STAR scientists have used AI to build a system, using tons of sensors, to predict when aircraft components will have problems.

It shows maintenance crews the probability of failure for specific parts of a plane, avoiding lengthy and expensive downtime for the airline company by preemptively identifying parts that will need to be replaced or repaired.

3. Accelerating AI adoption in Singapore

Continuing with the theme of collaboration and implementation, Laurence Liew, director of AI innovation at AI Singapore said that his organization is what he calls a “tripartite partnership.” That means it’s a government-backed entity—funded by the National Research Foundation—that connects industry with expertise in academia and research institutes.

Liew said AI Singapore does three main things:

– AI research
– AI prizes and challenges
– Catalyzes the application of AI into industries

Because industries need to move fast, the joint AI development projects produce a working product in just nine to 18 months, he said.

Liew gave the example of a public housing group in Singapore that wanted to use AI to predict when its elevators would require maintenance. Since it runs 10,000 buildings with around 25,000 elevators, and many of the buildings are decades old, it was far from a simple project.

AI Singapore got the project rolling by signing up a professor at Singapore Management University (SMU) to develop algorithms that can predict up to a week in advance when an elevator will malfunction.

That’s just one example of AI Singapore’s 20 real-world, AI-driven projects that have been deployed since its inception three years ago.

When the organization works with private enterprises, it contributes up to $180,000, which the company matches. Then the cash is pooled and AI Singapore engages a research institute or university to start developing the tech.

4. Data sharing as a virtue

“AI is fueled by data. Without data, there is no AI,” said Ng See-Kiong, a professor at the National University of Singapore’s (NUS) Institute of Data Science and Department of Computer Science.

Ng posed the question during his presentation: how can governments make their cities smarter when data tends to be trapped in silos?

While there is no clear solution yet, Ng outlined how his research is geared toward getting data to intermingle between the three main data holders: individuals, governments, and companies. The issue is complex because there are often barriers to sharing data within corporations or governments, even between departments.

Right now, Ng is looking into six aspects of this quandary:

1. “Federated learning”: where owners still hold the data but make it available
2. “Machine unlearning”: which is like Europe’s “right to be forgotten” data privacy laws
3. AI ethics
4. Fair data valuation
5. Safety, security, privacy
6. Model-centric sharing

5. AI that is accessible as well as smart

Renee Lo, general manager for data and AI at Microsoft, emphasized AI accessibility in her presentation. The tech giant’s Azure cloud engine is central to this goal, where, in Lo’s words, all developers can access AI services whether they have formal AI training or not.

Examples include Microsoft-developed AI for transcribing audio, detecting or redacting faces, and moderating content for children.

Giving real-world examples of Azure helping developers and cities get smarter, she pointed to Jerusalem, where analysis of public transit ridership led to changes that reduced travel time by 47%. And as commuting became more pleasant, the city’s transit usage went up four-fold.

Another example was in Miami, where sensors monitor the flows in the city’s 10,000-plus kilometers of water pipes to quickly identify leaks and spills. Repair crews are sent out proactively, rather than waiting for leaks to cause visible damage which residents then report.

6. AI in the years ahead

Where do Singapore’s AI experts see the technology headed in the next few years?

The WAIC Singapore stage ended the day with a panel discussion, where a couple of our experts returned—Li and Ng—and were joined by Alibaba Cloud’s Yang Kan. The moderator was Zhu Feida, associate professor of information systems from SMU.

The discussion started with new priorities for AI. Li said that AI learning with less data is the key “fundamental challenge to be tackled.” Fraud detection, he said, is a prime example of the many areas where there’s a strong need for AI-powered tech, yet there is little real-world data from which to build models.

Ng agreed that there is a need to adapt to less data. He added that other forms of AI beyond data and models are needed, such as logical reasoning or creativity, to more closely mimic the function of the human brain.

In the near future, Yang views the improvement of AI tech platforms as crucial to the technology’s accessibility, particularly for platforms geared toward non-AI specialist users, who can then train their own models.

Zhu anticipates that researchers and companies need to better contend with the issue that data is often not free and therefore need to do a better job of pricing and auditing data.

Editor’s note: This article is first published on TechNode Global by Steven Millward, in partnership with WAIC 2020.

Hosted by the Shanghai government, the annual World Artificial Intelligence Conference (WAIC) is a global platform for innovative AI startups and corporates to exchange ideas in pursuit of humankind’s greatest technological achievements.

See: World AI Conference 2020 goes live on July 9 – 11

WAIC will host its first-ever Singapore-focused session in partnership with TechNode Global this Friday. The WAIC Singapore stage will be broadcast on July 10, 2020, from 2 p.m.–4 p.m. (GMT +8) on its official website. 

TechNode Global is honored to organize WAIC’s first Singapore-focused session. With an aim to deepen cross-border commercial ties between China and the Southeast Asia market, TechNode Global was set up with the commitment to better serve the Asia tech community and forge a closer bond between the different regions.

The city-state is known for being a trailblazer when it comes to embracing emerging technologies. AI is one of four frontier technologies essential to the country’s push for “digitally readiness,” and Singaporean institutions and companies are already putting AI into daily use. The adoption of AI promises powerful capabilities in fields ranging from retail to healthcare, education, and financial services.

Those who attend will have the opportunity to listen to a series of presentations and panel discussion delivered by industry thought leaders and policy makers. Here’s what you can expect.

Singapore’s national AI strategy

The Singapore stage will kick off with a presentation by Dr. Chng Zhenzhi, director of the National AI Office at the Smart Nation and Digital Government Office. She will discuss Singapore’s plans to harnesses AI to create social and economic value in its Smart Nation journey. Also, the nation’s plans to deploy scalable and impactful AI solutions in key sectors such as transport and logistics, smart cities and estates, healthcare, education, and safety and security.

AI research meets reality

Partnerships between the research community, industry, and government are key to the deployment and commercialization of AI solutions. Dr. Li Xiaoli, head of machine intellection, principal scientist at Institute for Infocomm Research, A*STAR, will talk about how A*STAR’s researchers collaborate with government agencies and industry such as Singapore Airlines and KMPG to deploy AI solutions to address real-world challenges.

Accelerating the adoption of AI in Singapore 

While the benefits of AI are clear, its implementation is not simple and there are several major challenges limiting the adoption. Laurence Liew, director of AI Innovation at AI Singapore, will speak about how AISG tackles challenges such as talent shortages and resource constraints through its 100 Experiments (100E) and AI Apprenticeship Program (AIAP).

Data sharing as a virtue for smart city AI 

With the increased use of AI, data has become increasingly important as well. However, data silos limit the abilities of AI. Data sharing is more important than ever. Hear from Prof. Ng See-Kiong, Professor at National University of Singapore on what more can be done to address data silo problems as he explores the challenges and opportunities of data sharing in a smart city. 

Data and AI for smart cities 

On the topic of the smart city, Renee Lo, GM of data and AI at Microsoft will share the work its researchers are doing in an effort to shape the direction for the next generation of AI following its threefold approach: meaningful innovation, empowering people, and responsible AI.

AI and cross-border data flows 

The Singapore stage will conclude with a panel discussion on the topic of AI and cross-border data flows. Dr. Li Xiaoli from Institute for Infocomm Research, A*STAR, Yang Kan, regional head of data intelligence solutions at Alibaba Cloud, Prof. Ng See-Kiong from National University of Singapore (NUS), and Prof. Zhu Feida, associate professor at Singapore Management University (SMU) will discuss their experiences partnering with industry, academia, and government. They will also offer their perspective on open-sourced AI technology. 

Singapore stage agenda

In addition to the Singapore-focused session, this year’s online WAIC consists of one exhibition platform that will showcase products and services from more than 100 exhibitors, an opening ceremony, two plenary sessions, 10 thematic side stages, and many industrial side stages, all including both live and recorded content. 

Get your tickets here to watch three days’ worth of live and recorded content. For more information, visit the official website of WAIC.

TechNode has held events to promote startups for five years, beginning with Asia Hardware Battle in 2016. This year, TechNode Global’s new COVID-19 fundraising campaign – Life’s A Pitch! will be merged with Asia Hot-tech Battle for the entire competition period in 2020, focusing on discovering rising stars and helping with fundraising efforts.

Welcoming startups in our broadest range of verticals yet, Asia Hot-Tech Battle will focus on emerging technologies that drive developments across industries, encourage quality innovation in Asia’s tech ecosystem, and have applications across different fields and professions, including consumer electronics, internet of things, artificial intelligence, fintech, smart mobility, proptech, new retail, medtech, edutech, and foodtech.

Every startup that attends will have a chance to pitch to leading Asian VCs including Gobi Partners, Qiming Venture Partners, Burda Principal Investments, Kairous Capital, and Lightspeed China Partners and have a chance to proceed to the AHB grand finals.

City pitches will be held in Beijing, Hangzhou, Nanjing, Shenzhen, Guangzhou, Taiwan, Wuhan, Chengdu, Xi’an, Singapore, Japan, India, Thailand, Malaysia, South Korea, and Vietnam (we will continue to monitor the event climate as the situation evolves).

AHB x LAP virtual pitch is open only to participants that are outside of China, in the Asia region, and Chinese startups that have operations in markets in SEA. Chinese startups that are keen to participate can still apply but will be participating in a separate track within China until the grand finals.

 Participation Requirements: 

• Startup applicants should display tech innovation and have a commercialized product or working prototype
• Startups that have successfully achieve seed funding up to Series B ONLY
• Startup has to be based outside of China and in the Asia region, (Chinese startups that have operations in the SEA market is eligible)

 Participants have opportunities to receive the following: 

• Virtual meetups with top-tier VCs
• Progress to AHB finals to compete with other outstanding startups from different parts of Asia 
• TechNode exclusive media coverage for the top 15 finalists
• Cash prizes, industry networking, and financial advisory services for the winning startup.

The first session of Asia Hot-tech Battle x Life’s a Pitch will be held on June 29, 2020 at 2 p.m. (GMT+8). Please apply to join the battle here.

Dates for future events: 

AHB & Life’s A Pitch 2

July 16, 2020, 2 p.m. to 3:30 p.m. (GMT+8)

AHB & Life’s A Pitch 3

July 30, 2020, 2 p.m. to 3:30 p.m. (GMT+8)

AHB & Life’s A Pitch 4

Aug. 13, 2020, 2 p.m. to 3:30 p.m. (GMT+8)

Visit the AHB website for more information.

Nominations are now open for the inaugural Origin Innovation Awards. Organized by TechNode Global, the awards aim to celebrate the spirit of innovation and entrepreneurship in the APAC region.

The Origin Innovation Awards will recognize companies that have made breakthroughs in technology or have influenced the growth of the region’s tech community. 

Submit your nomination for the Origin Innovation Awards now. Entries are open until August 31, 2020.

We welcome startups in the following emerging industries to submit their applications:

1. Artificial intelligence
2. Fintech
3. IoT
4. Healthtech
5. Logistics and LMF
6. Ecommerce
7. Food and Agritech
8. Media and entertainment
9. Supply chain and new retail
10. Edutech
11. Internet solutions (SaaS)

Who can submit nominations? 

The Origin Innovation Awards is open for both public- and self-nominations. We invite everyone to nominate outstanding startups that meet the following criteria: 

• The nominee must be based or operate in the APAC region
• The nominee should have a commercialized product
• The nominee should be an early-stage startup—up to and including those that have received Series B funding

Timeline

• Nomination period: June 1 – Aug 31
• Advisory committee review: Sept 1 – Oct 31
• Origin Summit x Origin Innovation Awards: Dec 2020 – Jan 2021

For more information about the Origin Innovation Awards and the other awards categories, please visit TechNode Global

Origin Innovation Awards is supported by:

TechNode Global, the international arm of TechNode, announced its partnership with Chinese AI Giant iFLYTEK on June 8, 2020, aiming to boost the community of thriving startups and AI technology applications across Asia.

Tapping the network of TechNode Global’s tech and innovation ecosystem across China and the Asia-Pacific region, the partnership provides various localized resources of AI technology by iFLYTEK’s open platform for the Asia market. The goal is to foster AI adoption among companies and help them draw on external resources in addition to their regional network.

With expertise and flagship events such as Tech Insights webinar and ORIGIN conferences in the region, TechNode Global will initiate a new AI-focused series of webinars and events in 2020 and will jointly host a Global AI Challenge with iFLYTEK in the Asia region. Meanwhile, iFLYTEK, with its upcoming open platform, will provide numerous resources to the region and dev-ops communities, helping companies in adopting AI into the daily operation of their businesses.

With a vast network in global innovation and entrepreneurship, TechNode Global is a spin-off of TechNode, aiming to be the #1 pan-Asia tech-focused platform with a focus on Pan-Asia cross-border business, events, and tailor-made marketing solutions for startups, VCs, corporates, and other industry pioneers. Being at the center of a unique worldwide tech ecosystem of startups, venture capital firms, industry resources, and corporate partners, TechNode Global supports and connects China’s startup ecosystem with the rest of the world, and facilitates interaction and cross-pollination between China and APAC.

“There is great synergy between iFLYTEK Open Platform and TechNode Global,” said Qi Shuxuan, general manager of iFLYTEK Open Platform. “We hope to strengthen this technology and innovation partnership with TechNode through the real-world application of our AI-powered technologies in this international strategy. The goal is to achieve cross-border integration of AI applications in various fields, generating positive energy and impact. We believe with the combined data, algorithms, expertise, and mutual support from both iFLYTEK and TechNode, we can empower our customers.”

“TechNode Global will continue to play an important role in supporting the tech startup ecosystem in Asia. The global expansion of China’s innovation is beneficial to the overseas innovation environment and TechNode Global platform is committed to facilitate the connection between China and the rest of the world, including Southeast Asia,” said Dr. Gang Lu, founder and CEO of TechNode.

Back in 2018, aiming to deepen cross-border commercial ties between China and the global market, TechNode Global was set up with the commitment to better serve the Asia tech community and forge a closer bond between the different regions. Since then, TechNode Global has followed Asia tech innovations and trends closely, hosting regional events in multiple Asian cities, and co-launched a 2019 Southeast Asia Internet Trends Report. Now we’re preparing our inaugural ORIGIN Innovation Awards, which celebrates the spirit of innovation and entrepreneurship across Asia.

Dr. Gang Lu, founder and CEO of TechNode said: “We are excited and fortunate to be part of the region’s growth. With the launch of ORIGIN Innovation Awards, we seek to recognize the brightest and outstanding ones in Asia across fields as diverse as artificial intelligence, food and agri, fintech, supply chain and new retail, and e-commerce, among others.”

He added: “TechNode has been organizing the annual ChinaBang Awards since 2012. Over the past few years, we have witnessed a large number of emerging Chinese startups grow into unicorns. I believe TechNode Global can build on TechNode’s expertise in this area to better serve the Asia tech community with the ORIGIN Innovation Awards.” 

ORIGIN Innovation Awards 2020 invites everyone in the Asia tech community to submit nominations for the four main categories: Startups, Digital Transformation, Ecosystem Enablers, and Movers & Shakers. 

Asia’s thriving tech startup ecosystem did not happen overnight nor by chance. We’d like to pay tribute to the efforts of ecosystem enablers who keep the wheels spinning. Asia’s success also owes a lot to the role of pioneers who are quick in grabbing opportunities and keen to embark on a technology revolution. These movers and shakers, rainmakers, and go-getters are the unsung heroes driving growth and development.

As the Covid-19 pandemic unfolds, leaders had to take risks to respond swiftly to the challenges. In light of the crisis’s significant impacts on businesses and the economy, a special Resilience Award will be given out to acknowledge those who rose to the challenge of fighting the pandemic. 

Nominations for the ORIGIN Innovation Awards are open from now till 11:59 p.m. (GMT+8) on Aug. 31, 2020 and can be submitted online at technode.global/origin/innovation-awards.

How it works

There are a total of four main categories and 19 sub-categories:

Digital Transformation Award

• Best Digital Transformation

Startup Awards

1. Artificial Intelligence
2. Fintech
3. IoT
4. HealthTech
5. Logistics and LMF
6. Ecommerce
7. Food and AgriTech
8. Media and Entertainment
9. Supply Chain and New Retail
10. EduTech
11. Internet Solutions (SaaS)

Ecosystem Enabler Awards

1. People’s Choice VCs
2. Community Builder Award

Movers & Shakers Awards

1. Outstanding Female VC
2. Promising Female Founder
3. Founder of the Year
4. Best Sustainable Solution
5. Resilience Award (Pandemic-related)

Following the nomination process, the best from each sub-category will be selected by a subject matter expert advisory committee, made up of media, VCs, PEs, and corporate executives from the APAC region. They will join us to score and review each entry before choosing the winners.

We sincerely invite you to be a part of our journey to celebrate the spirit of innovation and resilience in the APAC region, and together we will walk the path to the new normal. 

Get involved

The Origin Innovation Awards is open for both public nominations and self-nominations. We are looking for outstanding innovators in each category who meet the following criteria:

General qualifying criteria for Startup Awards category:

• The nominee must be based or operating in APAC.
• The nominee should have a commercialized product.
• The nominee’s funding round must not exceed series B (i.e. companies in seed to series B stages are eligible).

General qualifying criteria for Digital Transformation Award category:

• The nominee should have a physical office presence in APAC.
• The nominated project or initiative should have gone live and be at the execution stage, or should have been initiated between January 2017 and April 2020 (within three years).

General qualifying criteria for Ecosystem Enabler Awards category:

• The nominee must be based or operating in APAC.

General qualifying criteria for Movers & Shakers Awards category:

• The nominee should be based in APAC.

Timeline

• Public nomination and self-nomination: June 1-Aug. 31
• Advisory Committee review: Sept. 1-Oct. 31
• ORIGIN Summit x ORIGIN Innovation Awards: Dec. 2020-Jan. 2021

For more information about the ORIGIN Innovation Awards, please visit: technode.global/origin/innovation-awards

TikTok owner Bytedance has released a music-streaming app in India and Indonesia, offering what the company calls a “social music streaming” service.

Why it matters: The move is the Chinese internet giant’s first push into the music-streaming sector, putting it in competition with Spotify and Apple Music.

• The music newcomer, however, has ongoing copyright issues with the world’s biggest labels including Universal Music, Sony Music Entertainment, and Warner Music Group over tracks used on TikTok.
• Bytedance is focusing on high-growth markets outside of its home turf. Yinyuebang, a music app developed for China, appears to have made little progress and is not yet available for download on Apple’s China App Store.
• India is the biggest market for Bytedance’s crown jewel, short video platform TikTok known as Douyin within China.

Details: The music app, named Resso, is now available on Apple’s App Store and for Android devices in India and Indonesia.

• The app allows users to create playlists and post comments on the page of each track. Users can also share lyrics to social media.
• The app has secured deals with Sony Music Entertainment, Warner Music Group, Merlin and Beggars Group, as well as Indian publishers such as T-Series, Saregama, Zee Music, YRF Music, according to TechCrunch.
• The music service operates on a “freemium” model, providing free account options where users are limited to 128 kilobits per second (kbps) streaming quality with ads, while the ad-free premium accounts, which start at INR 99 (around $1.30) per month, provides 256 kbps quality and allows users to download tracks.

Context: The global music-streaming market is dominated by Spotify, which held 35% of the market, and Apple Music with 20% share in the first half of 2019, according to market research firm Counterpoint.

• India’s music-streaming industry has a user base of 200 million as of February but the market is dominated by local player Gaana with 150 million monthly active users, according to The Next Web.
• Indonesia, meanwhile, had only 0.2% of the world’s music market in 2018 with a $41.2 million market cap, but both Spotify and Tencent’s QQ Music already have presence in the country. The country is the world’s fourth most populated country and has an internet penetration rate of 64.8% and rising.

Alibaba’s fintech arm Ant Financial and TikTok operator Bytedance are joining the increasingly heated race to set up digital banking operations in Singapore.

Why it matters: The Lion City has become a top destination for Chinese companies looking to set up digital banking operations as plans in Hong Kong stall due to ongoing protests.

• Ant Financial and Bytedance are joining local contenders including gaming company Razer and ride-hailing platform Grab, which have all submitted applications for full banking licenses in the same week.

Details: Ant Financial confirmed on Thursday to Bloomberg that it applied for a wholesale license. Singaporean media The Business Times reported on Friday that Bytedance also has applied for the same license.

• Monetary Authority of Singapore (MAS) announced in June that it would issue up to two digital full bank (DFB) licenses and three digital wholesale bank (DWB) licenses.
• Digital wholesale banks will be allowed to take deposits from and provide banking services to small- and medium-sized companies and other non-retail customers, MAS said. Digital full banks, which will be allowed to provide services to retail and non-retail customers, must be controlled by Singaporeans and headquartered in the city-state.
• The banking regulator is expected to announce in mid-2020 which applicants will be rewarded the licenses. The licensed digital banks are expected to start their operating as early as the mid-2021.
• Bytedance declined to comment when contacted by TechNode on Friday.

Context: Ant Financial is regarded as one of the frontrunners in the digital banking race in the region, and obtained a license from the Hong Kong banking regulator in 2019. Ant Financial has been deepening its roots in the fintech and mobile payments markets in Southeast Asia, where Alibaba has established its e-commerce presence.

• Bytedance has been eyeing China’s digital payments market since 2018, but appears to have made little progress. Aside from its consumer lending app “Manfen” launched in October, Bytedance also offers a micro-lending service through Jinri Toutiao’s “Fangxinjie” feature.
• Bytedance is considering Singapore as the home for its global headquarters outside of China.

Update and correction: added detail about Bytedance’s consumer finance offerings, corrected the Manfen launch to October. An earlier version said it had launched in November.

A Research and Markets report states that the Southeast Asia digital advertising market is expected to grow by 13.93% and reach $15.35 billion by 2026. This flourishing region, home to approximately 650 million people represents the fastest growing regional market in the world. The growth in the number of internet users has resulted in a significant increase in digital ads spending as companies are pumping in more resources in a bid to reach more consumers. 

At the ORIGIN Indonesia, held in collaboration with Wild Digital Indonesia on November 26, 2019, Alan Hellawell, Partner of the Indonesia-focused VC firm Alpha JWC Ventures, and moderator for the panel, shared how the world’s largest B2B e-commerce marketplace Alibaba is also one of the world’s digital advertising powerhouses which are forecasted to generate $30.5 billion in digital advertising revenue in 2019.

Where is the digital ad money spent?

Marrying e-commerce and digital advertising result in the act of driving awareness and to-do action toward purchasing a product/service electronically. As consumers in Southeast Asia and China are moving towards being mobile-first, marketers have to devise effective audience-targeting strategies to attract visitors and facilitate purchases online.

“The majority of the advertising dollars are going to areas such as FMCG, retail, online platform and travel,” said Sherly Luo, the Vice-President of OPPO Advertising Indonesia, a subsidiary of OPPO Indonesia.  According to an analysis by emarketer, total Indonesia media ads spend in 2019 is expected to be around $3 billion, digital ads occupied 20.4%, its growth ratio is 18% in 2019. “Based on the statistics and our experiences in working with local SMEs, we are seeing more digital ad dollars spent by the B2C marketers,” she added.

Luo also shared that 75% of OPPO internet users are aged between 18 – 35 years old which shows that the young tech-savvy users are ready to spend on new interesting products and services. “I believe more SMEs will go digital in 2020 to capture this lucrative market,” she added. 

Varying media landscape between China and Indonesia

The Chinese social media landscape is different from Indonesia and Southeast Asia market, said Felix Luo, SEA Director of e-commerce and media company MagicWe Technologies. “There’s no Facebook and Instagram in China,” he added. The global social media giants such as Facebook, Instagram, and Whatsapp (both owned by Facebook) are banned in China under the country’s internet censorship policy. According to a briefing by TechNode in Sept 2018, Facebook is still waiting for its China business license to operate in China.

“The Chinese love story-telling branding,” said Luo, noting that the Chinese consumers are drawn to products with appealing narratives as China is going through a consumption upgrade and they are looking for something unique which sets a brand apart from competitors. “We are still seeing many outdoor billboard advertising in Indonesia, but you won’t find this in China,” he added.

“China has delivered so many new business models to the internet world over the past decade and one of them is KOL (key opinion leader),” said Hellawell. Austin Li also dubbed the “Lipstick Brother” has millions of followings on various Chinese social media sites reportedly sold 15,000 lipsticks within 15 minutes, cited by Luo as an example of how KOLs influence consumers’ purchase decision. 

Here in Indonesia, the KOLs make lifestyle and beauty videos on Instagram, YouTube, and other popular video apps, said Luo, adding that Indonesian consumers refer to such videos for product recommendations and reviews.

 The chuhai phenomenon

From Chinese technology giants to PE & VC firms, Chinese players are setting their eyes on emerging markets such as India and Southeast Asia, to sustain their growth. As China’s digital economy reaches saturation and experiences a slowdown, tech firms are betting big on Southeast Asia’s maturing digital economy with abound opportunities.

Southeast Asia is drawing comparisons with China a decade ago, at a time when there is an exponential growth of mobile-based businesses. These entrepreneurs are bringing along their industry knowledge and experience to seize this region’s untapped opportunities where it is less competitive compared to home, Dimitra Taslim, Investor at GGV Capital, told the audience at TechNode’s ORIGIN Indonesia conference, held in collaboration with Wild Digital Indonesia on November 26.

Southeast Asia’s digital economy is forecasted to hit US$300 billion by 2025, according to e-Conomy SEA 2019. It has become a highly scrutinized and favored region among both investors and businesses considering expansions. TR Harrington, program director accelerator of the cross-border mobile internet accelerator MOX and SOSV, and moderator for the panel, began the talk by asking, “What is driving this going-abroad (chuhai) phenomenon? What are some lessons learned back home [China] which can be applied when expanding to SEA? How should these companies choose their first international footprints in SEA?”

Localization is key

“Chuhai also means building a local business for the locals,” said Andy Li, CEO of Singapore-based fintech company Silot. Having lived in local communities long enough to understand both China and the local market helps him to comprehend the similarities and differences. Startups should evaluate their own strengths and analyze the product-market fit when identifying the right Southeast Asian country to land in, added Li.

“Localisation is not about incorporating a company and clinching a few business deals. Understanding the local cultures and nuances goes a long way in forging meaningful and long-term partnerships,” said Johnny Li, co-founder of Indonesia-based fintech startup SuperAtom.

Emphasizing the importance of adapting quickly, Johnny Li advises companies to engage with the local talents and understand regulatory compliance. “The key to success is the ability to understand the local market, coupled with the capital and cutting-edge technology from China,” said Johnny Li.

Building the right product

While there is a Chinese playbook that entrepreneurs can follow, Taslim highlighted the importance of building the right product for the right market. As Southeast Asia is experiencing burgeoning activities in the digital, social media and mobile activities, entertainment apps such as TikTok are taking off well in Vietnam, he added. Short video app Douyin and its overseas version TikTok with 12 million users in Vietnam alone have been downloaded more than 1.5 billion times on Apple’s App Store and Google Play since release.

“On the other hand, Chinese super-app WeChat is struggling to replicate its success in Vietnam as the locals have a preconceived notion that their chat data will be leaked due to the political history between China and Vietnam,” said Taslim.

Ultimately, he encourages businesses to focus more on the product itself than on operational matters. “Prove that you genuinely care about the local people and their needs,” he added.

The past and the future

“Phase 1 of the chuhai endeavor started way back in 2008,” said Devin He, investment director at a cross-border fund VC Grand View Capital. Companies back then focused on developing utility applications to acquire a large group of market users in the shortest time, said He, citing the success of iHandy Group who was the only third-party app available for iPhone manuals in 2009, as a pioneer successful Chuhai example.

With the passing of time, Chinese companies equipped with the right capabilities are foraying into new verticals such as entertainment, gaming, financial services, and e-commerce, He added.

“Chuhai doesn’t necessarily apply to just Chinese entrepreneurs,” said Taslim. He shared that Indian entrepreneurs and the first generation of India-based unicorns are also on the lookout for new emerging markets, such as Southeast Asia.

TechNode gathered three industry experts at its ORIGIN Indonesia Conference, hosted at the Wild Digital Indonesia Conference’s main stage on November 26, for a discussion on “Serving Fresh Funds: Food trends and innovation.” Eng Seet, the vice president at Openspace Ventures, began the discussion by asking, “How have the shifts in food and agricultural trends influenced the supply and demand?”

“Increased level of digital literacy among rural populations and farmers creates new opportunities in a digitally-driven agriculture ecosystem,” said Pamitra Wineka, the co-founder and president of TaniHub, an Indonesia-based agri-fintech company. “More farmers are selling their products online but face challenges in finding the right market” he added, noting that the intervention of middlemen in the supply chain has led to an inefficient agricultural sector. 

Edward Tirtanata, the CEO and co-founder at Kopi Kenangan, an Indonesian grab-and-go coffee chain, said, “The rise of online food order and delivery reflects the changing consumer’s behavior where speed and convenience are the key factors.” Indonesia’s online food delivery industry generated a revenue of US$1,443m in 2019 and it is expected to grow 15.1% annually, hitting a market volume of US$2,536m by 2023.

Brand-driven storytelling

“Making a brand resonate with consumers through stories that they can connect with encourages organic word of mouth discussion,” said Tirtanata. “Kopi Kenangan Mantan,” an Indonesian phrase which is loosely translated as memories of your ex-girlfriend/boyfriend, cited by Tirtanata is an example of an emotionally-resonating drink on his menu. The coffee chain startup rose to fame with organic social media posts despite minimal to zero marketing dollars spent.

“We are encouraging consumers to support local produce and farmers so they can have a better life,” said Wineka. “TaniHub disburses microloan funds to help farmers increase the quality of their produce,” he added, noting that consumers generally prefer grade A produce. Wineka suggested that consumers nowadays buy the stories you tell and brands can leverage this emotional connection.

China trends can’t be 100% replicated in SEA

Southeast Asian companies are increasingly adopting and modifying proven business models in China to plug into the SEA market. “We always benchmark ourselves against one of China’s industry giants,” said Seet. It is not the same in practice as these two ecosystems are largely different, he added, citing the comparison between TaniHub and Meicai, and Kopi Kenangan and Luckin Coffee, as examples.

“China is a nation of tea-drinkers while Indonesia’s obsession with coffee consumption is at an all-time high with 93% of them drinking only instant coffee,” said Tirnata noting that Luckin Coffee’s tea-based beverage line is pulling in more customers for the company. 

In contrary to Luckin Coffee’s emphasis on store pick-up with its intensified store density, Kopi Kenangan is riding the food delivery boom to bring sales revenue to its physical stores. “As technology and convenience integrate into consumers’ habits and lifestyles, they get more accustomed to ordering online from a particular store,” said Tirnata. Leveraging the online orders turns the physical store profitable, he added. 

“The upside of being compared to a China equivalent is that investors are interested in companies that have a validated business model,” said Wineka. While it may seem both Meicai and TaniHub are connecting farmers to the b2b buyers, he noted that Indonesia’s digital payment ecosystem is largely different from the one in China.

Wineka lauded the highly efficient and integrated digital payment system in China, which he believes is a key factor in Meicai’s rapid growth. “Indonesian farmers generally prefer receiving cash to reduce the time spent on traveling and waiting to collect payments from the banks,” he added. However, Wineka believes that this situation will change as the ecosystem matures, with the introduction of e-wallets in rural areas.

Prepared by North Ridge Partners and contributed by TechNode Global, this 2019 Southeast Asia Internet Trends Report aims to provide a concise view of the regional technology market – a short ‘one-stop’ guide on regional technology strategies, geographies, investors and companies. You will find the lowdown on what’s happening (including the rules and miracles in SEA), who are the key players and insights into which companies to watch out for. It also gives a comprehensive comparison between the US, China, and SEA in the areas of technology and investments.

“From a macro perspective, as investors and technology professionals, we can allow ourselves to get consumed by Western challenges like Brexit and trade wars or we can look to Southeast Asia as a highly prospective alternative destination for investment capital.”

– Chris Tran, Head of Asia at North Ridge Partners

Of course, not everything can be covered in detail, hence if you have any questions, please reach out to Stanley Chong, head of Southeast Asia for TechNode Global.

You can download the 2019 Southeast Asia Internet Trends Report HERE for free.

This report is for VCs and those who want to have an overview of the Southeast Asia market, as well as corporates and startups who seek updates on the current investment trends in the fragmented regions/markets of Southeast Asia.

Alibaba’s fintech-affiliate Ant Financial is looking to raise about $1 billion for its new fund to invest in startups within the region, according to a Bloomberg report on Tuesday.

Why it matters: The fintech unicorn recently ramped up its expansion efforts overseas as growth becomes more challenging in China’s cooling economy.

• The company plans to increase its customer base to 2 billion over the next 10 years and significantly grow its users outside of China. Asia will be an important focus for the company, where it has said there is huge growth potential.

Details: With the new fund, Ant Financial is reportedly looking to invest in startups in emerging markets including Southeast Asia and India, with a focus on payments and internet finance, according to an unnamed source cited by Bloomberg, confirming an earlier DealStreetAsia report.

• Ant Financial Vice President Ji Gang said at a conference in Beijing earlier this week that the company is raising a new fund for startups with higher valuations, but did not disclose the fund size or potential targets.
• Ant Financial did not immediately respond to a TechNode request for comment.

Context: Ant Financial set up its investment unit five years ago and has invested in more than 160 startups, said Ji, with a majority of the deals in the past two years. These investment efforts are strategic and align with expansion efforts for Ant Financial’s payment and financial services businesses, he said.

• Ant Financial has been expanding its footprint in Asia’s emerging markets, including India and Indonesia.
• The company is a major stakeholder in India’s leading payment firm Paytm, in which it poured another investment worth $400 million earlier this month.
• In October, India’s Economic Times reported that Ant Financial may be leading a $600 million funding round for online food delivery app Zomato.
• Ant Financial said earlier this month that it plans to apply for a virtual banking license in Singapore.

Whenever I go on stage to introduce myself, I always say: tech blogger is the best title I’ve had, ever. As a blogger, I always want to write; as a frequent traveler who gets to see innovation all over the world, I always want to share. But unfortunately, as founder of a company, I have to spend more time on management work. So a big thanks to TechNode’s English media team, who pushed me and also helped me set up this column. And I do hope I can force myself to write more, as a tech blogger, like the old days.

I spent last week at the TechCrunch Shenzhen 2019 conference. As you may know, TechNode has organized the event as TechCrunch’s China partner since it began in 2013, and we’ve seen tech trends come and go. As you can see from the image below, there were so many true innovators who were almost unknown when on our stage but what they work on now is huge in China and the global tech space.

This year’s TechCrunch is no different, and we managed to keep the standard of high-profile VCs, founders, and influencers.

But to me what stood out this year were the ones that came from overseas.  Just two or three years ago, every time we organized a TechCrunch event, we’d think about which companies from Silicon Valley we could invite to China. But now it’s different—there are loads of good startups in Silicon Valley, but the focus in the global tech space from China is more and more diverse.

Southeast Asia

What we saw the most of this year was Southeast Asia. Quite a few VCs, or even companies, were from SEA. They are looking at the Chinese ecosystem, and they wanted to discuss, meet each other, and meet the Chinese VCs. SEA also accounted for two whole side stages, and on the main stage we also had sessions talking about the region.

Today, you can feel the gap between China and the United States getting further, speaking from a non-political perspective. Frankly speaking, three to five years ago, every time we talked to a Chinese startup, they’d always start their pitch: “I’m kind of like Facebook” or “I’m kind of like Uber.” They’d always use some Silicon Valley benchmark. That meant that their model has been proven by Silicon Valley, so it’s more likely they receive money from VCs.

But now the situation has changed—if you look at all the stages at TechCrunch, and all the Chinese unicorns on stage, they don’t really have benchmarks from Silicon Valley.

However, if you go to Southeast Asia now, there it’s the time for copying from China. I met quite a few SEA-based startups, and when they come to pitch you, they would say something like, what we do is like Eleme, like Bytedance, etc. Even when you talk to SEA-based VCs, they say they want to work with Chinese VCs to co-invest in SEA startups. This is a lot like China VCs a few years ago—then, if you could raise USD money, it was a kind of endorsement.

China tech’s history with Silicon Valley is repeating itself with SEA and China. What’s next? Just to give you an example, in the e-commerce sector, when Alibaba’s Taobao was recognized as a popular e-commerce platform, there were loads of agencies to help traditional businesses set up e-shops on the platform. The next wave is probably going to be more and more merchants, who want to sell stuff not only to Chinese people, but to Southeast Asia. So I’m quite interested in ecommerce agencies like the Lazada alumni-founded one, named Intrepid.

Of course, China eventually outgrew the “as seen in America” approach. In another three to five years, who knows who could be going to Bangkok or Kuala Lumpur to learn from SEA models and bid for VC money?

Japan

For Japan, it’s a different story. We know the mobile internet business China is ahead of Japan, and the language barrier in Japan is truly painful. However, it does not mean Japan has stopped innovation or that there is nothing we can learn from Japan.

This year, we invited a few people from Japanese big corporates, government, and VCs to talk about the innovation situation in Japan, and how the Japanese ecosystem can work with the Chinese ecosystem.

In recent years, when we talked about tech innovation, we talk about the US, we talk about Israel. And we talk about SEA for the market. It is true that Japan does not have that many startups, or you can say at least not many startups from Japan want to do global business. But I’ve started to notice an interesting trend: we see more and more Japanese corporates that have money—and huge resources as well—but they can’t find that many good startups inside Japan. So instead of looking for local startups they can work with, corporates are coming to China, looking for startups that they can work with and then bring the technology back to Japan.

These corporates believe Chinese startups are more aggressive, working even harder than Japanese startups. Coming to China, Japanese corporates want to invest, work with, or buy services.

Europe

With the EU and China, we see something similar to Japan, but a little different.

Like, there’s quite a good few good family businesses, or corporate businesses, which have huge of industrial resources are looking at China. Examples are, BMW brought its corporate innovation program “Startup Garage” to China; Airbus is looking closer than ever into the smart transportation sector in China.

Communication between China and EU is missing. In China we know the AI company DeepMind, but most of us consider it as an American company. It’s actually headquartered in London. Offstage, I met investors from France and other EU countries. Everyone is thinking now is a good time to do something in China. They all agree on this: in tech space, it’s time to educate China, and educate the EU market about each other.

There are still, or at least we still expect lots of, interactivity and partnership between China and Silicon Valley. And technology wise and research wise, there is still lots China needs to do to catch up with Silicon Valley. But the whole tech world is a lot like the mobile phone market: iPhone is still important, but we have many more options besides Apple. Silicon Valley is not the only place to go for technology innovation.

Digital advertising has come a long way and has changed rapidly in the past few decades. In this digital era, it’s more challenging to win over customers as the average attention span of an ad viewer has become shorter than ever. Brands are increasingly investing in innovative advertising ideas and content-led marketing campaigns. With 98% of China’s internet users accessing the world wide web on their smart devices, brands have to devise effective audience-targeting strategies for respective tired cities. 

Similarly, Southeast Asia is often considered to be the next gold rush for e-commerce due to rising internet penetration. Evidently, we have seen Chinese tech titans making forays into the region, with Alibaba doubling down on Southeast Asian e-commerce firm Lazada Group, and Tencent Holdings investing in Singapore-based Sea Group, which runs e-commerce site Shopee. 

Hear from OPPO Advertising Indonesia and MagicWe Technologies as we examine how brands ride the digital waves to spur growth in China and Southeast Asia in this digital age. We will also be covering the e-commerce developments, a key driver in Southeast Asia where the number of online shoppers is forecasted to increase multifold in the coming years.  

LAST CALL! Grab your exclusive discounted tickets HERE and we hope to see you there at Wild Digital Indonesia x ORIGIN by TechNode on November 26. Do not miss the ASEAN-China track hosted by TechNode on the main stage of Wild Digital Indonesia. 

Driving The E-Commerce Growth In Southeast Asia with Digital Ads Panellists:

Ms. Sherly Luo

VP, OPPO Advertising Indonesia

Ms. Luo has eight years of exposure to Indonesia with a good understanding of its market behavior through studying & working, including four years of working experience as Business Development and Digital Advertising Marketing for search engine, Apps matrix as well as mobile Ads Platform in a publishing company and Baidu. Currently working in OPPO Indonesia, she is responsible for OPPO Ads Business Development in the Indonesia region.

Mr. Felix Luo

Southeast Asia Director, MagicWe Technologies 妙汇

Felix oversees MagicWe Technologies’ Southeast Asia operations in Jakarta and Bangkok. MagicWe is an E-commerce media and technology pioneer in China and Southeast Asia. They have received awards and accolades from ECI, ADMEN, GMIC, and TechCrunch.

Mr. Alan Hellawell

Partner, Alpha JWC Ventures

Alan has been actively involved in the Asian internet and e-commerce space since 1995. He has served in a variety of leadership positions, both within the industry in operational positions, and as the head of TMT research in investment banking. Alan most recently served as Sea’s (NYSE: SE) Group Chief Strategy Officer, based in Singapore; with responsibilities for key partnerships, inbound and outbound investment and M&A, investor relations and other areas. Alan has worked regularly with management across other leading global platforms such as Alibaba, Tencent, Google, Facebook, Amazon, and Paypal; in addition to the region’s leading PE, VC and investment banking firms. Alan prior to this managed Deutsche Bank’s Asia TMT research group for 11 years based in Hong Kong. Alan supported many of China’s largest internet companies from their early, private stages through IPO and beyond. He maintains long-running “CxO-level” relationships with dozens of leading names in the space. Prior to his role at Deutsche Bank, Alan held positions at Lehman Brothers, Lucent Technologies and Netscape Communications. Alan currently mentors a number of Southeast Asian internet startups.

The main challenge for Chinese tech companies entering Southeast Asia is overcoming market fragmentation, said Charles Debonneuil, CEO of Intrepid Group, in a fireside chat with TechNode Editor-in-Chief John Artman at TechCrunch Shenzhen 2019.

Debonneuil is a co-founder and former chief marketing officer at Lazada Group, one of SEA’s largest new retail platforms. Alibaba invested $1 billion to take a controlling stake in Lazada in 2016, four years after its inception. Debonneuil called the deal a “kick-off” moment for the inflow of Chinese capital into the region. His new venture, Intrepid Group, aims to help sellers “leverage media trends around e-commerce.”

The region is home to 600 million people and is growing fast. The population is young and tech-savvy, which makes it “very attractive from a macro perspective.” But the market is “much more fragmented than it looks from the outside,” the plethora of different languages and cultures make seizing opportunities far “trickier” than it seems and a practical approach to localization is necessary for success, Debonneuil said.

Foreign players are also facing stiff regional competition. “The entrepreneurial mindset is very impressive,” he said, bringing up the example of Grab, a Singapore-based ride-hailer that took over Uber’s SEA unit early last year.

Because the individual countries are small in size, companies must expand beyond national borders to compete with more prominent players in the region. Localization is key to this expansion, he said. Back in 2012, Lazada launched operations simultaneously in five countries—Indonesia, Thailand, Malaysia, Singapore, and Vietnam.

Because of these unique challenges, “the winners will be those who can form strong local teams and adapt to local cultures,” he said. Companies looking to expand into Southeast Asia face a similar dilemma that US companies deal with when expanding into China, “do they do it on their own, or do they partner with local companies?” he said.

Offline retail limited is in the region as stores are few and far apart, so e-commerce services have a lot of room to develop, he said. “Platforms have adopted the Taobao shopping experience, but they have stronger control of their logistics to ensure consistent delivery,” he said.

Unlike in China, the adoption rate for online payments remains low, and many transactions rely on cash on delivery, he said. Also, more online payment platforms vie for market share in SEA countries.

SEA sees similar trends to China in terms of platform gamification, and livestreaming is becoming increasingly popular, Debonneuil said. “Thailand and the Philippines have the highest use of Instagram hashtags per square meter. Vietnam and Thailand have the highest number of gigabytes used per month and the highest number of videos consumed per capita,” he said.

All local e-commerce apps have either launched livestreaming platforms already or are preparing to do so, he said, adding that they are also pursuing gamified features, such as leveling up to acquire coupons for purchasing goods.

Note: This article has been updated to clarify the value of Alibaba’s investment in Lazada.

The global digital economy is moving into its next phase as we observe a growing number of Chinese tech companies targeting overseas markets, bringing along their capital, expertise, and technology. As China’s domestic market reaches saturation and experiences a slowdown, Chinese VCs, tech titans, and startups are now eyeing emerging markets to drive sustainable growth.

Huge amounts of money are pouring into verticals such as e-commerce, fintech, and ride-hailing startups in Southeast Asia and India. The tech development gap between Southeast Asia and China creates vast opportunities for investors to profit from investing in up-and-coming tech companies.

Will the going abroad (chuhai) endeavor prove to be a success or a flop? Hear from GGV Capital, Silot, SuperAtom, and Grand View Capital as we discuss this phenomenon and why Chinese entrepreneurs are targeting emerging markets across the world.

There is an accelerating need for innovation across the food & agriculture value chain due to the changing consumer tastes and preferences in recent years. Consumers not only seek healthier and more affordable options, but they also demand expanded varieties and convenience.

We have witnessed Luckin Coffee bursting onto China’s coffee scene in January 2018, filling the unmet gap with a more appealing price point and its efficient delivery service. Indonesia, the world’s fourth largest coffee producer, has Kopi Kenangan, a coffee startup founded in August 2017 with a model that is similar to China’s Luckin Coffee. Moving down the food value chain –  while China has Meicai – Indonesia has TaniHub, an AgriTech startup that aims to simplify the farmers’ supply chain and connect them directly with the end consumers. At ORIGIN Indonesia, we will hear from Indonesian Food & Agri companies on how they find a sustainable business model on their quest for digital transformation. 

Last but not least, how is China shaping the future of global tech? Gain insights on China′s road from copycat to trailblazer with TechNode’s CEO, Dr. Lu Gang as he kicks off the ASEAN-China track at Wild Digital Indonesia Conference with a keynote speech on an overview of the China tech developments.

Grab your exclusive discounted tickets HERE and we hope to see you there at Wild Digital Indonesia x ORIGIN by TechNode on November 26. Do not miss the ASEAN-China track hosted by TechNode on the main stage of Wild Digital Indonesia. 

Going Abroad (Chuhai) Special: Making forays into Southeast Asia Panelists:

Mr. Dimitra Taslim | Investor, GGV Capital

Dimi looks at investments in India and Southeast Asia for GGV Capital. Previously he was an entrepreneur building a digital platform that provides access to institutional-quality wealth management. Prior to that, he led deal sourcing and deal execution across Southeast Asia for a regional VC fund. He started his career in London, where he cut his teeth in consulting, private equity, and angel investing. Dimi graduated from the London School of Economics and Harvard Business School.

Mr. Andy Li | CEO, Silot

After being a business development veteran in the Asia Pacific region for two decades, Andy Li has a strong determination to empower banks to transform the financial services landscape with artificial intelligence and big data things to better serve their customers. That is the start of Silot in March 2017.

Andy has a fruitful experience in global expansion sector for listed Internet giant firms. He was Baidu Global Payment’s former Deputy General Manager and Baidu’s regional representative in Southeast Asia. Besides, he once held significant positions at Kingsoft, Changyou.com and Sea Group (formerly known as Garena).

Mr. Johnny Li | Co-founder, SuperAtom

Born in 1981 and Chinese nationality, Li attained a Bachelor of Arts degree in 2007 from Beijing International Studies University in China. He obtained a Senior Interpretation certificate from Beijing Oriental School in 2004 and How to Become an Excellent Manager certificate from Peter F. Drucker Academy in 2011.

He started his career as an International Business Development Associate Director at Beijing New Postcom Telecom before handling job as General Manager at NQ MObile Inc and Cheetah Mobile. Johnny is currently the co-founder of PT. Uangme Fintek Indonesia (SuperAtom), a startup incubated by and spun off from Cheetah Mobile.

Ms. Devin He | Investment Director, Grand View Capital 大观资本

Devin is mainly responsible for the investment of overseas startups in the SEA and India market, focusing on TMT, entertainment and consumer fields. Involved investment cases including Habby Network, HOLLA, Shoplazza, NewsBreak, etc.

Serving Fresh Funds: Food trends and innovation Panelists:

Mr. Edward Tirtanata | CEO and Co-Founder, Kopi Kenangan

Edward is leading Kopi Kenangan to become the fastest growing coffee chain in SEA. He is also the founder of Lewis & Carroll Tea, one of the market leaders for the premium tea house.

Mr. Pamitra Wineka | Co-Founder & President, TaniHub

In 2016, Pamitra Wineka (or fondly known as Eka) and his fellow Co-Founders, Ivan Arie Sustiawan, Michael Jovan, William Setiawan, Edwin Setiawan, and Oki Setiawan setup TaniHub, a subsidiary of TaniGroup. They released the inefficiencies within Indonesia’s agriculture industry and were compelled to step in and support Indonesia’s agriculture sector through digital innovations.

Eka has gained valuable work experience in the corporate industry working with international financial institutions like The World Bank and J.P. Morgan. Eka spent four years with The World Bank from 2012 to 2016, where he held the role of a Research Analyst, starting out in Washington D.C before moving back to Indonesia. Eka’s overseas work experience enables him to bring fresh new ideas to the business and makes him a key player within the team.

Eka holds a Bachelor’s Degree in Mathematics from Bandung Technology Institute and an MBA in Economics from the University of Illinois at Urbana-Champaign.

China′s Road From Copycat to Trailblazer Keynote Speaker:

Dr. Lu Gang | Founder & CEO, TechNode 动点科技

Dr. Lu Gang is the founder and CEO of TechNode, making him one of China’s most recognized influencers in the global technology sector. What started as Dr. Lu’s personal blog quickly became a highly respected international innovation platform, with six business units including TN Media (Chinese and English technology media platform), TN Inno (corporate innovation services), TN Global (Asia and global business), TN Events (branding and event services), TN Data (startup ecosystem data analysis) and TN VC (venture capital and financing services). Through these initiatives, TechNode connects China’s start-up technology ecosystem with the rest of the world. Today, TechNode is the exclusive China partner of TechCrunch. Dr. Lu earned his Ph.D. in Wireless Communications from the University of Sheffield, UK. Dr. Lu was honored with the ‘1000 Talents Plan’ of Shanghai in 2017 and received the Entrepreneurial Award of the British Council’s Study UK Alumni Awards in 2017-18.

Southeast Asia’s internet economy is expected to cross the $100 billion mark by the end of 2019 before tripling by 2025. Indonesia, the world’s fourth most-populous country and also the largest country in Southeast Asia, with 264 million people, is a promising market given its large, youthful population who is contributing to the high smartphone penetration rate. It is undoubtedly a hotbed for start-up activity in Southeast Asia with five unicorns: Go-Jek, Traveloka, Tokopedia, Bukalapak, and OVO.

Many companies going abroad (chuhai) are choosing Indonesia as their key market. JD’s unmanned store moved into Indonesia as first overseas expansion and Alibaba led a $1.1 billion round in Indonesia-based e-commerce firm Tokopedia. 

With 171 million internet users, and significant growth of VC funding during the past five years, Indonesia is definitely a lucrative market for tech companies as new opportunities for collaboration and business expansion will emerge.

If you can’t play the video above, click HERE.

Following the success of the ORIGIN Conference in Bangkok, Thailand in September, ORIGIN by TechNode is back for its 4th edition, making its way to Jakarta on November 26, in collaboration with Wild Digital, Southeast Asia’s premier digital conference. TechNode seeks to amalgamate China and Indonesia’s tech and business eco-system for an intense two-hour discussion focusing on topics such as China’s overseas expansion, smart city, new retail, edutech, fintech, food, and more. 

With exciting panels and intensive fireside chat, ORIGIN will continue to promote ASEAN-China synergies by bringing continuous updates on the latest trends and developments in its vibrant tech industry and the SEA’s rapid growth landscape. We will be previewing ORIGIN Indonesia’s topics in the upcoming weeks so stay tuned.

Grab your exclusive discounted tickets HERE and we hope to see you there at Wild Digital Indonesia x ORIGIN by TechNode on November 26. Do not miss the ASEAN-China track hosted by TechNode on the main stage from 3 pm – 5 pm. 

Event Date: November 26,  2019 | 9:00 am – 6:00 pm (GMT +7)

Venue: Sheraton Grand Jakarta Gandaria City Hotel

Website: origin.technode.com

About Wild Digital Indonesia:

Powered by Catcha Group, Wild Digital Indonesia is set to return to Jakarta this November 26th for the 3rd time. Wild Digital expects to host more than 1000 attendees and over 50 speakers this November. Check out their video recap here. This year’s theme for Wild Digital Indonesia, “Breaking the SEA’s Billion-Dollar Ceiling”, aims to extrapolate on the rise and expansion of the unicorns of the country while answering the billion-dollar question of what next?

For the 3rd edition, Wild Digital continues with its tradition of bringing something new to every conference and for this year’s Indonesia conference, Wild Digital Indonesia will be partnering with TechNode in presenting a segment on ASEAN-China technology developments.

Held at TechNode Singapore branch office, UCommune at Bugis Junction Towers, the 2019 Asia Hardware Battle Singapore pitch was a big success.

After several rounds of intense competition, one hardware startup emerged as the winner and will be representing Singapore at the grand final round of Asia Hardware Battle in Shanghai on October 30. This hardware startup has proven extraordinary through a series of stringent evaluation and step-by-step screening by several prominent judges:

• Mr. Alvin Ng Jin Ming, Manager at Sunbo Angel Partner
• Ms. Annie Luu, Head of Asia at Investible 
• Mr. Harold Au, Investment Manager at Wavemaker
• Mr. Ong Jie Lun, Head of Ventures at Plug and Play APAC

Winner: Kinexcs

Kinexcs is a wearable medical device and analytics platform for orthopedic monitoring, patient recovery and the management of the continuum of care. Their products are used by clinicians to monitor the progress of patients undergoing orthopedic surgeries and deliver quality care. Combined advanced sensor technology with intuitive software platforms, this device allows clinicians to track, coach and monitor the patient during the entire continuum of care (pre-operative, intra-operative and post-operative). The platform eases patient-clinician interaction and provides comprehensive and actionable recovery information. This makes recovery faster by improving patient compliance, raises clinician productivity and reduces the cost for the care-providers. Besides, patients experience evidence-based recovery from the comfort of their home, which is fun and effective.

Other participating startups: 

42Lab

42Lab is an award-winning biotech education startup that aims at democratizing the learning of biotech in the classroom. It is supported by Entrepreneur First and SGInnovate in Singapore, and Cyberport in Hong Kong. 42Lab provides affordable and portable biotech equipment as a mini-laboratory and user-friendly teaching assistant app in the classroom. It aims to empower laymen to manipulate biotech ranging from kitchen science to molecular biology, synthetic biology (DNA Sequencing and Editing) and even soft-robot. 

Glow Technologies 

Glow Technologies is a wearables technology company where mixed reality meets a pair of glasses, with deep technology focus in machine-learning powered visual recognition, voice search, and navigation.

HaloLife 

HaloLife is a customers-as-a-service company that acquires and retains customers for telcos, financial services, and digital partners with the most enticing value proposition: the world’s only free premium smartphone that generates a small income for its users. HaloLife designs and distributes the Halo in partnership with a telecom, financial and digital ecosystem that secures a profitable monetization within 12 months. The leadership team combines 60 years of experience across APAC, US, Europe, and Africa in software, hardware, telecommunications, financial services, and digital marketing.

Nasket

Nasket is a smart display for services, connecting services for family use into the award-winning hardware to create new retail channels. Nasket, an ecosystem for groceries, food, repairs, maids, bill payments, smart home control, video call, telemedicine, ambulance, police, salon, massage, post, tickets, events, news, tours, and entertainments. As an international company, its mission is to be the world service management aggregator with all kinds of services integrated into the Nasket screen, building their own Nasket Ecosystem for quality-living and simplify tech for everybody.

SEPPURE

Chemical separation is imperative for industries ranging from food, pharmaceutical, and petrochemical. Not only are these processes operating at a massive scale, but they also require immense amounts of energy-intensive distillation and evaporation separations. These processes are largely invisible, though they have become one of the world’s largest silent polluters, accounting for up to 15% of the planet’s entire energy consumption. SEPPURE creates sustainable nanofiltration solutions to separate chemical mixtures at a molecular level with minimal energy used, curbing the reliance on one of the most energy-intensive and polluting processes on the planet.

REVIVO

REVIVO Biosystems develops novel platforms and methods to help cosmetic and pharmaceutical research labs test the safety and efficacy of chemicals, ingredients, and formulations in a more reliable and efficient way, without using animal products. Their organ-on-chip products are based on novel microfluidic devices for integrating tissue explants or 3D-cell cultures with automated testing. They enable non-animal studies with higher clinical relevance throughout a 10 to 100 fold reduction in biomaterial consumption, and a 10 fold reduction in specialized manpower. Their customers are contracted research organizations, research laboratories, ingredient providers, and pharma and cosmetic manufacturers.

Next Stop

We would like to extend a big thanks to all participants, judges, and partner organizers. We couldn’t have had such a successful outcome without the help of ACE, Investible, Launchpad, NUS Enterprise, Plug and Play, SMU, Sunbo Angel Partners, TRIVE, UCommune, and Wavemaker Partners, for their great support. Kinexcs is getting ready to battle it out at the Asia Hardware Battle Grand Finale in Shanghai. 

TechNode gathered four industry experts at its ORIGIN Thailand Conference, during the True Digital Park Grand Opening 2019, for a discussion on “Building Southeast Asia’s Digital Payment Powerhouse.” Lock Fan, the head of venture capital at TechNode, began the talk by asking, “What are the main reasons that contribute to the high (close to 75%) unbanked population in Southeast Asia?”

“Wealth inequality is the key reason contributing to the high unbanked population,” said Monsinee Nakapanant, the co-president of Ascent Money, a Thailand-based fintech company. “Financial institutions traditionally focus on providing services and account for the top-tier segment, with minimal resources allocated to serve the unbanked,” she added, noting that close to 80% of Thailand’s wealth is controlled by 1% of the people.

Leon Chua, the executive director & head of business development APAC at Airwallex, a cross-border payment solution, said, “Banking solutions targeted at SMEs in the market proved to be costly and startups without a track record face difficulties in applying certain financial services.” “The unbanked SMEs traditionally trade gold as a wealth management strategy,” added Andy Li, CEO of Silot, a Singapore-based fintech company.

However, our speakers believe that this situation is changing rapidly with the growing adoption of digital banking, the proliferation of mobile devices and affordable internet, reducing the cost of customer services. “This poses a huge opportunity for fintech companies to serve the up and rising startups and SMEs,” said Chua.

AI, data and partnerships

“Due to the high unbanked population in Southeast Asia, there is a lack of digital footprints and historical financial data to support the banks’ decisions,” said Li. While banks are increasingly adopting AI and big data technologies to solve problems and make better decisions, AI-made decisions can’t replace human decisions entirely, but it does improve efficiency,” added Li.

“Half of Thailand’s population doesn’t have a credit history,” said Nakapanant. “Ascent Money addresses this issue through partnerships and adopting analytical technology,” she added, noting that having a partner with a huge customer base allows for past transaction data-sharing, enabling better loan-approval decisions.

“Digital payment penetration rate is on the rise and with the introduction of new technologies, more data can be captured, which will offer better insights into the SMEs,” said Li. “Moving forward, it is easier for small businesses to get financial services from the financial institutions,” he added.

Possible evolution of cross-border payments

Traditional businesses are evolving into digital firms leading to a spillover effect in terms of the challenges faced by financial technology. “Efficient processing time (same-day), FX business transparency, and scalability are the three prominent gaps cross-border payment solutions are trying to bridge,” said Chua. More mergers and acquisitions are anticipated, said Chua, citing the merger between FIS and WorldPay, and FirstData and Fiserve, as recent examples.

While it may seem that a strong player capable of consolidating all e-wallets may be the future, Chua cautioned that overcoming the various countries’ regulatory restrictions is a huge hurdle.

“Foreign workers in Thailand are struggling to send money home as there are very few affordable professional services made available to them,” said Nakapanant. “Identifying users’ pain points and providing the corresponding solution helps lower the cost of technology and improve efficiency,” she added.

Regulators’ support

Li lauded the regulators in Southeast Asia for having the right mindset and embracing innovative fintech solutions to better people’s lives. “Fintech companies should keep abreast of the emerging markets’ regulatory landscapes’ changes,” said Chua. “Regulators are equally paying close attention to new fintech solutions surfacing in the market, especially those which haven’t been regulated previously,” he added.

Chua also emphasized the importance of fintech firms looking to operate in specific markets for the long term to always finely tune their policies in accordance with the regulatory requirements and apply for the relevant license.

Thailand’s National Innovation Agency (NIA) expects the birth of at least one to two unicorns in Thailand with a valuation of $1 billion within the next five years, as reported by Startup Thailand. “But to attain the home-grown unicorn status, Thailand’s tech ecosystem will need strong support from global investors,” said executives representing Thailand’s startup ecosystem, tech media, and corporate venture fund (CVC) at a recent TechNode event.

On stage at ORIGIN Thailand, an event hosted by TechNode Global during the True Digital Park Grand Opening, four industry experts discussed the effort of building Thailand as the next Southeast Asia’s digital hub.

“In recent years, Thailand has witnessed a significant growth in the funding size and the number of local startups getting funded,” said Thanasorn Jaidee, the president of True Digital Park, Thailand’s first and largest startup hub, TechSauce’s Co-founder Oranuch Lerdsuwankij (Mimee), and Poompong Tancharoenphol, Investment Manager at AddVentures by Siam Cement Group. More Thai startups have received funding in 2018 as compared to the year before, with the food tech industry in the lead, as reported by TechSauce.

Startups to win over investors by expanding regionally

“Venture capital investors are flocking into Southeast Asia for a few good reasons,” said Tancharoenphol, “A number of Chinese VCs are increasing their investment in South-east Asia tech start-ups in recent years.”

“A collective effort among government, VCs, media, and corporates, facilitates more opportunities and international growth expansion,” said Jaidee, adding that many Thai startups are planning to expand regionally.

“Startups related to e-commerce, logistic, supply chain, food, and agriculture have huge potential to grow in Thailand,” said Mimee. “Thailand is strong in these industries and we can reach a one billion valuation if we integrate technology vertically,” added Tancharoenphol.

Corporates in Thailand have begun plugging themselves into the startup ecosystem and started diversifying their investments, setting the nation’s investment trend. “The key is bringing corporates and startups together to co-innovate a solution to achieve a win-win situation,” said Lerdsuwankij, noting that it is not as simple as facilitating a POC engagement between corporates and startups.

“In order to reach the unicorn stage, Thai startups need to think beyond Thailand. They need to think of ways to expand regionally (in Southeast Asia) to attract global investors from other regions such as China, India, or even the US to come in (to Thailand) and actually build the unicorn up,” said Tancharoenphol.

Thailand is paving its way to being the digital tech hub in SEA

“From investors’ perspectives, we like to invest in companies that think regionally from day one”, said Tancharoenphol. Southeast Asia, a sub-region of Asia that consists of 11 countries, albeit highly fragmented, is a sizeable market. “Indonesia has the biggest population in this region while Vietnam has the fastest-growing market, each country has its own strength to compete,” said Tancharoenphol, noting that Thailand’s economy is great for startups given its affordable cost of living with a large tech-savvy customer base.

Investing in skills is vital to a country’s economic growth and competitiveness. “Enterprises in Thailand are offering upskilling programs aimed at enhancing the digital competencies of individuals and organizations,” said, Jaidee. “Instead of leaving the educating effort to universities, enterprises are doing their part to meet the changing demands in an era of digital transformation,” he added.

However, Lerdsuwankij said that more could be done to attract and retain foreign corporates in Thailand. Given the strong infrastructure and attractive incentive policies that a neighboring country such as Singapore has in place, Thailand has to work on improving its government policy and offering stronger support for local and international companies. “Streamlining visa applications can be a good head start,” said Jaidee. “Revising government policy by removing hurdles of doing business in Thailand and clearing the way for safe foreign investments can help attract foreign companies,” he added.

Is the current US-China trade war a boon for Thailand?

Emerging Southeast Asian economies are seen, by many, to be the winners from the US-China trade war. However, although our speakers recognize the economic gains shifts due to the political situation, they believe that a strong infrastructure has to be in place in order to truly benefit from it.

“Thailand is essentially located in the Indochina region and has strong supply chain industry, food, and agriculture infrastructures,” said Tancharoenphol. “Southeast Asian companies should position themselves and choose the right country best-suited for their industry in order to actually gain a competitive advantage.” Likewise, Jaidee said that Thailand can be a beneficiary country from the trade war if its infrastructure is optimized with strong support from the Thai Government.

An HBR report shows that half of the Fortune 500 companies have disappeared since the year 2000, either due to bankruptcy, acquisition, or ceased to exist as a result of digital disruption.

“The key in digital transformation is to identify the disruptive threats, and study the characteristics of organizations that have survived the past century,” said Djoann Fal, the CEO of GetLinks, a tech-hiring marketplace, at the ORIGIN Thailand conference by TechNode, held during the True Digital Park Grand Opening on September 19, 2019.

“A phenomena of innovate-or-die has emerged, and it is now a race of who can digitize faster,” said David Zhang, CTO of Eko, during a panel discussion moderated by Chalermyuth Boonma, the Head of Bootcamp and Community at dtac Accelerate.

Innovating through in-house or outsourcing?

“Corporates have to be clear on their long-term strategy and set the right framework as to how they want to collaborate with startups,” said Nattapat Thanesvorakul, the head of strategy and new ventures at corporate innovation accelerator RISE, adding that in-house innovation is the way to go for creating a long-term value within the company. “Corporates should also look beyond their in-house innovation team as some innovations are readily available in the market,” said Thanesvorakul.

However, for corporate’s in-house innovation team to succeed, Zhang emphasized the importance of a ground-up effort. “Encouraging autonomy with employees and at the same time ensuring that they accept responsibility for the work they do,” he added. Zhang also shared that corporates in-house innovation can happen even without a dedicated innovation department.

Fal lauded those product-first startups who focus on developing a great product and generating revenue before raising funds, as an example of how innovation has changed over time. “Corporates can play a part by supporting these product-first startups at the right time which will lead to venture capitalists noticing the value of these startups,” he added.

Staffing, leadership and cultural challenges

Staffing issue has always been an urgent and critical business issue. The need for strong leadership is a perennial challenge. “There is a big leadership skill gap and organizations have to acknowledge this in order to grow and produce great leaders,” said Fal. “Job hoppers are exhibiting strong innovator characteristic with a strong mindset and agility,” emphasizing that employers should not steer clear of job hoppers.

“There are two types of employees, one who optimizes his or her life for risk ownership and the other one who is risk aversion,” said Zhang. “What differentiates a $100K engineer from a $300K engineer is the leadership skill, the ability to take risks and hone the product.”

Thanesvorakul called on organizations to embrace China’s 996 hustling culture (9 am to 9 pm, six days per week), as a push to create more innovations and new inventions.

The future is now

The nature of work has fundamentally changed in the last decade and there is a clear consensus that changes are inevitable and constant. “Companies that understand this and are able to adapt quickly to changing landscape will survive,” said Fal.

“We are living in the age of increasing technological innovation where every industry is getting disrupted and every company will become a technology company in the next 20 years,” said Zhang. “Survival mode is what differentiates corporates from startups, and corporates, regardless of their industries, have to learn how to operate in survival mode,” said Zhang, noting that the first company to fully adapt to technology will dominate the industry.

On September 19, 2019, True Digital Park officially announced its strategic partnership with TechNode as their “Go-To China Partner”.

As strategic partners, TechNode and True Digital Park will collaborate to promote the integration of science and technology innovation between China and Southeast Asia, opening up more opportunities and interactions between the tech startups in both regions. As both parties have a vast network and resources in the technology and innovation industry, this partnership will further enhance the startup ecosystems between China and Southeast Asia.

True Digital Park is the largest digital innovation center with a comprehensive entrepreneurial ecosystem in Southeast Asia. It was officially launched on September 18, 2019, in Bangkok, Thailand, at the first Togetherness of Possibilities (T.O.P) tech conference. The conference attracted many innovative entrepreneurs from all over Asia. Among the honorable guests were Mr. Suphachai Chearavanont, the CEO of Charoen Pokphand Group and the chairman of True Corporation Plc; Dr. Somkid Jatusripitak, the deputy prime minister of Thailand, and Mr. Buddhipongse Punnakanta, the minister of digital economy and society of Thailand.

“The mission of True Digital Park is to help tech startups and entrepreneurs reach their full potential to compete in the global marketplace. At True Digital Park, tech startups will have access to the latest trends and tech knowledge as well as telecommunication infrastructure and digital platforms. On top of that, they will also have the opportunities to receive support from large companies and governmental organizations and network with investors, and hence, gain access to funding,” said Mr. Thanasorn Jaidee, the president of True Digital Park at the launch of True Digital Park.

With a vast network in global innovation and entrepreneurship, China-based TechNode is at the center of a unique worldwide tech ecosystem of startups, venture capital firms, industry resources, and corporate partners. In 2018, TechNode expanded its core offerings to include six business units: TN Media, TN Inno (corporate innovation services), TN Global, TN Events (branding and event services), TN Data (startup ecosystem database) and TN VC (venture capital and financing services). Through these initiatives, TechNode supports and connects the startup ecosystem between China and the rest of the world.

“TechNode will play an important role in supporting the tech startup ecosystem at True Digital Park. The global expansion of China’s innovation is beneficial to the overseas innovation environment and TechNode Global platform is committed to helping bridge that connection between China and the rest of the world, including Southeast Asia,” said Dr. Gang Lu, the founder, and CEO of TechNode.

Immediately after the launch of True Digital Park, Origin Thailand Conference by TechNode and Asia Hardware Battle Bangkok pitch were held at True Digital Park on the following day. The Origin conference brought industry experts from China to discuss food innovation, future of work and Thailand’s digital and tech landscape together with local industry experts in Thailand; while the winner of the Asia Hardware Battle Bangkok will represent Thailand to compete with other teams from Asia at the Asia Hardware Battle Grand Finale in Shanghai this October. Both events are among the few outcomes of this partnership in creating a cross-border platform to connect China with the tech startup ecosystem in Southeast Asia and vice versa.

The 2019 Asia Hardware Battle Bangkok competition was a tough fight but one that’s close to the heart of the country of smiles and agriculture. The battle was organized with support from RISE Accelerator and held at True Digital Park’s newly open Innovation Hub. Both are partners of TechNode and co-organizers of Asia Hardware Battle 2019 Bangkok.

After an intense competition, one hardware startup rose above the rest and will be representing Bangkok at the grand final round of Asia Hardware Battle in Shanghai this October. In this competition, the winning startup was put through a series of stringent evaluation and step-by-step screening by several prominent judges:

– Dr. Jumpot Phuritatkul, Chief Technology Officer at True Digital Park

– Mr. Nattapat Thanesvorakul, Head of Strategy and New Ventures at RISE

– Dr. Marong Phadoongsidhi, Assistant Professor at King Mongkut’s University of Technology Thonburi

– Mr. Parin Songpracha, Chief Executive at Nasket International (Hong Kong)

– Mr. Lock Fan, Head of TechNode Venture Capital

Winner: SystemStone

Vibro is SystemStone’s cutting-edge IoT innovation with an ultra-sensitive vibration sensor and AI capability. The unique design predicts machine failure before it happens and sends a notification to the maintenance engineer’s smartphone. It is an advanced machine maintenance hardware-tech using mobile technology and industrial IoT.  It reduces more than half of the spare parts cost and workforce of a factory.

Other participating startups:

Maker Playground is an open-source end-to-end platform for IoT and embedded development. Maker Playground purposes a behavioral-based programming method using a graphical diagram where code can be automatically generated and programmed into an actual hardware board and an interactive experiment mode where user can control and interface with the actual hardware and monitor the results in real-time without the traditional compile and verify cycle.

DRVR connects IoT Devices to the CAN bus of the vehicles, extract the data and transform it into actionable knowledge. DRVR combines hardware and software to develop a unique gamified platform for both dealers and carmakers.

Easy Rice was invented to take advantage of artificial intelligence and mechanical machinery to revolutionize the agriculture industry – specifically rice harvesting. It helps to solve and innovate the way rice is examined.

Xentrack is an indoor location tracking, temperature monitoring IoT solution targeted at hospitals or medical facilities. Xentrack does real-time location tracking for assets or people and is able to notify users via line, SMS or email.

Supporting Partners for AHB 2019

Next Stop – Singapore Pitch on Oct 1

We would like to extend a big thanks to all participants, judges, and partner organizers. We couldn’t have had such a successful outcome without the help of RISE Accelerator & True Digital Park for their great support. SystemStone is getting ready to battle it out at the Grand Finals in Shanghai.

On September 19, TechNode gathered four industry experts at its ORIGIN Thailand conference, held during the True Digital Park Grand Opening 2019 to discuss “Food For Thought: Innovation in Food and Agriculture.” Thaddeus Koh, the co-founder of tech media outlet e27 and moderator for the panel, began the discussion by asking, “Why do the food and agriculture tech trends matter and how does the changing consumer behavior impact the players in this sector?”

“Food is one important aspect, and I believe this can be a huge technology playing field that can be expanded regionally and localize successfully,” said Dr. John Jiang, the chief digital officer at a Thailand-based conglomerate CP Group. Howard Tang, CTO at SmartAHC, a smart farming startup, said, “Agriculture can be made sustainable with digital nutrition, which is a new way of optimizing farmers’ performance through digitalization by using the same amount of materials to achieve higher productivity.”

However, Jiang noted while agriculture’s increased efficiency brings about valuable impact, the upstream of the food supply chain where the food source stems from, requires a much larger deal of innovation and this is where the business opportunity lies in.  “There are more and more startups focusing on the upstream of the food supply chain and more innovation in farming, agriculture, while alternative proteins began sprouting up in the past two years,” said Pahrada Mameaw Sapprasert, Director of an early-stage venture fund called 500TukTuks.

Serving fresh funds

Startups in the upstream with the majority of them in the deep tech sector, typically take a longer time to achieve commercialization. “Investors will have to widen their portfolios with a combination of upstream and downstream startups,” said Sapprasert. While it seems that downstream startups such as food delivery companies generate higher and faster ROI, Sapprasert encouraged investors to also look into upstream startups which will be emerging as the next big thing, albeit the longer rate of return.

“Fund-raising for food and agritech startups is getting easier these days, as compared to five or six years ago,” said Tang. There is also a climb in corporate venture capital (CVC) in the food and agritech field, he added. “More commodity traders are looking into this area as well, to provide micro-financing to the farmers,” said Tang. Opportunities abound in the micro-financing area with 235 million unbanked adults in the agriculture industry as reported by the World Bank Group.

Thailand is paving way for its homegrown unicorn as support programs are rolling out for startups to accelerate their progress. “The top layers of the upstream, such as insect-protein food source, will face significant disruption and this is where we can expect the birth of a unicorn startup,” said Jiang, while noting that the bottom layers of the downstream can also possibly generate the next unicorn.

Food and agriculture tech ecosystem 

Sapprasert called on Southeast Asia community builders to look to the California market for knowledge and insights on bringing both upstream and downstream players together, in an effort to build a strong FoodTech ecosystem.

Tang lauded the Chinese agriculture players’ grassroot effort, including relevant associations and chambers, sharing agriculture knowledge and business tips over a WeChat group, as an example to bring value to the food and agriculture tech ecosystem.

The role of government and corporates 

In a survey conducted in the United States, people above 40 years old were less likely to try cultured meat (also known as lab meat), as reported by The Conversation. “It is just a matter of time where cultured meat will be the future of food, and education on its safety and health concerns has to begin now,” said Sapprasert. Majority of cultured meat producers are from startup backgrounds, which intrinsically lack credibility and trust from the consumers due to weak track record. “Education and awareness can be built up collaboratively by government bodies and corporates,” she added, noting that consumers are more likely to trust such organizations due to their strong credibility. 

“There is no standards and regulations for IoT technology in food and agriculture tech yet,” noted Tang. The lack of regulations spells uncertainty and risks for IoT developers as there are no guiding rules for the developers. While the ultimate purpose of regulation is to encourage stakeholders to take into account externalities such as security and privacy, Jiang suggested that regulations are not needed for IoT technology in the food and agriculture sector. 

“Corporates are becoming more active in the food and agriculture tech ecosystem with many setting up their own venture arms to invest in startups. Corporates are technology adopters and innovators in applying such technologies”, said Jiang, using the example of CP Group as a corporate supporting food and agriculture startups.

“Thailand, as a country with GDP predominantly in the agricultural sectors, has a huge problem many people are trying to crack,” said Sapprasert. “However, it is highly encouraged to unbundle the existing problems and solve them bits by bits as it is impossible to apply one solution to all problems,” she added. 

“Product localization is key,” said Kevin Hu, the Director of User Growth of Camera360 at TechNode’s ORIGIN Thailand conference, held during True Digital Park Grand Opening on September 19, 2019. 

A BBC report states that an average millennial will take more than 25,000 selfies during their lifetime, revealing a strong desire of the smartphone generation to look attractive online amid the proliferation of social media platforms, which has driven the widespread popularity of photo-editing apps.

“All users are seeking ways to enhance their photos aesthetically. For example, users from China prefer natural and aesthetic filters while users from Southeast Asia prefer sparkly and glittery filters,” said Hu. Camera360 has more than one billion global users and has passed 20 million monthly active users in Thailand.

The generations of photo filters

Hu shared that millennials, aged between 20 to 35 years old, and Generation Z, aged below 18 years old, have differing photo-editing preferences. Gen Z users prefer vapor and electronic filters which exude cool and individualistic style whereas the millennials take a liking to youthful and natural effects. “Users’ aesthetic standards and preferences vary according to age and region,” added Hu.

On data privacy

Earlier on, there was an outburst of miniature panic over what photo-editing and beauty apps are doing with the personal data that they collect, as reported by TechCrunch. Privacy concerns with photo apps are nothing new and there have been reports on photo privacy breaches on social media platforms. 

“As an app developer, we believe protecting users’ data and privacy are equally important to us as they are to users, and we always pay great attention to this area,” emphasized Hu. He added that users’ behavior data collected can be used in an effective manner for product improvisation, resulting in better UI, and better user experience.

When asked how they stand out from many other photo-editing apps, Hu emphasized that continuous innovation is key. “Having an efficient monetization strategy is of paramount importance, especially for such a free app that has invested heavily in R&D innovation to better serve huge user base,” added Dr. Gang Lu, Founder & CEO of TechNode.

Free app monetization 

There are two ways of free app monetization: in-app advertising (IAA) and in-app purchase (IAP). The former involves performance advertising and branding advertising. “It is very important to work with local brand marketing agencies to enable localization of the brand content”, said Hu. As for IAP, Hu suggested offering an in-app subscription to convert regular users to VIP members. This will give users the privilege to unlock all (or most) of a product’s features and ads-free option. “Developing these premium features for VIP members can help increase product revenue through meeting users’ needs,” said Hu.

In conclusion, Hu said that performance branding, performance advertising, branding advertising, and subscription business model will continue to grow in popularity. In order to standardize products and commercialize them in different countries, app developers should focus on localizing itself to better create user values and creating useful features that cater to local consumers’ needs. 

Philippine president Rodrigo Duterte defended a deal allowing a Chinese state-backed telecommunications company to construct and manage communications towers on bases belonging to the military in a statement to journalists on Wednesday.

Why it matters: In stark contrast to the US-led campaign cautioning against China’s involvement in the construction of 5G networks worldwide, President Duterte rejected claims that China Telecom could use its position to spy on the Philippines military.

Details: The Armed Forces of the Philippines (AFP) signed a relevant memorandum of understanding last week with Dito Telecommunications, a consortium led by domestic conglomerate Udenna Corporation and China Telecom. The deal would allow Dito Telecommunications, previously known as Mislatel, to install bases and relay towers on military bases. The AFP has similar deals with two homegrown telecom firms, Globe Telecom and PLDT-Smart, the AFP told local media.

• The memorandum is still awaiting approval from the Philippine Defense Secretary Delfin Lorenzana, who was traveling abroad when the agreement was struck and reportedly not informed about it.
• A member of the opposition in the Philippine Senate Risa Hontiveros filed a resolution on Monday to investigate the deal after hearing that the defense secretary was “left in the dark.” Other senators including the Senate president condemned the agreement.
• The AFP chief of staff defended the deal on Monday, saying that the military did not intend to bypass the defense secretary, and that similar colocation agreements exist with local telecom operators.
• Duterte’s office dismissed these fears as “bordering on paranoia,” claiming that the deal was examined by government security experts, the Financial Times reported.

Context: The new consortium was formed as a ploy to break a monopoly held by Globe Telecom and PLDT-Smart, aiming to be the country’s third largest telecom player. Dito Telecommunications is led by Dennis Uy, a known local businessman and reportedly a close friend of Duterte’s, who has no experience in telecom services.

• China Telecom owns 40% of Dito Telecommunications.
• Despite a long-standing alliance with the US, Duterte has pivoted towards China. The two countries cooperate in joint military exercises and counter-terrorism.
• In a state visit to Manila in March, the US Secretary of State Mike Pompeo said that using Huawei equipment in the development of 5G networks poses a risk to national security in the Philippines, and alluded that the deal may cause a shift in its relationship with the US.
• The Duterte government has signed agreements with Huawei for four smart city projects around the Philippines, and is eyeing contracts for surveillance equipment with Chinese partners.

Since the proliferation of selfies, photo editing software has been heavily invested in the face beauty trend. As one of the leading photo editing tools in China, Camera 360 which is available on Android, iOS and WP8 platforms, claims to have over 200 million users worldwide. During an intimate fireside chat session with Camera 360 at ORIGIN Thailand, we will uncover its successful global expansion strategy, and how it stood out from the plethora of photo-editing apps.

As technology rapidly transforms the financial landscape, the future of AI will be inextricably linked with the future of finance. Another big piece of the banking business is also formed by the incredible growth in cross-border payments which is fuelled by globalization. However, close to 75 percent of Southeast Asia’s population remained “unbanked”, and can only be reached through offline methods. This poses an opportunity for FinTech companies, as there is a significant demand amongst the unbanked to obtain basic financial services in an effort to improve their financial situation. Join us as we take a deeper dive into each of these points with our guest speakers from Ascent Money, Airwallex, and Silot.

Last but not least, how is China shaping the future of global tech? Gain insights on China′s road from copycat to trailblazer with TechNode’s CEO, Dr. Lu Gang as he delivers his keynote speech on an overview of the China tech developments.

At ORIGIN Thailand on September 19, 2019, we will dive into emerging ASEAN-China tech trends such as food innovation, corporate innovation, intrapreneurship, Southeast Asia’s digital payment solutions, China’s global influence, and Southeast Asia’s digital hub.

Don’t have a ticket yet? Our conference is free so what are you waiting for? Spread the words and grab your friends along. For more information and ticket applications, visit origin.technode.com.

Behind The Filter: Fireside Chat with Camera360

Building Southeast Asia’s Digital Payment Powerhouse Panelists:

China′s Road From Copycat to Trailblazer

Sitting in a trendy open-plan office in downtown Kuala Lumpur, Anson Wang oversees around 100 employees as CEO and co-founder of Jobstore, a Malaysian AI-powered recruitment platform. Coming from a rare breed of first-generation Chinese immigrant entrepreneurs into the country, it has been a long journey for Wang to get to where he is now.

Born in Hangzhou in eastern China’s Zhejiang province, 39-year-old Wang struck gold when he sold off his ad agency back in his home country. Filled with aspirations of an exotic new market ripe for the picking, he uprooted to Malaysia. His experience in China’s internet industry held him in good stead and his expertise allowed him to make wiser decisions. However, it didn’t translate into instant results in a country geographically close but infinitely different.

Years on and Wang’s thick-accented mandarin is indistinguishable from that of Chinese Malaysians. He bears all the hallmarks of someone who has become immersed deep into a foreign culture. This mindset is key to achieving success in a culture as diversified and a market as fragmented as South East Asia.

In many ways, Wang, now a serial entrepreneur in Malaysia with Jobstore his third project, represents a case in point for Chinese businessmen and companies sitting at the crossroads between China and SEA.

Push and pull

The past three decades have witnessed changing dynamics between China and SEA in terms of economic forces. China’s exponential growth has allowed it to eclipse the neighboring region.

“When our relatives went to China in the 1980s, they’d always come back and say China is like twenty years behind Malaysia,” recalled Honwai Sim, COO of Malaysian IoT firm MDT Innovations and a third-generation Chinese Malaysian whose ancestors moved to SEA in the 1920s. The government’s early efforts to boost high-tech industries helped the country to become one of the world’s largest producers of electric appliances for a period in the 1990s. “But now China is way ahead of Malaysia,” he said.

In recent years, Malaysia and the broader Southeast Asian market are again becoming a focal point, and Chinese investors are circling for new opportunities. The region’s GDP will grow at an average of 5.2% between 2018 and 2022, according to OECD projections. The SEA internet sector is set to be worth $200 billion by 2025.

Nearly all of China’s big tech players from heavyweights like Alibaba and Tencent, to vertical unicorns such as SenseTime, are setting up shop in the region. Chinese venture capital firms are also doubling their bets in the region. Total venture funds across SEA hit $3.4 billion in the first half, more than quadruple that of the year-ago period.

The influx of Chinese companies into the region boils down to push-and-pull factors. A slowing domestic e-economy, saturated local market, aging population, rising workforce costs in China are a powerful set of push factors. These are only exacerbated by China’s recent turbulent relations with the US.

For SEA, the younger population and rising GDP per capita are the key pull factors. Rising internet penetration, in particular, has brought the attention of Chinese internet firms. The region’s internet users are outpacing those in China in their embracing of the mobile economy. A higher percentage in several SEA countries use smartphones to do their banking, shopping and ride-hailing, according to Global Digital Report 2019 from social media management platform Hootsuite and digital marketing agency We Are Social. China’s high-profile Belt and Road Initiative has also boosted the regional expansion of Chinese companies especially in building digital infrastructure.

In addition to the huge potential, the market is also attractive to Chinese entrepreneurs and VCs because they believe the region is similar to China a few years ago. They expect easier market entry by leveraging experiences learned from China. For them, the country represents a key point of reference for SEA expansion.

Caution in copying China

While Chinese voices tend to stress the similarities behind the two ecosystems, the differences between China and SEA are equally huge, if not bigger.

Using the term SEA unconsciously refers to the region as a whole, neglecting its huge diversity covering 11 countries. The region’s population of more than 655 million speak different languages, practice different religions and live under the administration of different governments.

“Even though we look at trends in China, it doesn’t mean things can be 100% replicated here,” Jamaludin Bujang, managing director for Gobi Venture’s Malaysian operations, told TechNode in a recent interview.

Andy Sitt, the co-founder of Inmagine Group, parent of Malaysian stock image site 123RF.com, breaks down the differences by countries. “Singapore is an aging developed country. Malaysia and Thailand are aging and mid-developed, while Laos and Myanmar are young and upcoming,” he said. Some key markets like Indonesia and Vietnam get a lot of attention and it can often be forgotten that the other countries differ greatly in culture, consumer purchasing power and stages of development stages, he added.

“Having 11 countries working together is almost impossible, you can’t have a standardized e-wallet nor the same data-sharing platform among different countries,” Sitt maintained.

MDT Innovations’ Sim echoed Sitt’s pointed out the industry differences in a separate interview. Singapore, with its focus on fintech, is quite advanced because it’s one city and easy to manage, he said, adding that Malaysia is a very small market centered on high-tech, IT, biotech. Compared with the rest of SEA, Indonesia and Thailand are bigger markets while Cambodia and Vietnam are quite far behind.

The tech ecosystem in SEA is also developing at a slower pace compared with that of China. “When coming to a smaller market, you really have to adjust expectations as well, you have to adjust to slower growth,” Bujang said.

Jobstore’s Wang has first-hand experience in adjusting to slower growth. His company grew from two people to a 100-strong team in less than three years. This is already a quick growth trajectory for a Malaysian startup, but nothing compared with Chinese companies, he admitted.

Local workers maintain a more laid-back lifestyle and value a work-life balance, Wang said. While it’s common for Chinese tech employees to work on 996 schedules, it’s unimaginable for locals to work to such an extreme. “Even though I want to push the project forward, I can’t do it singlehandedly without support from the team,” he added.

To cope with this, Wang clarifies with new-hires that his company doesn’t require overtime, but needs their 100% attention during working hours. “Also, we don’t hire people that smoke to avoid distractions during working hours,” he added.

Sitt expects the influx of Chinese firms in the region to press local players to catch up.

Although Chinese venture capitalists are increasingly taking notice of the region, SEA does not have the funds that Chinese companies have, Sitt said. His firm has grown without securing external funding.

“Malaysia hasn’t been attracting lots of investors,” Sim said. “We talk about a Series A in Malaysia as probably about 1 million ringgit ($250,000). Series A in the US is $5 million and Series A size in China s not too far from the US standard at $3 million to 5 million,” he detailed.

SEA as a ‘launchpad’

More and more Chinese companies are aggressively looking for global expansion in the eyes of SEA entrepreneurs.

“Growth in China is slowing down, they are looking at an alternative for what they can do especially in SEA and hopefully to build a greater Asia,” Sitt said. For Sim, Chinese firms are very open to business opportunities in far-flung markets.

The overall region is of strategic importance for expansive Chinese companies, thanks to cheap labor and the diversity of people and culture.

SEA startups have their own criteria for finding Chinese partners. Malaysian AI and IoT company G3 Global inked a deal with SenseTime to set up an AI park earlier this year. “Some companies are here only to find a reseller or partner to distribute their products. We choose to work with  SenseTime because the deal is more about having an experience of using AI in real application scenarios by which we can build an ecosystem and educate the market together,” G3 Global Executive Director Mohammad Radzi told TechNode.

“China might be scary for lots of companies, but for us China is friendly,” said Sim. He maintains that Alibaba isn’t in the region to take away opportunities but to find new ones. “They may have acquired Lazada in e-commerce, but they are also open new opportunities to other e-commerce enablers,” he explained.

Editor’s note: This article is produced in cooperation with AirAsia and Gobi Partners. We believe in transparency in our publishing and monetization model. Read more here.

China-based venture capital Gobi Partners and AirAsia’s cargo and logistics arm Teleport –previously known as RedCargo– announced on July 16 plans to co-invest $10.6 million in the B round of Malaysian e-commerce and parcel delivery platform EasyParcel.

The funding will be used to expand the startup’s offering for small-and-medium-sized enterprise customers in existing markets like Malaysia, Indonesia, Singapore, and Thailand.

While the deal, announced at Gobi Partner’s Malaysian headquarters in Kuala Lumpur, may seem run-of-the-mill, it highlights a recent change in sentiment among Chinese venture capitals, which are attaching greater importance to the SEA market.

Gobi Partners is one of the first Chinese venture capitals to set its sights on SEA. The Shanghai-based investor first set foot in the region in 2008. Growing with a global vision, Gobi Partners manages over $1.1 billion assets and is gradually expanding its scope of investments outside of China to include countries such as Australia, the UK, Britain, Indonesia, Malaysia, Singapore, the US, and Thailand.

It’s no secret that Chinese tech companies are pivoting to the SEA market amid a slowing domestic e-economy, a saturated local market, and more recently, tougher relations with the US. A preference for the market is gaining momentum among Chinese VCs as well. They are following the footsteps of their portfolios in doubling down on SEA expansion.

The shift has become increasingly obvious since the turn of the year. Chinese startups are caught up in a capital shortage with the amount raised plunging by 52% annually to $23.2 billion in the first half of 2019, according to data from consulting firm ChinaVenture. However, their investments in SEA hit $3.4 billion in the first half. Although the overall size is still relatively small when compared with that in China, that’s a nearly four-fold increase from the same period a year ago.

From China to SEA and beyond

With a young population, increasing GDP per capita and rising internet penetration, the ecosystem in SEA is expected to achieve exponential growth, much like what China was experiencing a few years ago. In addition to its huge potential, the market is also attractive to Chinese firms because they expect easier entry to the market by leveraging expertise and know-how learned from China.

“Gobi Partners has been about for 17 years. That in itself is a whole wealth of experience. We operated in China in the first ten years and then expanded to SEA. We are still growing, but with the good and bad things we have gone through in China, we are making wiser investment decisions when investing in SEA,” said Jamaludin Bujang, managing director for Gobi’s Malaysian operations.

In addition, Gobi is spreading to more areas by drawing upon the experiences gathered through SEA expansion. “We are setting up funds in the Middle East as we see the fact that places like Pakistan are perhaps two to four years behind SEA. We are repeating the pattern all over again in other parts of the world,” said Khairul Khairi, partner at Gobi Malaysia,

“We apply the data collected in China to SEA and now we are implementing the evolved data in Pakistan as well. In that sense, hopefully, our pattern recognition is better,” Khairi added.

SEA accelerates

To some extent, SEA is playing catchup by following the development tracks of China — the rise of e-commerce, and associated enablers like payments, supply chain, as well as a series of other infrastructure services like cloud computing. However, an advance look into China’s current situation allows the SEA to fast-forward and possibly leapfrog it, much like the way in which China’s ecosystem has gone when it significantly lagged behind the US.

“Two or three years back in SEA, every investment went into e-commence marketplaces, but now VC 2.0 in SEA is moving towards more e-commerce enablers in the supply chain, mobile payment, etc,” said Khairi.

Some of the most recent tech trends in China are also gaining traction here. Much like the social e-commerce boom led by Taobao merchants, SEA individual and part-time sellers on Facebook, Facebook Live and Instagram, are contributing to half of the total e-commerce volume in the region, Clarence Leong, CEO of EasyParcel points out.

Leong believes the social e-commerce boom put EasyParcel at the right juncture to cash in on the opportunity to empower small merchants by bringing more transparency in pricing, parcel tracking abilities, and different service levels.

“The social commerce merchants are at a disadvantage because they are small in the transaction as an individual business, but as a group, they already take a big chunk of the e-commerce transaction. But they don’t have the bargaining power with the couriers,” said Khairi.

China’s recent shift from consumer-faced to enterprise-targeted services is also already visible in SEA companies, according to Khairi. “We are seeing more SAAS and enterprise-startups coming. For example, fintech is more B2B than B2C now. When we started two years back it was always P2P lending for consumers. Now it is B2C and eventually it will be B2B,” he added.

Localizing with adjustments expected

Even though we look at trends in China, it doesn’t mean things can be 100% replicated here,” Bujang warned. Khairi echoed his point. “It will always require a certain level of customization, and fine-tuning,” he added.

While setting up a local office and hiring a local team are the first steps to building a SEA presence, localization also requires a change in mentality, according to Bujang. “Chinese startups are so used to having a big scale and big market. When coming to a smaller market, you really have to adjust the expectations as well. You have to adjust to slower growth,” he said.

The same applies to VCs. “Chinese VC is used to high valuations. You have to be really careful when entering a smaller market,” Bujang points out.

China’s on-going capital winter is a good lesson for the SEA region. In a strange way, it has helped the SEA VC and startup ecosystem to be realistic and adjust expectations to make more sustainable plans in the long-term, according to Khairi.

SEA is a more complex and fragmented region compared with China and comprises different cultures, traditions, and languages. Unlike China where the market is divided into camps led by tech giants like Alibaba and Tencent, the market has yet to form market dominators that control the whole value chain, thus providing different competition dynamics for startups.

“The market is so fragmented; we are all frenemies. Your so-called competitor in Malaysia might be your friend in Singapore or Indonesia, you just have to be flexible to be able to work with everybody instead of one,” said Khairi.

Chinese companies usually adopt a cash-burning marketing strategy to grab market share, but in SEA, subsidies are very selective, only happening on a small scale in few sectors like ride-hailing, Bujang noted. “The companies are mainly competing through market forces,” he added.

Youtube, Amazon to offer Youku’s “longest Day” Series – Alizila

What happened: Alibaba’s video-streaming platform Youku’s detective thriller series “The Longest Day in Chang’an” will be available overseas via Youtube, Amazon Prime and Rakuten Viki. First debuting on Youku on June 27, the series is available in Chinese, English, and Vietnamese. It will go live in Singapore, Japan, Malaysia, Vietnam, and Brunei on partnering streaming platforms and TV networks throughout the month. Youtube, Amazon, and Rakuten Viki will also offer the program to their paid-subscriber base in the US, Canada, and South America. One could also get views based on payment basis to gain that initial traction.

Why it’s important: Youku has been producing its own high-quality, original content in an effort to differentiate and attract subscribers. The company is setting its sights on global audiences. Youku has distributed more than 50 original productions overseas over the past two years, such as the romantic comedy, “I Hear You,” and detective series “Day and Night,” according to the company. The company has tapped resources across Alibaba’s ecosystem to promote the series, including full-screen advertisements on e-commerce platform Taobao.

On June 21, leaders from the Association of Southeast Asian Nations (ASEAN) met in Bangkok. One large item on the agenda: how to maintain relationships with rivals US and China. Just 2 days before regional leaders met, another, very different, conference was held just a few blocks down.

In its fourth year, TechSauce is the largest tech conference of its kind in Southeast Asia. My second year attending the conference and my second time in Southeast Asia, I found myself discovering firsthand what many had told me before: the region is poised to see its tech industry grow faster than anywhere else in the world.

For many years, entrepreneurs and VCs in China have talked about the opportunities presented by SEA with many saying the region is like China 10 years ago. While we at TechNode don’t cover SEA directly, we have covered the entry of tech giants into the market extensively. That, however, doesn’t quite capture the energy, ambition, and hunger, as well as contradictions, I experienced this year.

Bottom line: Location and history link Southeast Asia equally to China, India, and the West. Now enjoying catch-up growth, the region is both poised for fast development—and gets to start fresh with little infrastructure, or dominant players, set in stone. The region will not follow the same path, or use the same companies, but the way it is like China 10 years ago is that it’s choosing among models that have gone before. So far, we can say Silicon Valley is winning social and search, Chinese-inspired (and funded) local players are winning e-commerce and payments, and transportation—like many other fields—is a local synthesis of both.

By the numbers:

• The OECD predicts the region’s GDP growth will average 5.2% between 2018 and 2022
  • Cambodia, Laos, and Myanmar will grow the fastest
• In 2017, the Southeast Asian internet industry was estimated to be worth $50 billion
  • Expected to be worth $200 billion by 2025
• Singapore has the highest rate of internet use (81%), while Laos has the lowest (22%)

Cultural crossroads: With historical, cultural, political, and economic connections to China, India, and Europe, Southeast Asia is a real meeting point for peoples and cultures. But its history is also one of fragmentation and disunity: Different groups with different cultural backgrounds and religions—Buddhist, Hindu, and Muslim—not only had typical sectarian conflicts, but were also divided amongst European colonizers. However, in 1967, the region came together to form ASEAN.

Turbulent history: Southeast Asia has often been seen somebody else’s chessboard—but it’s the region’s residents who ultimately decide which outsiders stay and which go. First colonized by European powers, then a battleground between Japanese and Allied forces, then a theater for the conflict between communist and capitalist forces, autonomy was hard-won for most states in the region. Even after all that, the region showed steady and strong GDP growth up until 1997 when the Asian financial crisis hit. While GDP growth did rebound, political turmoil ensued as governments transitioned to functioning democracies, territories gained their independence, and the region has had to adjust to a stronger China.

Demographic dividend: Unlike many other parts of the world, including China, Southeast Asia is not looking down the barrel of a grey haired gun. The region looks well positioned to have a strong workforce all the way up until 2030. 68% of the current population will be working age in 2025. As manufacturing moves away from China, many SEA countries are trying to shift their economies to emphasize industry.

As the population becomes better educated, more urban, and more affluent, demand for better (convenient, safe, high quality) products and services increases. In China, the mobile internet filled gaps in the offline world by providing affordable solutions to consumers’ pain points. Local players are applying this lesson to regionally specific pain points like banking.

Fragmented market: Unlike China 10 years ago, Southeast Asia is not a single country nor a single market. Broadly divisible between mainland and islands, the region has 11 distinct and independent countries. While ASEAN has done a great deal to standardize import/export policies, that hasn’t changed the fact that different regulatory regimes exist in countries with uneven development

A choice between two models: The Trump administration would like us to believe that we have to choose between a Cisco world and a Huawei world. This may be true places where market dominance or regulation keep one side out of the race, but in Southeast Asia, giants from around the world compete with local players as people vote with their attention. Facebook, WhatsApp, and Instagram have a place on people’s phones alongside Line (South Korea), WeChat (China), and Grab (Singapore). Southeast Asia does not carry the legacy of xenophobia seen in the West nor are their choices limited to only local players as in China. Instead, the tech industry is a reflection of the regions unique history, mix of cultures, and geographic positioning.

First move, US: More global in DNA, US tech champions Google and Facebook are the top choices for most users in their respective verticals. No one does search better than Google (sorry Baidu) and Facebook provides an easy way to get and stay connected. Instagram, with its visual appeal, has also done quite well, with many using it to supplement their activity on other platforms. Meanwhile, no one cares about WeChat.

Still room for China: In China, many expect easy victories in SEA due to similar culture—indeed, the Chinese diaspora, both ancient and contemporary, exert significant influence—but this hasn’t translated into large scale adoption of consumer solutions outside of payments and e-commerce. Both WeChat and Alipay are available as payment options in more and more places, but still haven’t seen wide-scale adoption outside of global businesses with an existing relationship (e.g., 7-11) or ones catering to Chinese tourists.

A local twist: Chinese players have done best as models—and funders—rather than  competitors. “Copy to SEA,” often with Chinese backing, has created success stories, especially in O2O services like ride hailing and food delivery (Grab and Gojek, emulating the Didi/Kuaidi rivalry) while e-commerce is starting to take off, following a very China model.

While China’s out of the game in social, it’s got a healthy influence in transportation; hina-backed and -influenced apps dominate e-commerce and delivery. Alibaba has invested heavily in both Lazada (Singapore) and Tokopedia (Indonesia). Tencent is backing Lazada rival, Shopee. Both giants have, instead of trying to expand their brand and operations into the region, have invested in companies that started locally. JD and Amazon have taken an opposite approach, expanding with their brand and trying to hire locally. They, however, not only entered the game late but also don’t seem to be having much success, with JD even scaling back their presence.

Looking forward: The region is poised for rapid development and change, especially in the tech industry. Given uneven economic situations in the various countries, however, that development and change will vary. Singapore, while affluent and influential in the financial sector, is already a mature market. Indonesia, on the other hand, is one of the biggest markets in the region and still has lots of room to develop. While TechNode doesn’t have any plans to cover Southeast Asia directly, we will definitely be keeping the region on our radar.

Go further

• A Short History of South East Asia
• Investing in Southeast Asia: What’s Behind the Boom
• ASEAN Investment Report 2018
• Economic Outlook for Southeast Asia, China and India 2018
• From supermarkets to super apps, Southeast Asian tech start-ups are looking to China not Silicon Valley
• The Biggest E-commerce Websites and Apps in Southeast Asia
• This “dividend” will drive growth in ASEAN for years to come

Malaysia’s sovereign wealth fund appoints SenseTime founder to board as it seeks to expand tech investments – South China Morning Post

What happened: Khazanah Nasional, Malaysia’s sovereign wealth fund, has appointed the founder of artificial intelligence (AI) startup Sensetime as a board member to advise on tech investments. Tang Xiao’ou will advise on AI-related matters, marking the first time a foreign national has been appointed to such a position. Meanwhile, Lau Seng Yee, a Malaysian citizen and executive at Tencent, has also been appointed.

Why it’s important: Malaysia has shown increasing interest in Chinese technology, and Sensetime serves as a poster child of China’s tech development. Malaysian Prime Minister Mahathir Mohamad has previously visited the AI firm’s Beijing headquarters, and taken tours of both Alibaba’s and automaker Geely’s campuses during visits to China. Notably, the 93-year-old leader showed his support for telecommunications giant Huawei, saying that Malaysia would use its equipment “as much as possible” despite the Chinese company finding itself at the center of international scrutiny.

In a recent survey conducted by Singapore-based halal travel platform Have Halal Will Travel (HHWT), China emerged as the third most popular holiday destination for Muslim traveler around the world, behind Japan and Korea. But not all Chinese cities are ready to accommodate the needs of Muslim travelers, said executives at two Muslim-focused travel platforms at a recent TechNode event.

Travel expectations are rising among young Muslims, said Faeez Fadhlillah, CEO of Malaysia-based Muslim travel platform Tripfez, and HHWT co-founder Mikhail Melvin Goh. As the number of young, educated and mobile Muslims—and their income—grows, they have become the fastest-growing segment in the global travel industry. 

On stage at ORIGIN, an event hosted by TechNode Global at Malaysia Tech Week 2019, the two travel experts spoke about the growth of the industry. Both Faeez and Goh believe that China will continue to be a popular destination for Muslim travelers.

‘What I want must be fulfilled’

Rising incomes and access to information about travel on social media have created a lucrative halal tourism market. Goh said that the vibrant budget airlines industry has also spurred the growth of halal travel.

The mindset has shifted, said Fadhlillah: from “what is available to me?” to “what I want must be fulfilled.”. Brands are taking notice of the increase in Muslim travelers and making efforts to better serve them.

Fadhlillah said that tourists expect the comforts of home even when traveling, giving the example of Muslim travelers in Korea eating local food secure that it’s halal-certified. Muslim travelers are also increasingly searching for a sense of meaning when traveling,  Faeez said.

“There is a rise in solo Muslim travelers and all-girls trips, and this could mean that they feel safer traveling now,” added Goh.

“Communication is key. Hotels, dining places, and tourist hotspots should work on improving its communication more efficiently to eliminate the fear and knowledge gap Muslim travelers might have about the destination,” said Goh

Stakeholders are anchoring different positions within the value chain in the regular travel industry, said Goh. “Down to the infrastructure level, we see many problems with the supply side where there is no fixed position and it requires players to anchor these positions before the value chain can be more efficient,” he added.

What’s Halal?

The Muslim travel industry is fragmented across cultures, said Fadhlillah. One major challenge, he said, is that there’s no single halal standard or definition—one is free to experiment and play around. 

Malaysians, Faeez said, are generally very strict with their definition of halal, and are often surprised to learn that there are other definitions outside of Malaysia. A halal-certified restaurant in Korea could serve alcohol as long as it doesn’t offer pork, he said.

Goh said that as much as brands are excited to serve this group of Muslim travelers, it starts to get confusing for them as there are many different halal standards, creating operational difficulties.

Signs indicate that Southeast Asia is becoming a hotbed for growth among startups and opportunities are plentiful in the region, Kenneth Tan, Vice-president of Gobi Partners, told a packed house at TechNode’s ORIGIN conference, held during Malaysia Tech Week 2019.

“A lot of startups in Southeast Asia are growing positively and this is very encouraging because it shows that the whole ecosystem is progressing,” he said during a panel discussion moderated by Navin Danapal, the SEA Director of accelerator venture capital SOSV.

As Southeast Asia’s digital economy is forecasted to triple in size to reach RMB 1.2 trillion ($240 billion) by 2025, according to TechCrunch, it has become a highly scrutinised and favoured region among both investors and businesses considering expansions. The panel discussion took off with a focus on the tech landscape synergies between China and SEA.

Chinese boom

“Firstly, there is a need to understand the reason why companies in China will consider SEA,” said Tan, adding that the situation is very much like that of China many years ago. With a young population, increasing GDP per capita and rising internet penetration rate, this region is very attractive, said Tan.

However, for Chinese companies that are planning to expand their operations down south, Tan emphasized the importance of localization and a change of mentality towards running a business in this region.

“SEA has ten countries, each with different policies and regulations and are at different market stages,” said Tan. He stresses that due to these differences, it is vital for foreign companies to pay ample attention to understanding the local market that they intend to expand into –  i.e user behaviour and income levels across different markets. Tan also shared that companies must understand that strategies that have worked back home may not work in SEA.

Key to SEA Success  

“At the end of the day, it is all about how much effort and energy you put into listening and understanding the consumer’s problem statement,” said Sai Kit Ng, Chief Executive of multi-stage technology and venture capital firm Captii Ventures. Emphasising the importance of understanding the needs of the market, Ng advises companies to always analyse the problem statement and be prepared to redesign their product to suit the customers. “Focus on the customers who are willing to pay you, this will provide you with a lot more opportunities to improve,” said Ng.

However, Ng also encourages businesses to look beyond the ASEAN market at times because through his observations, he realised that businesses from the region do produce solutions that attract a significant amount of consumers in other countries such as the US.

Ultimately, Ng encourages founders to strive to improve and to benchmark themselves against industry giants.

Local focus needed for startups

“The speed of growth of the markets, the capital investment in this region, the pace of business and the number of startups are all growing tremendously,” said Tan. However, Ng also shared an ironic observation with our audience that local startups find it easier to sell their product to a foreign market than to their own. Hence, Ng urges firms to give more opportunities to local players for them to prove themselves.

Ng shares that trends are often set in China and the US. Currently, he says, artificial intelligence is on top. “I think what is next will depend on who is able to come in and identify the key problems in the different markets and solve them,” he said.

“The short answer is the industries that the unicorns are in,” said Tan. He elaborates that given the rigour needed to start a business, for them to be able to reach the unicorn or even decacorn stage, it would signal good business operations, strong potential, market opportunities in the region and ultimately exit opportunity for investors to make money.

Myanmar entrepreneur buys unused bicycles for poor children – Bangkok Post

What happened: Lesswalk, a nonprofit initiative launched by Myanmar-based tech entrepreneur Mike Than Tun Win, has bought 10,000 unused rental bikes left over from shuttered bike rental businesses including Obike, Ofo, and Mobike from Singapore and Malaysia. Lesswalk donates the bikes to school kids in Myanmar, many of whom lack transportation to and from school. Sponsors of the initiative paid for around half of the estimated $400,000 needed to buy, ship, and refurbish the bikes. Lesswalk covered the balance of the cost.

Why it’s important: As China’s bike rental boom cools, vast piles of abandoned bikes have become a familiar sight in many big cities in China and overseas. Bike rental operators, once hailed as environment-friendly businesses, face increasing criticism for wastefulness. The discarded bikes, some of which are unused, have been languishing due to high retrieval costs. Many bike rental firms are too cash strapped to solve the issue themselves.

Online retailers in Southeast Asia need to focus efforts on meeting the demands of their target markets as regional consumers are becoming increasingly sophisticated, Sharmeen Looi, Co-founder at cashback reward program ShopBack Malaysia, told the audience at TechNode’s ORIGIN conference, held during Malaysia Tech Week 2019.

Finding the correct product-market fit and identifying gaps in the market are crucial factors for any e-commerce and marketplace players with an eye on grabbing a slice of the pie, according to Aaliyah Soraya, General Manager at one-stop online sales solutions provider Commerce.Asia Enterprise, and Kenneth Kuan, Sales Director at Malaysian fintech firm Kiple. The pair joined Looi for a panel discussion on the challenges and opportunities that come with the growth of Malaysia’s e-commerce sector. 

With a population of 32.25 million and more than 25 million internet users, Malaysia represents an attractive proposition for e-commerce companies based in Southeast Asia. Global, regional and domestic players are already focusing efforts on occupying the lion’s share of the market.

Consumers these days are getting smarter and savvy, employing the best tools when it comes to online shopping, said Looi, adding that the influx of foreign players will not only provide a boost for the market but also enable consumers to become even more sophisticated when dealing with digital transactions.

Marketplaces are becoming more specialized, focusing on specific target markets in line with their data accrued over time. “Marketplaces will gradually skew towards targeted segments and target consumer behaviour,” said Kuan, noting that their success is dependent on strong data analytics and a specific vertical focus.

“Think twice if you do not have the money or investment,” Soraya warned those setting up marketplaces to compete against the big players. One could consider acting as an enabler or partner for the marketplace instead, she added.

Logistics as the backbone

In terms of deficiencies in Malaysia’s e-commerce infrastructure, the speakers said that more could be done in terms of data crunching, integrated solutions between players, and last mile fulfilments.

Southeast Asia’s last mile fulfilments lag behind China, Kuan said, describing how an express parcel delivery in SEA takes around one day while it can be completed in a matter of hours in China. 

“SEA logistic companies or marketplaces can consider localizing or regionalizing warehousing solutions to reduce costs and improve last mile fulfilments,” said Kuan, adding that this will, in turn, reduce the cost of adoption for customers.

Building talent pools

Demand for e-commerce talent will remain high as companies face strong competition in the industry. Seeking out such talents through recruitment advertisement, peer recommendations and networking are some viable hiring methods, according to Looi, while building a solid culture within the company is key to retention.

Industry-academia collaboration serves as a pipeline for talent too. From the employer’s standpoint, an internship offers the opportunity to trial young talent within a business and identify potential areas where they can add value. Kuan noted that it’s also a great platform to see if they are a good fit for a company’s values and culture without the need to commit immediately to a full-time position. 

Investing in e-wallets

Despite the presence of a large range of e-wallet operators in Malaysia with some 48 licensed products as of May, the majority are actually loss-making with a handful of players dominating the field.

Going cashless will benefit both consumers and business owners in the long run though consumers are only likely to use one payment system for their daily lives, Looi said using the example of WeChat as a super app in China. The one prominent player will aim to manifest itself in as many aspects of daily life as possible, she added.

Understanding one’s target market is of paramount importance to the success and adoption rate of an e-wallet solution, said Soraya, adding that it doesn’t make any business sense to jump on the e-wallet bandwagon if your targeted consumers fall within the typically not-so-tech-savvy silver economy.

One upside of e-wallets is the effective use of data collected to better support operational efficiencies and customer outreach, Kuan said. Leveraging the data can help drive new and improvised products and services, he added. 

Malaysia is lagging behind regional peers in AI adoption, said Mohammad Radzi, executive director of G3 Global, during a Fireside Chat at ORIGIN, held during Malaysia Tech Week 2019. He said that the country should learn from China’s leapfrog success in the field.

Chinese AI company SenseTime is ramping up efforts to expand overseas presence with its latest deal to help build Malaysia’s first AI research park in a partnership with local AI company G3 Global. The park will also include an exhibition zone in which visitors can see AI in action.

“AI is burgeoning in Malaysia so we choose a partner who not only can grow local companies but at the same time spur AI innovation within Malaysia” said Radzi. This partnership aims to bring together and build an AI ecosystem in Malaysia. The AI park also plans to be an export centre, where Malaysian AI solutions can be exported to other countries, said Radzi.

“The AI park will be an area where visitors, not just industry professionals, can visit to experience AI solutions first hand,” said Radzi, describing a park where autonomous vehicles operate on the road and visitors can check into a condominium equipped with smart home system.

This partnership also plans to help build the country’s AI capability through an education curriculum, he said, noting that SenseTime has designed and developed an AI syllabus that is currently taught in schools across China.

Educating enterprises in Malaysia

Malaysia is trailing behind neighbouring countries in Southeast Asia on AI adoption. One contributing factor could be an AI knowledge gap among Malaysian enterprises,  Radzi said. “More could be done to educate enterprises on the potential of AI, such as improving productivity and increasing revenue generation,” said Radzi.

Size counts

China is huge, and when a proof-of-concept (POC) trial takes place, it is typically carried out on a large scale. “In contrast, kicking off a POC trial in Malaysia requires levels of authority clearance, and POC trial areas are just a fraction of what it’s like in China,” said Radzi.

AI works best if given large amounts of data sets, coupled with fast, iterative processing and intelligent algorithms. “China is able to advance its AI technologies at such a rapid pace due to the enormous amount of data collected through POC trials,” said Radzi.

China’s AI agenda advances as China throws state support behind AI development. According to the 13th Five-Year Plan timeframe (2016-2020), China has ambitions to transform itself into a superpower in science and technology. “It is great that the Chinese government is involved and actively spurring innovation within China. This could be the reason why China is advancing so rapidly in the AI race,” said Radzi.

Authenticity is the key to success on short video platforms, Kuaishou’s Maggie Long told the audience at TechNode’s ORIGINs conference, held during Malaysia Tech Week 2019. Short videos are emerging as the cutting edge of marketing as TechCrunch reports that users spend a shocking total of nearly 600 million hours per day watching short-form videos on their mobile devices in April 2019.

“Short video is a growing phenomenon in China and it is slowly spreading across the world. It is definitely not just a new wave of marketing for those in China, but it is applicable for all,” said Maggie Long, director of Global Public Relations & Communications of short video platform Kuaishou Technology. Kuaishou passed 200 million daily active users in May.

Long spoke at a fireside chat on short videos, grassroots influencers, and their impact on businesses with Daryl Chung, projector director of tech media outlet e27. 

The short video boom

Long said that the growth of short video is driven by the development of China’s technology infrastructure, which allows easy access to strong 4G or wifi networks; the simplicity of short video applications; and the format’s openness to everyone from the countryside to China’s biggest cities.

“Everyone’s lives can be seen and will be seen by everyone in the world. It creates a nation-wide community,” said Long.

A mine for businesses

Long said that short video platforms are an undiscovered mine for businesses. Short video platforms, she said, are equipped to help businesses in identifying their target audience quickly. This would benefit marketers as it would help them to craft their campaign to have a greater and more effective reach, added Chung.

Long added that short video platforms are a good way to reach consumers for both the business-to-business or business-to-consumer sectors.

“The key to capturing user’s attention would be the authenticity of the video and the uniqueness of the content,” said Long. She advises businesses not to do advertisements directly ion a short video feature, suggesting that they first create educational content to accumulate a strong, stable fanbase before marketing their product. “The conversion rate tends to be higher,” said Long.

Grassroot influencers

Long said that her platform’s stars are ordinary people—the sort of people many in first and second-tier cities see as losers. “They used to be commoners,” said Long. 

Geng Shuai, who’s known for short videos of unique and interesting inventions, has gained the attention of 3 million people and earns more than RMB 10,000 (about $1,450) a month solely through live streaming, Long told TechNode. 

Long also said that short videos help Chinese people find safe food: people follow and reach out to content creators who film the rearing process of their animals to buy meat.

How to do it

1.       Have a clear branding position

Long advises would-be short video stars to stick to a common theme. This allows the platform’s algorithms to better promote and distribute the content to relevant viewers. If streamers change the theme of their content every day, Long said, it confuses the algorithm, causing it to be unable to effectively promote the videos.

1.       Produce real and authentic content

Long said that users of short-video platforms are looking for videos that are truly authentic. “Videos that are not so professionally produced tend to fare better, as they have an element that makes them more relatable to viewers,” said Long.

1.       Engage closely with your followers

Long emphasised that interaction with the followers is crucial—it helps users develop a sense of trust in the content creator. This is crucial for business owners hoping to market products. “Once trust is established, people will be more likely to buy the product from you,” said Long.

Wrapping up, Chung said that this new form of marketing requires businesses to take on a new mindset. It is important for business owners and startups to realise that it is about making an impact and scaling their business along the way. Making money and new interesting products, he said, should not be the business’s only focus.

TechNode gathered four industry experts at its ORIGIN conference, during Malaysia Tech Week 2019, for a discussion on “Payment Solutions in Southeast Asia.” Kenneth Ho, CEO of the cross-border business matching engine Beam and moderator for the panel, began the talk by asking, “What is the landscape like for mobile payments in Southeast Asia (SEA)? Who do you think is going to be the dominant player? And will Grab simply kick everyone’s ass?”

“Every country has at least 30 to 40 e-wallets. Competition is definitely going to be high in Southeast Asia because of the low barriers of entry,” said Jeremy Wong, head of partnership at e-commerce company Fave. Aiza Azreen Ahmad, director of strategic partnership at lifestyle e-wallet company Boost, said, “For Malaysians today, I’m sure your phones would easily have three e-wallets.”

However, Ahmad said that adoption rates of cashless payment among both merchants and consumers are worryingly low. Given the competition and adoption rate in SEA, digital payment solutions are still a work in progress. Mobile payments in the region are only just starting to take off despite the growing number of players, said Patrick Ngan, CEO & co-founder of mobile payment technology service QFPay. The region is barely scratching the surface of the regional market, he added.

Ngan said that the key to surviving in the region is to establish strong partnerships with the existing dominant players. “Mobile payment eventually should not be restricted to Southeast Asia. Instead, companies should all aim to transcend their own borders to truly succeed. Mobile solutions should be borderless,” said Ngan.

While it seems that QR code payment may be the future, Wong cautioned that it is not necessarily suitable for all countries in the region.

Regulatory Obstacles

Regulations have not kept up with the adoption of e-wallets in the region due to their relatively recent emergence, Wong said. “The regulations around e-wallets need to be loosened for them to see greater adoption among merchants and consumers,” said Ahmad.

Ngan also emphasized the importance of securing government approvals as they play a major role in pushing the initiative and facilitating adoption.

Lessons from China

Ngan called on local players to look to the Chinese market for knowledge and insights without aiming to directly replicate their models. Although the technology behind mobile payment and e-wallets may be the same, he said, differences between the SEA and Chinese cultures and markets mean that companies cannot simply transplant their strategies. Rather, there is a need to localize the system to meet market demands.

Ahmad lauded the bravery of Chinese players, citing Alipay’s recent investment in Touch and Go as an example of the risks that China companies are willing to take.

Major players loom

China’s digital payment operators represent industry titans—and their looming presence in Southeast Asia casts a shadow over local firms. However, although our speakers recognized their presence as a threat, they did not overstate the potential competition from international players.

“Competition can help us to educate the users, and we welcome that,” said Ahmad. “When Boost first started, we were struggling but with greater competition, our company began growing.” Likewise, Ngan said that focusing on this aspect would generate unnecessary worries.

“I often tell my team to forget about the competition and do what you do best. Focus on what you are asked to do and focus on developing the product. If you do a very good job in both, people will naturally use your product because it is well developed,” said Ngan.

Wong encouraged SEA digital payment companies to take heart, saying that the war is not lost just because Chinese companies are pouring investments into the region. Rather, he said, the key in the region is to understand the wants and needs of local users and merchants.

A slew of Chinese fintech and peer-to-peer (P2P) lending platforms are looking to more lenient markets in Southeast Asia (SEA), following a prolonged industry crackdown in China that has left the sector reeling.

Over the past year, China’s regulatory clampdown on risky financial practices has wiped out more than half of the country’s P2P lending platforms. As of May, just 900 survived, down from almost 1,900 recorded a year ago.

Many surviving platforms have decided to cut their losses and exit the space rather than attempt to comply with increasingly strict oversight. Some, however, have decided to explore neighboring markets including India, Indonesia, and Vietnam, looking for their next cash cow.

Southeast Asia is home to credit-hungry consumers who are typically left underserved as a result of limited access to loans and regulations that lack clarity. These conditions provide both an opportunity and a challenge to Chinese firms hoping to do business in the region.

“China’s P2P lending industry has gotten much more strictly regulated,” Johan Uddman, fintech consulting partner at Shanghai-based think tank Den Digitala Draken, told TechNode. For Chinese P2P lending platforms, it makes sense to look at markets where growth is just starting to take off, bringing their technology, know-how, and capital.

Expanding abroad

In early June, Indian daily newspaper the Economic Times reported that Chinese fintech companies, including WeShare, 9F Group, and CashBUS, are exploring investment opportunities in the country’s burgeoning online lending sector, particularly in the P2P lending space.

The Indian market, like China, is credit-starved, said Bhuvan Rustagi, co-founder & chief operating officer of Delhi-based P2P lending platform Lendbox. The country also has a largely untapped retail investor base, from which lenders could potentially pool their funds.

“These are opportunities in which any Chinese player that already has experience in handling high volume and a high growth market can take advantage of,” Rustagi said.

The rise P2P lending in Southeast Asia bears resemblance to the same surge that took place in China starting in 2011. A fast-growing economy coupled with a rapidly expanding tech-savvy user base accelerated fintech adoption in these markets.

Meanwhile, a lack of access to formal financial services has necessitated the rise of informal lending platforms.

India matched China in fintech adoption in 2019, reaching 87% and surpassing the global average of 64%, according to Ernst & Young’s Global Fintech Adoption Index. The report’s findings were based on a survey involving digitally active consumers and enterprise fintech users around the world.

There are some companies from China interested in investing in Indian lending platforms or setting up their own platforms that choose to stay put at the moment because the market is still young, and they rather wait for more regulatory clarity in the space, said Rustagi.

Chinese companies are currently entering the Indian market through acquisitions rather than setting up their own operations. However, Rustagi said he has noticed increasing communication between Chinese companies and P2P lenders in India on investment, joint ventures, and acquisition opportunities.

Nascent markets like India for Chinese P2P lenders may seem like a new haven where opportunities abound, but potential hurdles abound in the Indian market.

The country’s P2P lending regulations are “more proactive than reactive” compared to China, Rustagi said. The Reserve Bank of India, the country’s central bank, is reasonably receptive to stakeholders’ feedback, although it has taken a more conservative approach towards P2P lending, he added.

There are other issues as well. For example, most consumers in India lack sufficient credit information like their counterparts in China, so new players entering the market will have to devise some “unconventional ways” to conduct risk assessments on borrowers, said Rustagi.

What’s happening in India is also happening in other Southeast Asian countries. In Indonesia, there has been a noticeable increase in the number of Chinese lending platforms, alarming the country’s regulators.

Many business practices that Chinese companies have adopted are deemed to be “moral hazards,” said Benedicto Haryono, CEO and co-founder of P2P lending platform KoinWorks.

For example, some of the data mining and data collection methods used by Chinese fintech companies are illegal in Indonesia. Many recently implemented regulations came as a reaction to this, aiming to set straight business practices in the country’s lending space, Haryono said.

The Financial Services Authority of Indonesia (OJK) said last year that had it blocked and warned around 500 websites and mobile applications run by illegal P2P lending services, according to the Nikkei Asian Review. The OJK reportedly received thousands of complaints about the platforms. Grievances ranged from intimidation and sexual harassment during debt collections to violation of data privacy and poor loan payments record keeping.

Indonesian officials said illegal players that come from abroad, including China, are harder to control.

Such a large, untapped market has attracted many platforms hoping to make a quick buck, Haryono said. However, most are underfunded and soon realize making an entrance is not as easy as they thought. Some better-funded early players, like Alibaba-backed fintech firm Akulaku, are thriving in the market, he said.

In Indonesia, a lot of Chinese fintech companies that have set up marketplace lending operations have adopted a balance-sheet lending model, in which lending platforms retain loans on their books, instead of selling to other financial institutions or individual investors at a discount, said Haryono.

Regulators are more lenient towards lenders that take on the financial risk and don’t tap into the public’s money than those that operate P2P platforms.

Signs of trouble?

Similar to India and Indonesia, Vietnam’s online lending sector is on the cusp of taking off. The Vietnamese government was mulling over a decision to legalize P2P lending earlier this year. In March, the government announced that it would soon allow a pilot program for P2P lending before developing a regulatory framework for the sector.

An influx of international players from countries including Singapore and Indonesia is beginning to crowd the Vietnamese market, said Michael Sieburg, partner at Asia-focused consulting firm YCP Solidiance. But interest in the market from Chinese players is piquing, especially following the clampdown that wiped out many platform operators in China.

A report published in April by Chinese state financial news outlet Securities Times alluded to the fact that China’s strict regulatory environment had driven a host of online lenders, cash loans, and fraudulent financial services operators to Vietnam.

Among the existing P2P lending services, roughly a quarter of the forty existing platforms in Vietnam come from China.

The country’s economy is expected to grow at around 6.7% this year, the fastest rate in Southeast Asia. Consumption, fueled by rising income levels, has facilitated the demand for P2P lending and consumer finance, said Sieburg. P2P lending also provides an additional source of financing for small and medium-sized enterprises, he said.

There are risks, of course, as the regulatory frameworks are still in development. Sieburg said that is why the government is trying to tighten regulations, aiming to mitigate the risks while allowing the market to grow.

“Both market players and government regulators will be watchful and wary of players seeking to take advantage of regulatory loopholes in Vietnam, especially from markets that recently experienced notable risky and fraudulent practices,” said Sieburg.

Sieburg said this could impact existing businesses and limit possibilities for new market entrants.

China’s P2P lending market had been growing nearly unregulated for years before the government began its crackdown. As a result, the sector was plagued with fraudulent activities.

What China’s P2P lending market underwent over the past years will likely prove instructive for Vietnam and other emerging markets, said Sieburg. “The government will be keen to proactively rather than reactively increase oversight to prevent fraudulent practices from impacting the market.”

Huawei promises consumers in the Philippines a full refund if Gmail and Facebook won’t work on its devices – South China Morning Post

What happened: Huawei, the world’s second-largest smartphone maker, said it would fully refund the cost of its smartphones and tablets to consumers in the Philippines if its devices are unable to support popular apps such as Gmail, YouTube, Instagram, and Facebook. The refund program will span two years from purchase, local media reported. Huawei declined to reveal if the program would be extended to other overseas markets.

Why it’s important: Huawei CEO Ren Zhengfei has confirmed on Monday that its overseas smartphone sales dropped 40% because of the United States’ persistent crackdown on the company. The company expects its international smartphone sales to fall 40% to 60% for the year. The refund program is an effort to save its smartphone business from declining. But, for the long-term Huawei will have to rely on its self-developed mobile operating system, an alternative to Android which is expected to roll out this fall.

Tencent launches video streaming in Thailand, eyes SE Asia expansion – Reuters

What happened: Tencent launched its first overseas video streaming service in Thailand on June 14, Reuters reported. The service, WeTV, will feature original Chinese content with Thai dubbing from Tencent’s film production and distribution subsidiary, Tencent Penguin Pictures, as well as content created with local partners in Thailand. According to the senior vice president of the subsidiary, the country’s existing user base for Tencent products makes it a good starting point to push into Southeast Asia. Prior to WeTV, Tencent had already launched music-streaming service JOOX and mobile game “PUBG Mobile” in Thailand.

Why it’s important: Tencent posted its slowest revenue growth in Q1 2019 as its Chinese gaming business slowly recovers from regulatory changes. The strategy to expand its businesses overseas could potentially help to offset a slowdown in the China market. Growth for the Chinese version of Tencent’s video streaming service, Tencent Video, has been strong. It recorded a 43% year-on-year increase in subscriptions in the first quarter of 2019, and has more than 89 million subscribers and upwards of 200 million daily active users.

China is leading the world in mobile payment solutions, with FinTech innovations like WeChat Pay and Alipay. This is a testament to how Chinse mobile payment tech is a few years ahead of Southeast Asia. In some ways, the success of payment solutions in China highlights facets of the Chinese market which would be difficult to replicate elsewhere. Having said that, Southeast Asia’s digital payment solution is on a growth trajectory with more players entering this field. This resulted in a highly fragmented payment sector and could be frustrating for consumers. Hear from Boost, QFPay International Ltd, and Fave, as we discuss in-depth the payment solution war in Southeast Asia.

Origin Malaysia

At ORIGIN, we will also be diving into Southeast Asia investment landscape as venture funds are pouring into this region at an unprecedented rate. Hear from Gobi Partners, Captii Ventures, and SOSV as they shed some light on the SEA’s tech landscape through the lens of investors.

In addition, grassroot influencers and short video marketing, an emerging marketing trend widely employed by marketers and brands. As we have witnessed how rapid the Chinese social media landscape changes, what are the trends that will make an impact in 2019/2020? Hear from Kuaishou Technology, who has 200 million daily active users as we unravel the new marketing tide.

Last but not least, how should Southeast Asia think of China, and how do the Chinese think of this region? Gain insights into China with TechNode’s CEO, Dr. Lu Gang as he delivers his keynote speech on an overview of the China tech ecosystem.

Don’t have a ticket yet?

Fret not. We are giving out free passes to TechNode’s community! Gain access to ORIGIN Malaysia Conference and other Malaysia Tech Week’s partner events happening from 19^th – 21^st June. Click here to redeem (may require VPN), terms & conditions apply.

For more information, visit origin.technode.com

About the Panellists:

	Aiza Azreen Ahmad Director of Strategic Partnership, Boost Aiza is currently the Director of Strategic Development, Boost eWallet and a bona fide technophile who believes pivoting Malaysia on digital and innovation can only be achieved through collaborations and partnerships. Her recent success was in creating a cashless ecosystem in the sectors of education, government agencies, SMEs and Smart Cities that made Boost the country’s preferred eWallet. Her other achievements included the launch of a lifestyle app, TouchStyle, the first in the ultra-conservative Islamic banking industry, leading medium to large scale transformation of the largest integrated media group and also, in banks. Aiza has worked in multiple industries which included Islamic Banking, a multi-business conglomerate, integrated media, M&A and management consulting, across two countries, Malaysia and Australia, where she called home for many years. She is currently a candidate for MSc/Ph.D. on the research topic “Technologizing the Supply Chain of Affordable Homes: A Comparative Analysis Between Malaysia And Indonesia” collaborating with the World Bank National Affordable Housing Program (“NAHP”), providing technical advisory support on issues relating to the development of alternative innovative affordable housing that meets the Sustainable Development Goals. Aiza graduated from Macquarie University with Merits in Economics. In her free time, Aiza does pro bono work with mentoring start-ups and participating in causes in support of women empowerment initiatives.
	Patrick Ngan CEO & Co-founder, QFPay International Ltd钱方 Patrick is connecting the world through mobile payment, one country at a time, with QFPay International – a leading mobile payment technology, solution, and service provider backed by premier investors including Sequoia Capital and Matrix Partner; QFPay International has a presence across 13 markets in Asia and the Middle East. With 18 years of experience in cross-border strategy & business development, corporate finance, and capital markets solutions, Patrick is the CEO & Co-Founder of QFPay International Limited. Prior to QFPay, Patrick held senior management positions at global investment banks and international retail conglomerate groups in China, Hong Kong, and the UK; he has also served as Chief Financial Officer and Executive Director of a Hong Kong Main Board-listed company.
	Yeoh Chen Chow Co-Founder, Fave Group  Yeoh Chen Chow is the co-founder of Fave, one of the fastest growing merchant platform in South East Asia. Fave helps to digitize tens of thousands of local businesses, ranging from restaurants, cafes, spas, salons, hotels, services, attractions, etc. Fave acquired 3 of the Groupon subsidiaries in South East Asia — Malaysia, Singapore, and Indonesia. He is also the co-founder of KFit, regional fitness sharing platform in South East Asia. Prior to that, he was the Regional Operations Director for Groupon Asia Pacific, Product Manager for JobStreet.com and Management Consultant for Accenture. He is an Eisenhower Fellow and an alumnus of Cornell University. He is also an angel investor, who has invested in numerous early-stage startups in the region.
	Kenneth Ho (Moderator) CEO, BEAM Kenneth Ho is the founder & CEO of BEAM PTE LTD, a cross-border business search engine focused on matching people to valuable connections and opportunities. A graduate from Monash University who previously exited two businesses (an education and machine learning business), Kenneth has a deep passion for technology, entrepreneurship, and investments.
	Kenneth Tan Vice President, Gobi Partners 戈壁创投  Kenneth started as an Investment Analyst at Gobi’s headquarters in Shanghai. After two years, he was promoted to Associate and relocated to Gobi’s Kuala Lumpur office, where he assisted on investments into companies such as Carsome, Crowdo, Favful, Glints, and Travelio.
	Ng Sai Kit Chief Executive, Captii Ventures Sai Kit is the Chief Executive of Captii Ventures, a venture capital company that he helped set up in late 2014. Captii Ventures is now a multistage investor in technology companies in Southeast Asia with portfolio companies in Malaysia, Singapore, Indonesia, Philippines, and Vietnam. Besides heading venture investment activities, Sai Kit has also been involved in M&A, investments and corporate restructuring activities, as well as leading a digital and mobile advertising business within the Captii Group. He has also held audit, financial advisory and corporate finance roles in PwC, CIMB and other corporations across various industries including manufacturing, property development, financial advisory, food services, utility services, and investment banking. He is a Chartered Accountant of the Malaysian Institute of Accountants and Fellow Member of the Association of Chartered Certified Accountants, UK.
	Navin Danapal (Moderator) SEA Director, MOX, SOSV  Navin is focused on the South-East Asia market entry of MOX, beginning with the two key primary markets of Singapore and Malaysia. He builds partnerships and alliances in the region including governments, telecommunications, universities, and corporations. He helps companies understand the ASEAN landscape and link investors to build better networks. Prior to SOSV, Navin was a senior manager of Microsoft ecosystems in the ASEAN region. Prior to that, he was Editor of Singapore Press Holdings tech media and held a senior role in IDG. Navin has also founded a startup during the 1997 Asian economic crisis, organized a VR hackathon in Beijing with the Chinese government and Coke, and advised a number of Asian aerospace hackathons.
	Maggie Long Director of Global PR & Communications, Kuaishou Technology 快手 Maggie Long is a Senior Researcher at the E-commerce Center of the Kuaishou Research Institute and Director of Global PR & Communications at Kuaishou Technology. On a mission to alleviate poverty and inspire entrepreneurship, the Kuaishou Research Institute investigates how Kuaishou Technology can build and foster e-commerce ecosystems for individuals and small e-commerce businesses operating in China, especially in rural regions. Prior to joining Kuaishou Technology, Maggie got her start in the technology industry as a journalist at Caixin Media and previously worked at Cobo and Cheetah Mobile.
	Daryl Chung Project Director, e27  Daryl is the Project Director at e27, where he oversees all things Echelon – Southeast Asia’s leading business & technology conference – as well as other programs within the company. He is passionate about empowering startups to build and grow their businesses, spearheading strategic partnerships and ecosystem building initiatives with various investor/corporate/government stakeholders across APAC’s tech ecosystem.
	Dr. Lu Gang CEO & Founder, TechNode 动点科技 Dr. Lu Gang is the founder and CEO of TechNode, making him one of China’s most recognized influencers in the global technology sector. What started as Dr. Lu’s personal blog quickly became a highly respected international innovation platform, with six business units including TN Media (Chinese and English technology media platform), TN Inno (corporate innovation services), TN Global (Asia and global business), TN Events (branding and event services), TN Data (startup ecosystem data analysis) and TN VC (venture capital and financing services). Through these initiatives, TechNode connects China’s start-up technology ecosystem with the rest of the world. Today, TechNode is the exclusive China partner of TechCrunch. Dr. Lu earned his Ph.D. in Wireless Communications from the University of Sheffield, UK. Dr. Lu was honored with the ‘1000 Talents Plan’ of Shanghai in 2017 and received the Entrepreneurial Award of the British Council’s Study UK Alumni Awards in 2017-18.

*Malaysia Tech Week is a city-wide festival of events by the industry to bring together the best of Malaysia Corporates, Ecosystem Partners, Investors, Regulators, and Tech startups along with delegations from all around the world to the tech hub of Southeast Asia- Kuala Lumpur, Malaysia.

Chinese e-commerce giant Alibaba is quietly plotting its expansion in Thailand. The company is in negotiation with Thailand’s largest warehouse developer, WHA Corporation, regarding an investment deal for industrial estate land in Chachoengsao, Thai news outlet Bangkok Post wrote in a report that has since been taken down. The investment would be the Alibaba’s second major deal in Thailand in the last two years.

“The talks are about new investment in WHA’s industrial estate land and we expect our logistics business will see more benefits from the deal,” said Jareeporn Jarukornsakul, chairman and chief executive of WHA, as quoted in the article. The company did not further disclose any details about the deal.

The investment will likely help boost Alibaba’s e-commerce reach in Thailand as well as support its other businesses including mobile payment platform Alipay, digital marketing platform Alimama, cloud computing arm Alibaba Cloud, and logistics company China Smart Logistics Network.

An Alibaba spokesman TechNode spoke with denied on Tuesday the news of a second investment, and did not respond to questions about whether the company was currently in talks with WHA.

The Bangkok Post confirmed to TechNode late Tuesday that Jarukornsakul had mentioned a second deal when interviewed by its reporter following a seminar.

Last year, Alibaba agreed to invest 11 billion Thai baht (around $346.2 million) in the government’s Eastern Economic Corridor (EEC) scheme, which includes the construction of a smart digital hub providing technologies to facilitate trade between Thailand and its neighboring countries.

Alibaba’s investment deals in the country have been propelled by the EEC scheme, which aims to draw new investments, including those from Chinese tech giants like Alibaba and Huawei, to revive the region’s slowing economy.

Alibaba has made strides in expanding its e-commerce and logistics business in Thailand, as well as its mobile payment platform Alipay.

Earlier this month, Alipay and the tourism authority of Thailand agreed to roll out two services, credit scoring program Zhima Credit and virtual credit card Huabei, in the country, according to state media outlet Xinhua. On Monday, the two deepened their partnership by signing a letter of intent (LOI) to bring new services that offer privileges and special discounts for Chinese tourists in Thailand. The company said its new payment services will likely be ready to launch in September.

Updated on May 29 to include responses from Alibaba and the Bangkok Post, and on May 31 to add that the Bangkok Post removed its story.

As growth in domestic internet users slows and economic momentum decelerates, China’s technology companies are looking to emerging markets for new opportunities. Chinese tech startups and giants alike are shifting competition to Southeast Asia and India hoping to replicate their home turf successes.

The appeal of the two regions is obvious: they boast large populations and internet user penetration is rapidly growing.

Silicon Valley has already made significant inroads; tech titans including Facebook, Google, and Amazon have already cultivated strong followings for their respective social, search, and e-commerce services. Chinese tech giants such as Alibaba, Tencent, and Bytedance, as well as thousands of startups, are also shifting their sights to the region for growth.

The most critical problem for Chinese companies to expand to overseas markets is how to acclimatize, according to panelists speaking on Thursday at the Emerge by TechNode conference in Shanghai. Southeast Asia consists of 11 countries with different languages and culture, while India is a multi-ethnic country with 22 official languages.

Wendy Min, director of Ctrip International Affairs; Bella Tu, investment director of Gobi Partners; Dev Lewis, research associate of Digital Asia Hub; and Elliott Zaagman, a TechNode contributor discussed strategies for Chinese companies expanding to Southeast Asia and India at the event on Thursday.

“The Indian market is very diversified, unlike the Chinese market which is unified with only one [official] language,” Lewis said to the conference attendees. He added that there were at least five markets divided by different languages in India, including English and Hindi, which are two of the biggest, as well as another four regional languages.

“So it makes it a lot more difficult in terms of the building of products—sometimes we have to use five different teams to build the same products,” said Lewis.

The most knotty problem for Chinese startups that want to expand to overseas markets is how to hire local employees, said Tu of Gobi Partners. It’s common in China for tech companies to require employees to work overtime, spurring the now infamous 996 work schedule, but such work demands are unacceptable in most Southeast Asian countries, she added.

“The best way is to make sure that you find very good local partners so that you can understand local culture and understand how to hire local people,” said Tu.

The 10 markets that make up the Association of Southeast Asian Nations (ASEAN) are home to more than 660 million people. Active internet users in Southeast Asia will reach 480 million by 2020, according to a report by Google and Temasek, a Singaporean state-owned holding company.

India, a country of more than 1.3 billion people, will have 666 million internet users by 2023, up from 525 million in 2018, according to market and consumer data provider Statista.

As China’s digital economy matures, the country’s tech firms increasingly look overseas for growth opportunities. In few places are the stakes higher than in Southeast Asia and India. In Southeast Asia, the internet economy is predicted to expand nearly fourfold by 2025, while India recently reached 500 million internet users, and is expected to have over 800 million by 2022.

However, while opportunities are abundant, competition is fierce. After evolving in the Chinese market, these firms must now do battle with both local upstarts and Silicon Valley titans in unfamiliar territory.

So how are Chinese firms competing in the digital economy’s most sought-after developing markets? What lessons are they learning in these wildly diverse regions, and what are the paths to follow?

On this panel, we will feature journalists and professionals who have been both following and participating in the expansion of Chinese tech firms in India and Southeast Asia, and dive into what the headlines don’t always discuss.

At Emerge, we will dive into emerging China tech trends such as AI, corporate innovation, blockchain, digital marketing, shift to enterprise, the slowing economy, and the expansion to Southeast Asia. See you there!

E-retailer Lazada looks to boost financial services as it takes a page from the books of Alibaba – CNBC

What happened: Alibaba-owned e-commerce company Lazada Group is looking to offer more financial services products to businesses in a bid to gain a competitive edge in Southeast Asia’s online retail market, said Pierre Poignant, CEO of Lazada.

“The next steps are financing, more rewards to our wallets, so we will continue to invest in that direction,” said Poignant. The company will venture into other parts of financing like trade financing across countries, which, according to Poignant, “could be a multi-billion dollar opportunity for Lazada.” The firm is also looking to leverage big data to optimize its business processes such as loan assessment. The company celebrated its seventh anniversary on Tuesday.

Why it’s important: Singapore-based Lazada hosts a platform that allows merchants to sell into Southeast Asian countries including Singapore, Indonesia, Malaysia, Philippines, Thailand, and Vietnam. Lazada’s push into financial services and financing mirrors parent Alibaba, which has become one of the largest financial service providers in China through its fintech arm Ant Financial and payment app Alipay.

Chinese artificial intelligence (AI) company Yitu Technology has opened its first international research & development (R&D) center in Singapore, where it plans to expand its businesses and seek new growth beyond the Chinese market.

The center will focus on providing computer vision and speech processing solutions to enterprises, universities, and research institutes in the region, according to a press release. The Shanghai-based AI company opened its first overseas office in Singapore in January 2018.

Co-founded in 2012 by Zhu Long, an AI researcher who graduated from the University of California, Los Angeles, and Lin Chenxi, a former Alibaba and Microsoft executive, the Chinese AI startup is known for its facial recognition software.

Chinese AI startups are moving abroad with their facial recognition know-how, seeking new revenue streams amid a cooling investment climate in China. Sensetime, the most valuable AI startup in the world, opened an autonomous vehicle testing and R&D facility in the Japanese city of Joso earlier this month. Sensetime has also made moves into Singapore after signing an agreement with National Supercomputing Centre of Singapore, telecommunications company Singtel, and Nanyang Technological University in June last year.

Meanwhile, Megvii has its eyes on South America, following plans to this year “empower various industries” in Brazil with AI.

Yitu began working with Nanyang Polytechnic (NYP) in Singapore in November 2018, developing AI training courses for NYP students, and working with professionals to ready Singapore’s workforce for an AI-driven economy. Prior to this, it partnered with Singaporean state-owned security firm Certis Cisco as one of its first clients in the region. The company used Yitu’s facial recognition solutions to secure access to sensitive areas such as data centers.

Yitu said it intends to triple its overseas headcount to around 100 research fellows over the next three years, as it seeks to customize AI solutions to address specific demands in various markets.

The company came out on top at the Face Recognition Vendor Test hosted by the United States’ National Institute of Standards and Technology in November 2018. It was followed by Chinese rivals Sensetime and Megvii.

Tencent turns to Southeast Asia after Beijing clampdown – Nikkei Asian Review 

What happened: Chinese tech giant Tencent has signed a five-year deal to give Singapore-based online game-publisher Sea the right to sell its game titles in Southeast Asia. Sea previously distributed Tencent titles on a game-by-game basis. However, the new deal allows the Singapore-based company to distribute games that have not previously published in the region.

Why it’s important: Tencent’s cash cow has been gaming. However, it has run into trouble with year with increased regulation of the sector. Beijing has been cracking down on game developers and has halted the publication of new games. Earlier this year, Tencent’s profit dipped for the first time in 13 years amid the standstill. The company had previously invested in Sea and looks to expand its footprint in the region through its deal with the company amid increased regulation back home. According to a 2017 report by Niko Partners, gaming revenue in the region is set to surpass $4.4 billion by 2021.

Cryptocurrency and ICOs are entering a new phase. The Chicago Board Options Exchange (CBOE) opened the floodgates with their foray into Bitcoin futures trading in 2017. During the first six months of this year, many traditional financial institutions were reported to be exploring cryptocurrencies. And today we are seeing more and more institutional investors coming into the scene.

But the price slump has left many retail investors wondering if the party is over. A group of institutional investors representing different funds gathered at TechNode ORIGIN’s Disrupt Stage at this year’s SWiTCH (Singapore Week of Innovation and Technology) to discuss the future of blockchain, ICOs, and the many tokens that appeared during the last year.

“I think we are going through a normal market cycle,” said Liu Guojie, Managing Director at BIBOX SEA. “During the early stages of internet development, we also saw a lot of bubbles. We are seeing similar things in the crypto and blockchain market.”

Others have offered different reasons. Li Xi, Regional Head at LD Capital in Singapore said that prices have dropped because some early players already achieved more than 100 times return and are actually cashing out.

“The second reason is that ICO fever is gone,” said Xi. “Previously you could use just one whitepaper to raise $1 million with no established business model but now everyone knows 99% of ICOs are scams.”

Do ICOs have a future?

In the first 5 months of 2018, a total of 537 Initial Coin Offerings with a volume of $13.7 billion have been closed successfully—which is more than all pre-2018 ICOs combined, according to PwC and Crypto Valley. But not everyone is convinced that the ICO will continue to be a significant form a fundraising in the future. China, for instance completely banned ICOs in late 2017.

According to Xi, the prospects are dim for ICOs since the majority of investors already got burned.

“Even institutional investors got scammed by some projects,” Xi said.

Elon Huang, Founder of MainNet Capital, shared similar skepticism towards the rise of so-called “shitcoins.” He believes that we may see more serious ICO projects in the future coming from bigger institutions.

Unlike the traditional funding scenarios where investors would be included in important decisions, with ICOs it is easy for them to lose control over a project. Aside from legal frameworks that would pressure project teams to disclose their use of funds, another possible solution would be depositing funds in an escrow and releasing them after certain milestones have been reached.

“In that way, we could align the investors’ and the project team’s interests,” said Liu. ICOs still does solve some problems that traditional venture capital cannot, according to Piyush Chaplot, Partner at NEO Capital Group.

“The great thing about ICO is that it has shown us the potential that we don’t have to follow the conventional venture capital path,” said Chaplot noting that ICOs offer global and immediate participation. If we give it some time, something beautiful may come out of the ICO mechanism, after all, he added.

Lack of regulations remains an obstacle

Several countries in Southeast Asia are already trying to fit ICOs and cryptocurrency trading into their regulations. Singapore, Thailand, and the Philippines are at the forefront. Thailand launched a regulatory framework for ICOs in July according to which all companies must be approved by Thailand’s Securities and Exchange Commission (SEC).

The Philippines are also preparing to release new trading rules for cryptocurrency exchanges while Singapore, Asia’s financial center, hosts most of the token funds. The Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) are currently looking into creating a platform for selling tokenized securities along with technology firm Anquan, consulting company Deloitte, and stock exchange operator Nasdaq.

However, governments and especially their central banks are careful when approaching these types of funds. Like China’s central bank, most are afraid of cryptocurrencies being used for capital flight, money laundering and financing illegal activities including terrorism. Protecting investors is also an issue.

As for investors, they are still struggling with some basic issues such as how to pay taxes. Rules for ICOs are still unclear but the difficulties may not be so large as they seem.

“Blockchain is a good tool for governments to trace taxes,” said Huang.

Despite the optimism in Asia, recent news from the US are casting a shadow on the crypto enthusiasm. At the beginning of September, Goldman Sachs, one of the companies that has been bullish on token trade from the beginning, put its plans for a cryptocurrency trading desk on hold sending crypto prices down again.

China’s online travel services provider Ctrip is reportedly planning to invest around $100 million in Indian online food delivery and restaurant search platform Zomato in a deal that values the company at $1.8 billion to 2 billion, The Times of India is reporting, citing people with knowledge of the matter.

The total amount of this funding could go up to $400 million with the participation of Alibaba’s financial affiliate Ant Financial and several unnamed investors, the report added. Another source, speaks on anonymity, adds that the transaction should close in two weeks.

The spokesperson for Ctrip did not comment to TechNode’s inquiries.

Ranked among the world’s top four online travel agencies along with Expedia, TripAdvisor and the Priceline Group, Ctrip is China’s largest online travel site with a market cap of $20 billion. If true, this investment would be one of the first steps for Ctrip to invest outside of travel services.

But given the close relationship between travel and food, such a bet wouldn’t be surprising. Outbound travel, especially to Southeast Asian destinations, is creating incredible opportunities for Chinese tech companies. Chinese tourists are shifting from a shopping spree to in-depth travel in its overseas consumption pattern, which involves better experiences in every sector from accommodation, shopping to local cuisine.

Actually, the company already tried to establish a presence in the cuisine-related sector by launching a Michelin guide-like gourmet list around the world.

Although not as active as other Chinese tech giants like Tencent and Alibaba, Ctrip has gradually established a solid portfolio surround its core business. The company acquired Scottish travel site Skyscanner for $1.7 billion two years ago and owns Tours4Fun, travel research site Trip.com and Trip by Skyscanner. In recent years, the company is taking bolder steps and looks into all kinds of investments under the concept of smart transportation. Ctrip made a strategic investment in US supersonic jet startup Boom Supersonic this April.

After a $200 million round led by Ant Financial in February this year, Zomato has entered an acquisition spree. While the investment is purely financial, the tie-up may help both of the companies in exploring international markets.

China’s love for QR codes is no secret. From meals and groceries to rent and rides—quite literally everything can be paid for by scanning QR codes.

The all-pervasive QR code has redefined what it means to make purchases and sales in the country, and it is driving a mobile payment trend that is crippling the growth of traditional payment systems like ATMs and even POS (point of sale) terminals. Overseas, Chinese QR code payment service providers are looking to set off another wave of disruption in cash-based economies.

The “little white box”

Today, China is the world’s largest and fastest-growing market for mobile payments. The transaction volume of third-party mobile payments reached RMB 40.36 trillion in the first quarter, ahead of the US and the rest of the world.

Mobile payment solution providers, perhaps out of all, have benefited the most from China’s shift away from cash-based payments.

Beijing Inspiry Technology, the QR code payment technology provider for some of China’s biggest Internet companies including WeChat, AliPay, UnionPay, and Meituan, is a pioneer in China’s QR code payment space. Inspiry’s president Wang Yue, dubbed by local media as the “Father of the 2D Barcode”

[note]二维码 erweima, literally “2-dimensional code in Chinese”[/note]

(in Chinese), founded the company in 2002. Around 2006, Wang and his team developed the Han Xin code (汉信码), the first national QR-code standard in China.

A decade ago when QR code payment was still in its early days, it took more than 17 seconds for a phone to generate a QR code—not necessarily representative of what a “quick response” code stands for.  “Almost everyone could not imagine the application prospect of the mobile phone QR code,” Hector Guan Heng, COO of Inspiry, recalls. That response time has since reduced to near instant.

In 2014, amid the upsurge of mobile payments in China, the company rolled out its first self-service QR code reader called the Smart Box, also commonly referred to as the “little white box” (小白盒). The self-service QR code scanner has become the mainstream offline payment option in China, now it holds 70% of the Chinese mobile payment device market.

The payment method rose to popularity largely because it’s a cheaper alternative to traditional payment systems. The little white box is roughly a quarter the price of a handheld POS (point of sale) terminal with QR code scanner that is usually priced at around RMB 800 to 2000. As a more cost-efficient payment option, self-service terminals are widely accepted, especially by small merchants and vendors.

The relatively low cost and lightweight self-service QR code readers are more apt for large-scale adoption and are quickly edging out ATMs as well as traditional POS terminals in China.

In 2017, GRG Banking, the largest ATM maker in China, posted a nearly 30% year-on-year decline in ATM equipment generated revenue.

Similarly, the rise of QR code payment initially sent shock waves in the traditional POS terminals industry. According to the People’s Bank of China (PBOC), the growth rate of POS sales slowed dramatically from 45% to 7.5% in 2016 over five years’ time. However, new payment solutions like the Smart Box enable POS terminals to be integrated with QR code scanners, NFC, and other mobile payment systems and the growth rate recovered to around 27% in 2017 (in Chinese).

Why QR codes trump NFC in China

Since the beginning of 2015, internet companies began promoting self-service scanners to the Chinese market in order to develop QR code-scanning payments themselves.

That was when self-service QR code scanning payment really took off.

Policy rocketship

The fact that QR code payment in China developed earlier and faster than in many other countries is because policymakers are more openminded and supportive, Guan told TechNode. Chinese regulators have been proactive in dealing with issues like security and unfair market competition, but not many hard rules have been imposed so far. Recently, the central bank started to encourage banks and payment service providers to self-regulate. It has asked fintech companies to form an industry group that works with experts on issues such as how businesses using QR codes can better improve their security.

Parts of the regulatory framework, industry norms and technical standards around QR code payment are still forming, however. Safety, which remains a top concern for QR code payments, will eventually be addressed, said Guan, noting that the self-service scanners that read dynamic QR codes—editable code generated by mobile apps—are regarded as more secure than static QR codes—printed out codes that customers scan to pay. In April, the government imposed a new regulation aiming to improve safety for the use of QR code by capping daily spending to RMB 500. The limit applies only to static QR code, which in turn boosted to the demand for self-service QR code scanners.

Not just the government, but internet companies like Alipay, WeChat Pay, and Meituan have come up with new ways to boost the usage of QR code payment and have been keen to work with payment service providers on bettering their products, Guan said.

“The mobile payment industry has fully entered the era of QR code scanning, forming an active whole industry chain,” said Guan. The emergence of new business models such as O2O, new retail, online food delivery services is driving QR code payment into a widening array of services.

Guan noted that QR code payment is not only an entrance for new traffic, it also creating new business opportunities and becoming a commercial infrastructure itself. For example, QR code payment bridges the physical and the virtual world, which makes it an enabler of the O2O marketing.

China’s mobile payment platforms are transforming online marketing

Southeast Asia, the next blue ocean market

Mobile payment isn’t only being integrated into more verticals, but also more geographies.

A top factor that helps drive Chinese payment technology expansion overseas is tourism. Just when Chinese mobile payment companies seek to grow outside of their home turf, other countries are ready to cash-in on the purchasing power of Chinese tourists whose spending abroad makes up 21% of overall tourism spending.

For Inspiry, the main focus now is to open up markets in Southeast and South Asia as well as Japan. According to the Global Payments Report by payment technology provider Worldpay, e-wallets will become the top payment method globally with a usage rate of 46% by 2021. In the Asia Pacific, it is expected to reach 51%.

QR codes are seeing rising popularity in Southeast Asia because it is relatively cheap and easy to adopt comparing to NFC-based Apply Pay, Android Pay or Samsung Pay. Plus it does not require an internet connection to work.

With growing penetration of mobile phones and internet connectivity in Southeast Asia and broadening acceptance of mobile payment options across the Asia Pacific region, the circumstance is favorable for Chines payment service providers to venture into foreign lands. Earlier this year, Alipay launched its smartphone-based QR-code payment service in Japan, and WeChat Pay made its foray into Singapore.

Looking ahead, Guan believes that more countries and companies will opt for QR code payment in the future. In fact, it is already happening in Japan. LINE Corp, the operator of Japan’s most popular messaging app, recently launched a campaign to waive commission fees on QR code payments for three years. SoftBank and Yahoo Japan are also launching similar campaigns this fall. Guan reckons that US-based internet companies like Google, Facebook, and Whatsapp will likely to join the movement in the future.

Guan noted that QR code could help developing countries skip over the credit cards and cheques and enter the era of mobile payments—similar to what Chinese consumers experienced a few years ago. Nevertheless, it will take time for some markets to catch up. “The popularity of mobile payments requires the establishment of public habits, and areas with weak Internet operations may not be able to quickly drive this shift,” said Guan.

E-commerce giant Alibaba announced today that it will invest an additional $2 billion in Lazada Group to accelerate the growth plans of Southeast Asia’s largest e-commerce platform and deepen its integration into the Alibaba ecosystem.

This accumulates Alibaba’s total investment in Lazada to $4 billion. Alibaba acquired 51% stake in Lazada in April 2016 with an investment of $1 billion and further increased its stake to 83% with another $1 billion investment in June 2017.

Launched in 2012, Lazada helps more than 145,000 local and international sellers as well as 3,000 brands serving the 560 million consumers in the region through its marketplace platform, offering a wide range of products in categories ranging from consumer electronics to household goods, toys, fashion, sports equipment, and groceries.

Along with funding also came a shuffle in management. Lucy Peng, who currently serves as Lazada’s Chairman and is a co-founder of Alibaba, will assume the additional role of chief executive officer. Lazada founder Max Bittner, who had been its chief executive officer since 2012, will assume the role of senior advisor to Alibaba Group and assist in the transition and future international growth strategies.

“With a young population, high mobile penetration and just 3% of the region’s retail sales currently conducted online, we feel very confident to double down on Southeast Asia. Lazada is well-positioned for the next phase of development of Internet-enabled commerce in this region, and we are excited about the incredible opportunities for super- charged growth,” said Peng.

“Alibaba’s new commitment of capital and resources is good for Lazada and good for the Southeast Asia e-commerce market. I am excited about the future for Lazada and Lazadians and I look forward to continuing to contribute to the success of the business by helping Lucy and Alibaba’s management,” said Bittner.

It’s not only the e-commerce part that Alibaba is interested in the burgeoning region. The tech behemoth had made significant investments in the area over the years. Alibaba Cloud announced this month that it has opened its first data center in Indonesia. In January, Alibaba Cloud launched Malaysia City Brain to help its city traffic, trade and also to grow local startups.

Editor’s note: This was contributed by Sheji Ho, the Group Chief Marketing Officer at aCommerce, an end-to-end e-commerce enabler in Southeast Asia. Currently based in Bangkok but having previously worked in China, Sheji writes about e-commerce, tech, the internet, and how Southeast Asia is the next China.

Pinduoduo, or PDD, is a social commerce app founded by Colin Huang, an ex-Google engineer, in September 2015. Only a couple of years old, PDD has become the fastest growing e-commerce company in China. It raised $100 million in 2017, is backed by China’s Banyan Capital and Tencent, and valued at a whopping $1.5 billion.

As of Feb 21, 2018, PDD ranks #3 overall in the Chinese iTunes app store ranking for free apps, after popular apps like Tik Tok (aka Douyin) and WeChat, and ahead of other shopping apps like Taobao. PDD went from 100 million yuan ($16 million) GMV a month in early 2016 to 4 billion yuan ($630 million) GMV a month by 2017, putting it in fourth place behind Alibaba, JD, and Vipshop.

How does Pinduoduo work?

Users can download the PDD app or access it within WeChat. Like any e-commerce platform, PDD offers products across a wide range of categories from food to fashion. However, unlike Tmall and JD, PDD incentivizes users with discounts to invite friends to buy in groups.

For example, one container of Similac Advance Infant Formula Powder costs RMB 59 if you buy alone but only 35.5 yuan if you can get one other person to buy it too. In the screenshot below, a total of 1,822 pairs have “group-purchased” this item already.

In addition to group discounts, PDD also incentivizes customer acquisition. Getting users to follow the PDD WeChat Official Account, install the app, and sign up via WeChat login will earn them free products.

PDD also offers cash hongbao worth RMB5-20 to users for each friend they get to download the app and register. The entire system is then gamified through a public leaderboard.

Wait, is this new? Didn’t Groupon invent social commerce?

Groupon did arguably pioneer the group buying concept. In its early days, a certain number of users had to sign up for the same deal in order for everyone to receive the voucher. But unlike PDD, there wasn’t a direct incentive; users had to sit back and wait for anonymous users to tip the scale.

This mechanism was quickly abandoned to scale faster with minimum thresholds that acted more like gimmicks.

Groupon was labeled “social commerce” at first but in its later years, lost its social aspect.

Let’s take a step back and look at the definition of social commerce, according to ConversionXl:

 “Social commerce is defined as the ability to make a product purchase from a third-party company within the native social media experience.”

Groupon emerged in the pre-mobile age of 2008 when most consumers still transacted via desktop, especially in the company’s US home market. Back then, less than 1% of e-commerce transactions were via mobile acquisition channels.

In addition, the company’s main distribution channel was email newsletters, a slow and high-friction medium and payments weren’t seamless either as users relied on a credit card or PayPal.

Now looking at 2016 in China—PDD’s first full year in operation—WeChat was the country’s dominant “super app” and leading medium to socialize online with 889 million Monthly Active Users (MAUs) by year-end.

71% of e-commerce now takes place on mobile, creating a flattering backdrop for the rapid rise of PDD, which started out as a mini program on WeChat.

Paying for products on PDD is also remarkably easy because the app makes it automatic. After the first payment, users can opt for one-click payment via WeChat Pay that doesn’t require passwords.

Desktop usage, clunky email newsletters, and credit card payments limited Groupon’s true social commerce potential. Where Groupon failed, PDD is succeeding because of an ecosystem of mobile-first users and WeChat’s features that make it a super app.

Will PDD come to Southeast Asia?

Why not? Southeast Asia e-commerce is already being carved up by Alibaba and Tencent. Lazada and Tokopedia, two companies owned and invested in by Alibaba, dominate the B2C and C2C space at one end and Tencent-invested JD, Shopee, and Go-Jek are at the other end.

With Southeast Asia’s horizontal e-commerce market being consolidated into a few properties like Lazada, Tokopedia, JD, and Shopee, there isn’t as much opportunity in the space as before.

New e-commerce players have to focus on dominating a specific, vertical category or provide a competitive advantage through means other than outspending peers in advertising and/or coupon subsidies.

This is where a model like PDD fits snuggly.

It also helps that one of PDD’s biggest investors is Tencent, which already has its eyes set on the rapidly growing Southeast Asian market.

Will the PDD business model work in Southeast Asia?

To determine if the PDD model would work in the region, we need to identify the criteria that were conducive to its success in China:

1. Lack of distribution channels / expensive distribution channels

If you strip away all the hype, PDD’s competitive advantage is in its customer acquisition strategy. Instead of relying on expensive channels like display advertising or paid search (e.g. Baidu ads), PDD is paying its users to get more users. For example, CPCs alone on Baidu can range from 5 to 25 yuan. Note these are clicks, not even users acquired.

Southeast Asia (excluding Singapore and Malaysia) is very similar to China in terms of lack of channels, due to a similar “no-tail” ecosystem. Whereas entrepreneurs in China had to pick their poison between Baidu, Sina and Sohu back in the day, startups in emerging Southeast Asia are limited to Facebook Ads, Google Search, and portals like Detik in Indonesia and Sanook in Thailand.

Early entrants like Lazada took advantage of low cost-per-clicks (CPCs) back in 2013 but given the raging e-commerce “bloodbath”, online ad CPCs have gone through the roof.

Having saturated online channels, Lazada started exploring offline advertising channels like TV and out-of-home media.

Others like Pomelo Fashion tapped into physical stores as a more cost-efficient way to acquire users and simplify last-mile logistics.

PDD social and viral customer acquisition strategies could work quite well.

1. High mobile commerce penetration

The majority of e-commerce transactions in China now take place on mobile. In 2016, 71% of e-commerce GMV was on mobile. In the US, this number was only 20% in 2016.

In Southeast Asia, companies like Lazada and Shopee today see over 65% of their orders coming from mobile (with 21.6% using both mobile and desktop to shop), according to a recent survey by ecommerceIQ.

Needless to say, high mobile penetration in Southeast Asia along with high mobile e-commerce usage will provide a fertile ground for a business model like PDD to gain traction here.

1. Frictionless mobile payments

One of the drivers of PDD’s success is its seamless payments through WeChat Pay.

This will be a challenge for PDD in Southeast Asia as only Singapore and Malaysia are credit card dominated whereas the rest of the region is mainly a cash-on-delivery market.

Despite efforts to come up with a universal mobile payment standard, no one has succeeded as of today. Efforts like Sea’s AirPay, Ascend’s True Pay, and LINE Pay have hit a wall due to lack of distribution, lack of use case, and a plethora of other issues.

Right now, most eyes are on Go-Jek’s Go-Pay, which has a massive distribution channel by leveraging Go-Jek’s 40 million install base and 10 million Weekly Active Users (WAUs). In addition, and more importantly, Go-Jek addresses emerging Southeast Asia’s unique lack of both credit card and bank account penetration — users are able to top up their Go-Pay accounts by handing cash to Go-Jek drivers that essentially act like mobile ATM deposit machines.

While still a poor man’s WeChat Pay, Go-Pay offers hope for business models like that of PDD to thrive in Southeast Asia.

1. Attachment to popular social platform

Without the WeChat ecosystem, PDD wouldn’t have been the company it is today. Being embedded in WeChat, PDD was able to quickly get massive distribution by tapping into the potential 889 million MAUs of WeChat.

In Southeast Asia, Facebook, Instagram, WhatsApp, and LINE are highly popular, however, none are considered super apps that offer seamless integration.

The closest to WeChat in Southeast Asia would probably be Indonesia’s Go-Jek.

While Go-Jek hasn’t entered e-commerce yet (it’s positioned only as a services marketplace and offers delivery for partners through its GO-MART product), it wouldn’t be surprising if PDD decided to leverage the Go-Jek platform, given the similarities to WeChat in China. Like PDD, Go-Jek also counts Tencent as an investor.

With an estimated third of e-commerce in markets like Thailand happening on Facebook, Instagram and LINE, the user behavior of buying through social channels already exists.

1. Access to cheap product sourcing

If you browse through PDD, you’ll notice that most of the products sold bear similarities to many of those sold on Taobao. In other words, a lot of “mass” and non-branded products. PDD thrives in China because of easy access to a supply of these products manufactured locally.

However, in Southeast Asia, these kind of products (typically sold on social media and C2C platforms) are imported from China, which leaves less margin for PDD to play with in terms of discounts and customer acquisition.

To sum up, emerging Southeast Asia meets several of the criteria behind PDD’s success in China but poses some unique challenges:

PDD success drivers: China vs. Emerging Southeast Asia

What will happen next?

In the analysis, we’ve identified some of the drivers of PDD’s rapid rise in China and also their presence in emerging Southeast Asian markets at an earlier stage.

Given this opportunity, we can expect the following scenarios to play out over the next few months and years:

Local and Chinese entrepreneurs will launch PDD clones across the region

Ever since opening up to the world in the 80s, we can describe China having gone through the following three stages, with the third one still progressing as we speak:

1. Made-in-China (1980-2000)
   China perceived as manufacturing base for (often cheap, low-quality) export products
2. Copy-to-China (2000-2015) Chinese entrepreneurs, some foreign educated, bring back models that worked in the US, e.g. Search (Google -> Baidu), Portals (Yahoo -> Sina, Sohu)
3. Copy-from-China (2015-2030) Birth of unique Chinese Internet business models (e.g. dockless hire bikes, payments, live streaming, social commerce, O2O). Increasing media focus on Chinese tech innovation and locals outside of China looking for Chinese models to copy

We are witnessing stage 3 happening right here in Southeast Asia. Below is a Thai post on Facebook looking to recruit staff to work on what looks like a PDD clone:

It doesn’t have to be local talent copying PDD from China to Southeast Asia. With the influx of Alibaba, Tencent and JD into the region, there are plenty of Chinese employees who’ll be noticing the similarities between Southeast Asia today and China, and jump on new opportunities.

PDD will enter Indonesia through Go-Jek (helped by common investor Tencent)

If PDD were to follow Alibaba and Tencent’s steps and enter Southeast Asia, we expect them to join forces with Go-Jek. By embedding itself inside Go-Jek, PDD is executing the same game plan that led to its rapid initial growth within the WeChat ecosystem. Fostered by a shared investor–Tencent–Go-Jek would be the perfect launch partner for PDD in Southeast Asia.

Existing players will adopt the PDD business model to compete against horizontal e-commerce plays

Local e-commerce players like MatahariMall, Konvy, and Orami could pre-empt PDD by adopting its customer acquisition strategies to compete with regional giants like Lazada and Shopee.

For Konvy and Orami, two female-focused e-commerce platforms, this move could make a lot of sense since the majority of PDD’s users in China are female, over 40 years old, and living in smaller cities.

Play on players.

Chinese conglomerate Shanda Group invested $5.6 million Series A in Malaysian startup NIDA on February 2017 in order to further tap into Southeast Asia regions, the next booming travel destination for Chinese tourists.

In fact, Southeast Asian countries remain top destinations for Chinese outbound tourists. Thailand, Singapore, Vietnam, Malaysia, Indonesia and the Philippines are among the 10 most popular destinations for outbound travelers during the National holiday according to the China Tourism Academy.

But why did the global privately-owned investment group Shanda (盛大集团) invest in the 3-year-old Malaysian company?

“The primary reason is that Shanda Group wants to establish a similar model to HomeInns in SEA,” Kaneswaran Avili, CEO of NIDA told TechNode.

HomeInn Hotels Co. (首旅如家) and Ctrip jointly established an economic hotel chain HomeInn (如家酒店, means “Home-like hotel”) in 2002. HomeInn’s first branch opened in Beijing, and has since furthered its expansion to more than 2300 hotels in and outside of China over the decade, and was listed as one of the top 50 hotel chain brands in 2016 in the HOTELS magazine. It seems that Shanda, seeing the SEA as the next market, is betting on NIDA to do the same.

Southeast Asia’s economy hotel room network NIDA secures over 4,000 hotel partners in Indonesia, Thailand, Malaysia, Philippines, with additional plans to launch in Singapore. As Shanda’s investment group is headquartered in Singapore, this might help NIDA’s expansion in the neighboring country.

“NIDA caught our attention as they have developed a business model that enables the Company to quickly build a highly scalable platform with a strong brand by effectively addressing the needs of travelers and local hotels in the fragmented, less digitalized yet large and rapidly growing economy hotel sector in Southeast Asia,” said Robert Chiu, President of Shanda Group said in the press release when NIDA received investment.

We asked Shanda to further comment on this investment and future expansion in the Southeast Asian market, but the company declined to comment.

Why Shanda invested in NIDA

There are handful of competitors in the booming Southeast Asian travel market including local players like Indonesian hotel and flight booking site Traveloka, hotel reservation company Agoda, Expedia, booking.com, Ctrip and international players like Trip Advisor, Hotel Quickly, hotel price comparison site Trivago.

Established in September 2015, NIDA is comparably a new player in the sector, but has found the niche in the accommodation market: economy hotels.

We visited one of the hotels integrated to NIDA, called Javelin boutique hotel in Kuala Lumpur, Malaysia. At a first glance, the hotel looked like just an ordinary hotel. At the time, Kaneswaran said soon this hotel will change its name to Hotel NIDA, and it actually did, as the picture above shows. Why would these boutique hotels give up their brands to join NIDA?

“They are not interesting brands. Brand does not add significance to these independently owned hotels,” he says. “Joining the network of a bigger brand brings significant benefit for them, in terms of technology, customer attraction and lower operation cost.”

NIDA automates the registration process so that hotels can gradually decrease the people in the front line. This makes the check-in and out process efficient so that customers can check in much earlier, and improves the financial account of hotels by reducing human labor. When a customer checks out, the company sends the alert the cleaning people so that the room can be sold much quickly to new customers.

“Normally customers have to check out by 12 p.m., and can check in after 2 p.m. We want to change that policy, because business people arrive at the airport with morning flight, arrive in the hotel early in the morning, and want to have early morning shower and go to meeting, but current hotel system doesn’t allow that,” Kaneswaran, a former director of AirAsia said. When AirAsia, Malaysia’s top-grossing budget airlines started with two domestic air craft in 2001, he implemented company’s various distribution channels in all markets. He sees the economic hotels going same for tourists.

“Travelers are spending more time and money outside, and spend little time and money in the hotel room. They spend lower than $40 per night,” Kaneswaran says.

NIDA is already tapping to Chinese customers. Thailand’s hotels that joined NIDA are integrated with Chinese provider of travel services Ctrip. “Chinese tourists’ demand for Thailand’s hotel rooms is much higher [than rest of SEA countries],” he explains.

Prior to Shanda’s investment, NIDA landed $4.2 million pre-Series A investment in April of 2016 from Japanese fund CyberAgent Ventures and Convergence Ventures.

Editor’s note: This is the second part of a post on Southeast Asian e-commerce by Sheji Ho, for the first part click here. Sheji Ho is the Group Chief Marketing Officer at aCommerce, an end-to-end e-commerce enabler in Southeast Asia. Currently based in Bangkok but having previously worked in China, Sheji writes about e-commerce, tech, the internet, and how Southeast Asia is the next China.

6. Go-Pay will venture outside of Indonesia through Sea, Traveloka, and JD to become the WeChat Pay of Southeast Asia

Indonesia’s e-commerce today is like what China was in 2008—the pace of change is unimaginable. When I visited our office in Jakarta 12 months ago, hardly anyone was using Go-Jek’s mobile payment platform and wallet, Go-Pay. Returning six months later, almost all of my colleagues used Go-Pay to transfer money peer-to-peer and pay for products and services.

In most of emerging Southeast Asia (excl. Singapore and Malaysia), credit card penetration rates are in low single digits and most people don’t even have a bank account.

Unfortunately, few fintech and payment startups in the region have created products to address the lack of credit cards and large unbanked population. Instead, the majority happily build payment gateways and e-wallets that rely on existing and legacy credit card infrastructure like in the US (Apple Pay anyone?). It’s no wonder cash-on-delivery (COD) still makes up over 70% of all processed transactions according to data by ecommerceIQ.

Those that do focus on mobile wallets topped up with cash like Thailand’s True Money struggle to achieve sustainable “core product value” and reach mass.

“Community, Commerce, and Payments are inter-connected in the Digital World. Thus far, all successful mobile payment plays, globally, are centered on the commerce and community axis. PayPal started with eBay, Alipay with Alibaba/TMall/Taobao, WeChat Pay leveraged WeChat/QQ, and Amazon Pay has Amazon. Due to this very reason, standalone payments/wallet business will struggle,” said Gaurav Sharma, founder at Atlantis Capital

Go-Pay addresses these fundamental issues by allowing users to send payments peer-to-peer (P2P) and top up by giving cash to Go-Jek drivers who act like mobile ATM machines.

More importantly, with Go-Jek being part of the Tencent faction, we expect the company to push Go-Pay into other Southeast Asian countries through its community and commerce platforms such as Sea (Garena, Shopee, etc.), Traveloka, and JD.

Following rumors in November, Go-Jek finally announced its acquisition of Kartuku, Mapan, and Midtrans. The latter, being one of Indonesia’s top online payment gateways, will give Go-Pay additional distribution channels and use cases such as Matahari Mall, Tokopedia, and Garuda Indonesia, pushing it beyond the realm of P2P into B2C payments.

A strong contender for the “WeChat of Southeast Asia” is Grab, whose 2.5 million daily rides makes it the largest ride-hailing platform in Southeast Asia. GrabPay, launched this year, is Grab’s effort to move Singapore towards a cashless society, with plans to expand across the region in 2018.

Should Go-Jek be worried? Not really. Singapore is not the ideal test-bed to launch a mobile wallet because the country already has a ubiquitous cashless payment platform called “credit cards.” And GrabPay’s recent partnership in Indonesia with Lippo Group’s Ovo hasn’t garnered much attention or presented wide use cases.

“While it might seem like common wisdom to first test (an idea) in Singapore, and then take it regionally and to the world, with all due respect to the government, I think it doesn’t make sense in today’s world,” said Min-Liang Tan, co-founder and CEO of Razer.

Go-Pay, on the other hand, is adding value to users in a country where only 36% have bank accounts and 2% have credit cards. Emerging markets like Thailand, Vietnam and the Philippines have a similar (lack of) financial infrastructure as Indonesia.

Go-Jek, by being part of the Tencent faction, has access to a much more diversified distribution channel and offers a variety of common day-to-day use cases such as gaming (Garena), shopping (Sea, JD), travel (Traveloka) and pretty much everything else (Go-Jek itself).

7. New mobile-first fashion and beauty marketplaces will fill void left by Zalora

Zalora, Rocket Internet’s once star fashion e-commerce venture, has struggled in Southeast Asia since launching in 2012. Zalora Thailand and Vietnam were picked up by Thai retail conglomerate Central Group for pennies on the dollar while the Philippines entity was partially sold off to the Ayala real estate group. There were even rumors of Zalora Indonesia exiting to local retailer MAP, which were swiftly denied.

A few factors contributed to the company’s difficulties: one was price and product variety competition with merchants selling on Facebook, Instagram and LINE, while the second one was control of brands by one or two retail conglomerates like Central in Thailand, MAP in Indonesia, and SSI Group in the Philippines. These two factors made it difficult for Zalora to pivot to an ASOS-style premium brand marketplace.

A shell of its former self, Zalora’s challenges left a void that is increasingly being filled by more nimble, mobile-first fashion marketplaces that see an opportunity in a space dominated by mass-market, general e-commerce platforms like Lazada and Shopee.

As evident from Amazon’s struggle to court premium fashion brands in the US, luxury brands don’t like to sell on mass platforms, where merchandise shows up beside detergent and washing machines.

“After purchasing Whole Foods, Amazon now has access to the wealthiest refrigerators in the country but they still can’t get into our closets because the aspirational beauty and fashion brands don’t want to distribute on their platform. Why? Because they don’t have their heads up their ass and realize that Amazon partners with brands the way a virus partners with its host,” said L2 founder and NYU Stern Professor Scott Galloway.

Over in China, both Tmall and JD had to exert a Herculean effort to attract fashion brands. In October, JD launched TopLife, a standalone online luxury platform to provide a high-end experience that high-end brands promise. Alibaba also launched Luxury Pavilion, a section within Tmall tailored to luxury brands like Burberry and Hugo Boss.

Spearheading a new wave of mobile-centric Southeast Asian fashion marketplaces are Zilingo, fresh off an $18 million Series B financing round, and Goxip, a Hong Kong-based startup that recently completed a $5 million Series A round with plans to enter Thailand. In Indonesia, there’s LYKE, ironically founded by the ex-Zalora CMO.

With the benefits of hindsight and understanding of the importance of social commerce on driving fashion, these emerging players will offer elements like chat, content and an influencer network to offset some of the customer acquisition cost challenges inherent in scaling e-commerce.

8. Marketplaces will grow up and clean up ‘grey market’ for blue-chip and luxury brands

Over the last six years, most of the region’s initial e-commerce growth was focused on driving GMV by tapping into any merchant and brand willing to sell online. In 2018, marketplaces like Lazada and Shopee will continue to attempt to onboard bigger global brands but their success will require them to control grey market sellers and counterfeit goods in order to cultivate an environment in which blue-chip brands will feel comfortable selling. Alibaba went through the same process in China when discussions surrounding counterfeits and grey market goods on Tmall and Taobao peaked around the company’s IPO in 2014.

Based on data provided by marketplace analytics platform BrandIQ, 80% of SKUs from consumer product giants like Unilever, Samsung, and L’Oreal on average are sold by unauthorized, grey market resellers. These grey market SKUs are sold at a price 30% lower than official flagship stores and authorized resellers.

Why all the fuss? Because grey market sales impact the image of brands selling in official stores.

“Lately, the explosion of third-party sellers on the site has led to authentic goods from companies such as Nike, Chanel, The North Face, Patagonia and Urban Decay being sold on Amazon even though they don’t authorize the sales, undercutting their grip on pricing and distribution,” Wall Street Journal reported.

Nike, for example, refused to sell directly to Amazon for a long time, fearing it would undermine its brand. But by not selling on marketplace creates space that will be quickly filled by grey market, unauthorized third-party resellers looking for arbitrage opportunities as seen from the previous BrandIQ data.

Customers buying from these grey market resellers perceive this as buying from the brand itself and, when having a poor customer experience, end up blaming the brand rather than the unauthorized reseller. BrandIQ data shows that the average rating for grey market SKUs is 24% lower than reviews for similar products sold through the official shop-in-shop or flagship store.

We’ll see a push from the marketplace and brands to address grey market sales in Southeast Asia in 2018. Marketplaces will employ a tighter grip on third-party resellers in order to attract better brands, while brands will set up an official presence on marketplaces as a way to pro-actively manage the customer experience and brand image.

9. Marketplaces and e-tailers will introduce its own private label products and alienate brands

As the e-commerce market in Southeast Asia matures and consolidates, marketplaces, e-tailers, and e-commerce startups will be increasingly scrutinized for margin growth. Gone are the days of aggressive top-line growth and market share grabs at all cost.

With Lazada post-Alibaba acquisition and Shopee post-IPO (as part of Sea), what other value-added services will these companies tap into for sustainable revenue growth? In this instance, companies in Southeast Asia have taken a cue from the China playbook. Lazada launched a Lazada Marketing Solutions unit to monetize its 23 million active annual customers through advertising similar to how Tmall and Taobao charge for ads in China.

Today, Lazada offers display ads and programmatic promoted product ads to its customers but is expected to launch pay-per-click search ads in 2018 competing with Google, Facebook and similar networks out there. Across the region, Shopee has already launched per-per-click search ads.

Beyond advertising, we can expect more marketplaces and e-tailers to follow Amazon’s foray into private label brands to boost margins. With the data collected from selling third-party brands, these e-commerce platforms know exactly what kind of products sell best, to whom, at what time and where.

Flipkart, one of India’s top marketplaces competing with Amazon, recently announced its aim for 20-22% sales contribution from private labels in the next five years.

“When we first decided to foray into private labels in mid-2016, a ‘Tiger Team,’ for private labels was created internally to research 50-odd retailers around the world, including Europe, the US, China and India, to envisage what the private label landscape would look like for Flipkart over the next few years. Research revealed that private labels can contribute 10-20 percent of the company’s business. For instance, US-based Costco Wholesale’s private label brand Kirkland contributes 20-25 percent of its business,” said Adarsh Menon, Flipkart’s Head of Private Labels in an interview with The Hindu.

Launching private label brands in Southeast Asia isn’t something new. Zalora launched its own fashion label called EZRA as early as 2013 followed by Lazada’s LZD Premium Collection in 2014. With the focus on top line growth in the period of 2013-2016, private label brands have taken a backseat as seen from the limited number of them listed today on Zalora and Lazada.

Althea, a Korean beauty e-retailer that recently raised a $7 million in Series B round of financing, specifically said to be using the new funds to launch more private label products.

“Based on the vast amount of user data that we have gathered… we are now able to understand the specific needs of our customers in each market, garner feedback almost instantly through our online platforms, and quickly turn that into a product within a month or two,” said Althea co-founder and CEO Frank Kang. “We have deep insights into our customer base that traditional brands simply cannot match.”

In light of all this, it’s not surprising Zalora has expressed renewed interest in pushing its own private labels, “Something Borrowed” and “Zalora”, for the new year.

10. B2B e-commerce to disrupt offline distributors, blurring lines between online and offline distribution

Despite the rosy outlook for e-commerce in Southeast Asia, the reality is that B2C e-commerce today is still in the low single digit percentages. Given aggressive growth targets, brands, marketplaces, and e-tailers will increasingly look toward non-B2C channels such as B2B and B2E (Business-to-Employee) channels for revenue.

Zilingo, the Sequoia-backed fashion marketplace, launched its Zilingo Asia Mall B2B marketplace to allow fashion buyers in the US and Europe buy Zilingo merchandise at wholesale prices, effectively creating an “Alibaba” for fashion. Shopee launched a wholesale feature earlier this year, allowing merchants to set lower unit prices for larger order quantities.

aCommerce, Southeast Asia’s e-commerce enabler and e-distributor, fresh off a $65 million Series B round from KKR-backed Emerald Media, coined a new term for all this—“B2A” or Business-to-All. The company is behind the B2B and B2E initiatives for brands like Samsung and L’Oreal. According to the company, B2B e-commerce now contributes to 30% of total revenues at aCommerce, up from 10% a year earlier (disclaimer: I work here).

Opinions expressed are solely my own and do not express the views or opinions of my employer.

Editor’s note: This is the first part of a post on Southeast Asian e-commerce by Sheji Ho, for the second part click here. Sheji Ho is the Group Chief Marketing Officer at aCommerce, an end-to-end e-commerce enabler in Southeast Asia. Currently based in Bangkok but having previously worked in China, Sheji writes about e-commerce, tech, the internet, and how Southeast Asia is the next China.

 Alibaba’s entry into Southeast Asia served as social proof for many entrepreneurs and businesses that they were onto something big, which led to a year of exuberance for e-commerce in the region.

“We’re just at the beginning, [the Alibaba-Lazada deal] will kickstart the whole cycle. It will attract more global investments into the region, and attract more entrepreneurs who now see this region as a great place to start a business,” Stefan Jung, founding partner at Indonesia-based Venturra Capital said in an interview with Tech in Asia.

Even as we get closer to 2018, there are already numerous casualties in one of the most promising e-commerce growth markets in the world.

Alibaba doubled down on its Lazada investment by upping its share from 51 percent to 83 percent and, in a push to monopolize the market, put grips on Tokopedia, arguably one of Lazada’s biggest competitors in Indonesia.

Tencent, through JD or directly, also began executing its China playbook by investing in companies like Sea, Go-Jek, Traveloka, Pomelo Fashion and Tiki.vn. Global attention from the US came from KKR who put $65 million into e-commerce ‘arms dealer’ aCommerce through Emerald Media in a bid to replicate Baozun’s dominance in the Chinese “TP” (Tmall Partner) landscape.

And the plays won’t stop here.

Leveraging newly consolidated positions of strength, marketplaces will cross traditional boundaries and move into areas like private label brands and offline distribution. Brands will also feel increasingly cornered, facing a “damned if you do, damned if you don’t” situation.

Those that survive 2018 will have to find a niche for themselves, such as in fashion or home because there isn’t much room left for another horizontal e-commerce player. Others will be tempted to take risky shortcuts like say, raising money through ICOs. 2018 will also see Tencent, not Alibaba or a local company, emerge as the winner in mobile payments in Southeast Asia.

It might be a good time to start learning Chinese.

1. Plata o Plomo: Southeast Asia e-commerce will be increasingly factionalized into Alibaba and Tencent camps, and locals will pick sides

Given its similarities to China roughly 10 years ago, Southeast Asia has become a gold rush for Chinese Internet giants looking to expand beyond the mainland. It was Alibaba’s acquisition of Lazada last year that triggered an arms race between China’s #1 and #2 in Southeast Asia, and in turn, will cause local companies to choose sides.

Alibaba also led a $1.1 billion investment in Tokopedia in 2017, continuing to place its biggest bets on e-commerce. Moving forward, the company is expected to position Lazada and Tokopedia as the Tmall and Taobao of Southeast Asia, respectively.

Meanwhile, Tencent has aggressively tried to replicate a three-prong formula that was successful in its fight against Alibaba in China: gaming, mobile and payments. The first step was becoming the largest shareholder of Sea (previously Garena), predominantly a gaming powerhouse that runs Shopee, a mobile-first e-commerce marketplace, and the second was placing bets on Go-Jek to become a “super app” like WeChat and WeChat Pay. Understandable as WeChat Pay now commands an impressive 40% market share in China vs. AliPay’s 54%, up from 11% in 2015.

“Is there a land grab right now for these kinds of assets? I think in the land grab they [Tencent] are following us. They are seeing that we have positioned ourselves very well, and they’re sort of playing a catch-up game. So what we want to do is, since we already have our positions, is to work with local entrepreneurs,” Joe Tsai, Alibaba Vice Chairman, said while speaking to Bloomberg.

With both Tencent and Alibaba market caps at all-time highs, we expect this trend to continue throughout 2018 with both sides gobbling up more local companies across the e-commerce ecosystem and upping shares in existing ones.

2. Facing slow organic growth, Amazon will acquire a company to fast-track its e-commerce expansion in the emerging region

Amazon’s “entry into Southeast Asia” was the biggest surprise and non-surprise at the same time. A non-surprise because Amazon’s long-awaited and rumored soft-launch into Singapore was widely covered by the media even before the company’s Prime Now services officially became available on July 26, 2017. A surprise because Amazon’s expected tour-de-force across the region ended before it even started.

Amazon fanboys celebrated the initial launch of a scaled down, poor man’s version of Amazon—Amazon Prime Now—offering a measly one million household items and daily essentials.

“I was expecting more things that I can’t get in Singapore, for example, Sriracha or something small that’s not available in Singapore but most stuff on Prime Now are basic things you can get from Fairprice…” said Reddit user Ticklishcat.

But there’s a good reason for it. It doesn’t make sense for Amazon to set up a full-blown local presence in the country-state. Singaporeans, under the Free AmazonGlobal Saver Shipping option, were already enjoying free international shipping from Amazon en masse for orders over US$125. The country ranks #29 in terms of session/year to Amazon.com on a global scale but #4 when normalized for population size. With an average of 14.04 sessions per person per year visiting Amazon.com, Singapore takes the top spot among all the countries in Asia.

Singaporeans are already buying from Amazon, without the latter’s full-fledged local presence: Singapore ranking only #29 in traffic to Amazon.com but #4 when normalized for population size (#1 in Asia)

The launch of Amazon Prime in Singapore earlier this month makes it even less likely for the firm to set up local operations beyond Amazon Prime Now. Amazon is no longer subsidizing the original free shipping for orders above US$125 to Singapore and Singaporean Prime members have free international delivery only on orders above S$60 on Amazon’s US website for S$8.99 per month in addition to other benefits.

Not much else has been heard about the company’s further expansion into the region, particularly Indonesia and Thailand, where markets are being rapidly carved up by Alibaba and Tencent. With time running out for a full-fledged, organic entry into the high-growth markets of Southeast Asia, its stock trading at all-time highs, and not too distant memories of failure in China, we expect Amazon to attempt at least one major acquisition in 2018 to accelerate regional expansion.

3. Offline is the new online: pure-play e-commerce to launch physical stores to offset rising online customer acquisition costs and improve last-mile fulfillment

While traditional offline retailers like Central in Thailand and Matahari in Indonesia scrambled to move business online, online pure-play e-commerce is expected to make moves offline. With online customer acquisition channels like Google and Facebook rapidly reaching saturation and diminishing returns, e-commerce players like Pomelo and Lazada will look to offline channels to reach new customers.

Pomelo dabbled in offline over the last few years but, fresh off a $19 million Series B financing round, recently launched its biggest pop-up to date in Siam Square, the fashion center of Bangkok. The store applies “click-and-collect”, enabling customers to order online and try items in store before deciding which ones to keep or return.

“In fashion, the number one barrier to purchase is still the need to try the product on for fit coupled with the hassle of returns. An offline footprint addresses this barrier head on. Additionally, customers can be acquired offline and data from online can be used to drive higher sales and greater operational efficiencies offline. In short, a mix of offline and online is the optimal strategy for fashion retail going forward,” said David Jou, co-founder and CEO of Pomelo Fashion

Love Bonito, another online-first fashion brand from Singapore, officially launched its permanent flagship store at Orchard Road after seven years of being an e-commerce pure-play.

Lazada, on the other hand, may follow Alibaba’s moves in China where the e-commerce juggernaut launched Hema supermarkets in Beijing and Shanghai. In addition to reinforcing a positive brand experience and customer acquisition, these new offline stores serve as fulfillment centers, effectively making up for Southeast Asia’s lack of logistics infrastructure.

Lazada Group CEO Max Bittner already hinted at the possibility physical stores in Indonesia at a conference earlier this year.

Over the last decade in China, Alibaba rode 50%+ year-on-year e-commerce growth to become what it is today, however, as maturation slows, Alibaba has doubled-down on initiatives like Single’s Day (11.11), “New Retail” (smart pop-up stores around China), and market expansion to accelerate sales (Southeast Asia).

Despite the region being projected as the next big e-commerce growth story, online accounts for only 1-2% of total retail today. If companies like Lazada and Shopee want to grow faster than the market allows, going offline will be the obvious choice.

4. New e-commerce startups will use ICOs to raise funding to battle giants

With Southeast Asia increasingly being carved up by giants such as Alibaba and Tencent in a presumed winner-takes-all-market, smaller e-commerce startups will look at alternative ways to finance themselves. Enter newly hyped Initial Coin Offerings (ICOs). Raising funds through these means in Southeast Asia was pioneered by Omise, a fintech startup based in Thailand, that successfully raised $25 million in a few hours to develop a decentralized payment system.

Given early speculation of Amazon moving into the cryptocurrency space, we’ll have fertile ground for our first Southeast Asian e-commerce ICO. Already a startup called HAMSTER is selling HMT tokens to develop a decentralized marketplace that promises “no fees, no brokers”.

Revolutionary e-commerce platform funded by ICOs or a Ponzi scheme?

Expect e-commerce startups to use ICOs to fund customer acquisition, new product development, and inventory financing. That is, until the bubble bursts…

5. A final wave of e-commerce consolidation sweeps through as local players adjust to a New World Order

We’ve shared numerous stories of casualties and consolidation during the Southeast Asian e-commerce bloodbath in our previous annual predictions. Japan’s Rakuten sold off most of its assets in the region when it retreated in 2015/2016. Rocket Internet dumped Zalora Thailand and Vietnam in a fire sale in 2016 and sold its Philippines entity to local conglomerate Ayala Group the year after.

In Thailand, Ascend Group put its assets WeLoveShopping and WeMall on life support to focus on fintech. In Indonesia, reports surfaced of SK Planet selling its Elevenia shares to Indonesian conglomerate Salim Group, which was quickly followed by news of its Malaysian entity up for bid between Alibaba and JD. Earlier in the year, Indonesia’s second largest telco Indosat Ooredoo shut down its e-commerce website Cipika. Alfamart, Indonesia’s second largest convenience store chain also had to downsize operations to pivot its e-commerce initiative Alfacart away from a general marketplace play towards an online grocery channel.

Come 2018, all eyes will be on the health of remaining bastions of home-grown, horizontal e-commerce plays. As Alibaba and Tencent up the ante, there will definitely be more casualties in the new year.

Opinions expressed are solely my own and do not express the views or opinions of my employer.

Huawei, Oppo, and Xiaomi came in the top 5, after Samsung and Apple, in the Southeast Asia region during Q3 2017, according to data from research firm Gartner. Among them, Xiaomi’s phone shipments grew nearly 80%, and the market share increased from 4% last year to 7% (in Chinese).

Huawei, Xiaomi, Oppo, and Vivo are the top four domestic smartphone makers in the third quarter in their home ground mainland China, and they started to get a grip of the Southeast Asian market in recent years. According to IDC data, Oppo accounted for the second-largest sales volume in 2016 with 13.2% market share, with shipments up 137.5% YoY. ASUS and Huawei each took third and fourth, with 5.9% and 5.1% respectively.

The latest figures from Strategy Analytics reported that in the third quarter of 2017, Oppo was the second largest market player in Southeast Asia with 17.2% market share, followed by the other Chinese mobile phone brand Vivo, taking 4.6% market share.

The report pointed out that global smartphone shipments in the third quarter to be able to achieve a 3% year-on-year growth, thanks to strong growth in Asia Pacific emerging markets and North American markets.

On the other hand, China’s smartphone market is shrinking. Comparing the third quarter figures for 2016 and 2017, smartphone sales in Greater China dropped from 32.3% to 27.9% in the global market, while the share of emerging markets in Asia Pacific rose from 19.1% to 21.3%.

Thailand may be an appealing top 2 travel destination for Chinese people, but now startups can consider expanding their business to this neighboring country as well. Chinese startups are eyeing Southeast Asia as the next market for their global expansion, and burgeoning Thailand is one of the markets to consider. To explore this booming market, TechNode has covered “Now In Vietnam” series, Indonesian market overview, and this time, we’ll look into Thai startup ecosystem.

Thailand market has seen remarkable growth over the past four years. In 2016, Thai startups raised funds of at least $86.02 million, including the three of the country’s biggest deals raised so far. It’s a global trend that we see more and more startups and fundings, and Thailand is no different. From 2012 to 2016, Thailand has gone from having less than 3 funded startups to over 75 funded.

Some of the rising Thai startups are:

• Builk.com is a very niche company in the construction industry, helping construction businesses manage their projects. The founder is a graduate in civil engineering and worked in construction for 10 years. He saw the real pain point of the industry and established the company. They have expanded to Malaysia, Laos, Philippines, and Indonesia.
• Ookbee is a digital entertainment platform that provides new opportunities for content creators in music, comics, ideas, and literature. Ookbee has pocketed $19 million from Tencent.
• Wongnai is the no.1 restaurant review site just like Yelp.
• Omise Payment is a payment management platform for businesses that raised $25 million on its ICO this year. Founded by Thai and Japanese co-founders, the startup raised $17.5 million in 2016 which is second highest funding amount last year.

There is also support for the startups from the Thai government driving this move. Under “Thailand 4.0” model, the Thai government is now planning to grant tax exemptions for startups similar to Singapore’s and adjusting ESOP (employee stock option plan) so that entrepreneurs can provide stock options to their employees. Currently, Thai startups are not able to provide stock options to new employees and Thai people prefer to work for big companies and other facilities that provide stock options. This regime is expected to attract more talents in startup sector.

TechNode interviewed Oranuch Lerdsuwankij, co-founder and CEO of TechSauce, Thailand’s leading startup media. She gave insights on how to enter Thailand market and a glimpse of the thriving Thailand startups. Here are six takeaways she gave us on the Thailand market.

1. Fintech sector is strong in Thailand: there are 14 startups backed last year

Fintech is one of the sectors we want to bring in new solutions. The key drivers are the banks and startups who disrupt the banking industry. There are four banks in Thailand, and they are now running accelerators, corporate VCs, and new subsidiary companies.

Those who make regulations are willing to listen from banks and startup community, and gather the feedback from them before starting or adjusting the policy. As an outcome, they started a fintech regulatory sandbox that enables fintech companies to experiment with innovative financial products or services in the production environment and approved standardized quick response (QR) code for electronic payment.

2. Alibaba and JD are investing heavily into fintech, e-commerce companies in Thailand creating strong competition among Thai startups

For big players from China, we’ll see more M&A and joint ventures in Thailand. Rather than competing with them, local Thai players will probably shift their focus to other niche sectors.

Alibaba’s financial affiliate Ant Financial is planning to acquire Ascend Money, subsidiary of CP group, the biggest company in Thailand that owns 711 and other telecom companies. Their partnership creates a big barrier to the newcomers. It’s good for Chinese tourists since they can use Alipay payment solution to pay for the merchandise in Thailand.

JD is in talks with Central Group to set up a $500 million e-commerce joint venture and expand to Thailand market. This is a great advantage for JD who has an online platform to strategically partner with the Central group who has both online and offline channels. Even before the partnership with JD, Central group already had one sharing knowledge platform that serves as a successful case study.

Chinese investment in Thailand creates more competition than collaboration. Southeast Asia’s e-commerce platform Lazada has received $2 billion from Alibaba and is controlled by them. If a Thai local player is strong enough, it’s  possible that they go through M&A or investment. But, it’s tough, so local companies should really focus on becoming the niche player.

3. Thailand is the top 2 destination for Chinese tourists, and Alipay and WeChat payment options are largely available

Alipay and WeChat payment options are largely available in Thailand. Central World, the largest shopping mall in Bangkok, big retail companies, and many merchants now provide support for Alipay. You can see many merchants in Chiang Mai, Phuket, and Pattaya also providing those payment options to Chinese tourists.

Tencent is also operating WeChat pay in Thailand. In Chiang Mai, the local merchants and SMEs now accept both Alipay and WeChat Pay to support Chinese tourists. They already acquired one of the largest Thai web portal Sanook Online, to operate music service JOOX, and other services on Sanook.com.

4. There are two types of Thai entrepreneurs

The first group has domain expertise, such as finance and construction. Some of the founders have studied abroad, worked with Google and Amazon, and come back to run their business. They are about 30 to 35 years old and have diverse experience in the industry. They are trying to use technology to solve a problem.

The second group is the new generation, who have just graduated from university and want to be young entrepreneurs and build their own companies. It is very important for the ecosystem to educate them in parallel.

Comparing the success cases, the first group can create more successful companies and promising startups, because a B2B focus is easier market than B2C.

Another factor is that big players have found they cannot do business alone. Five years ago, corporates stayed alone, but now there is more collaboration between startup and corporates. The first wave of these corporate VCs were telecom companies (2012-2015), the second wave was from banks (2016-2017), and the third wave is from manufacturing, energy, insurance and properties sectors (2017). So they set up accelerator programs, support startups, stay open for the partnership with startups.

5. Japanese companies and investors have had a big presence in Thailand, and now it’s Chinese players.

There are two generations of Japanese companies in Thailand. The first is from automotive industry such as Toyota, Honda. They set up the manufacturing company in province area 50 years ago, and they used Thailand as a hub for manufacturing.

In 2014 and 2015, the internet and infrastructure improved a lot, and we recorded high mobile phone penetration. We witnessed the second generation of Japanese companies setting up in Thailand. But we haven’t seen big movement from Japanese companies recently. Rakuten has stepped away from Thailand and the Southeast Asia market. They sold all their shares in Thailand’s largest e-commerce platform, so they do not have a presence here anymore. Last year, there were no big movements from Japanese internet-based companies, it’s because of the competition. However, Japanese VCs such as CyberAgent are still investing in Thailand.

In the last two years, we have seen big movement of Chinese companies like Alibaba, Tencent, making strategic movement in Thailand.

6. Tips for overseas startups when entering the Thailand market

Thailand’s mass market has high mobile penetration and internet penetration. Thai users are very tech-savvy, which makes it easier for SEA startups to target Thailand. Social media is big here, like Facebook and Line, so internet companies runs marketing campaigns on these platforms. That way, it’s not too hard for startups to reach out to these people.

The challenge is some services are not different from others if they cannot provide real value proposition, it’s easy to fail. For example, we have many dating apps. It’s not hard to acquire new users, but to gain loyalty customer, long-term customer, they need to differentiate themselves.

Overseas startups should understand the Thai culture. Thai customers are open to international services, but you should study Thai culture and behavior. Thai people are open to various cultures and have been influenced by Japanese, Korean, and Chinese culture. For example, we love Korean dramas, we are open to work with Japanese companies. We both celebrate Chinese new year, and Thai new year. In Thailand, English is not the main language, so content localization is very important.

For overseas startups wanting to start a company in Thailand, you have to get approval from Board of Investment. In terms of the government support and regulatory issues, it’s more flexible.

You should check the key players in the market, and think about who you should partner to accelerate the business and serve as a springboard for the company. For example, ofo has launched its bike rental service in Thailand. We see both ofo and Mobike launching in Thailand by partnering with institutes, universities and big enterprises.

So I advise them to find a country manager from Thailand who understands the behavior of Thai people. If you don’t want to test the market with so many partners, find a trustworthy local partner. If they don’t want to set up the company, you can allocate a representative as the partner, and their credibility is important. Once you want to work with them, you should find out the history about them, and get third opinion from local people in ecosystem.

Like the mobile payment industry, China’s gaming market is a highly cleaned-up field, where Tencent and NetEase take a dominating 70% of the market. Instead of diving into the competitive market, increasing domestic internet companies are turning their sights to Southeast Asia (SEA), a relatively untapped region that not only shares a similar culture with China but also has more relaxed control from the governments.

A recent report from market research firm Niko Partners further demonstrates the potential of this area by giving impressive projections for the market size. The combined PC online and mobile games revenue in SEA is projected to reach $2.2 billion in 2017, rising to $4.4 billion by 2021, the report pointed out. This forecast has been revised upward from last year, based on the strength of e-sports and new hit international games entering the SEA market.

The number of PC online and mobile gamers in SEA is projected to reach 300 million by the end of 2017, rising to more than 400 million by 2021.

Like elsewhere in the world, mobile games are recording a strong uptick in revenue, expecting to surpass PC games revenue in 2018. However, mobile games revenue is additive, not cannibalizing, PC games usage, the report added.

In the wake of globalization initiative of Chinese tech giants, several domestic companies have been accelerating their layout in the SEA region, including Alibaba Games, Perfect World, LineKong, and more.

Tencent has already established a foothold in the region with investment in Sea Limited, (formerly known as Garena) a leader in SEA for PC and mobile games operations and distribution. The company went public on last month in the US, raising $884 million in the IPO.

“E-sports has had a huge impact on the Southeast Asia region and is the primary driver for the explosive growth in PC online games. The heavy growth of the MOBA genre is a major contributor to mobile e-sports as well,” said Lisa Cosmas Hanson, managing partner of Niko Partners.

JD is in talks with Thailand’s Central Group about a $500 million e-commerce joint venture, according to Reuters. The talks are not yet public, but at an advanced stage according to the news agency’s sources. This would see the Chinese battle for the Southeast Asia market heat up considerably, with a focus shifting west from Indonesia where JD has been concentrating its efforts.

The news comes as no surprise. Back in June, JD chief executive Richard Liu told Reuters: “Thailand will come soon, before the end of the year. We will invest a lot and also find the best local partners to work together with. Everyone could be possible, but not Lazada.” This is because Lazada, Southeast Asia’s leading e-commerce platform, is controlled by China’s top e-commerce company and JD’s bitter rival, Alibaba Group.

To put the $500 million into perspective, Alibaba has so far put $2 billion into Lazada. In May this year, Tencent invested $1.2 billion in Indonesia-based logistics and payment startup Go-Jek last month.

The investment represents a shift in JD’s focus away from Indonesia where up to now it had been the recipient of almost all the group’s overseas investment. While Indonesia is widely held to be one of the great new frontiers—and JD itself recently missed out on a deal with the country’s PT Tokopedia—one of the Indonesia’s largest online marketplace.

Liu was bullish in tone when he spoke to Reuters in June. ”When we entered the e-commerce business 12 years ago … Alibaba was already a giant. It couldn’t kill us. How can it do so today?Unless we make some serious strategic mistake, no competitors can actually beat us nowadays.”

Central Group is an established name and one of the top five business groups in Thailand. Central has fingers in many retail pies; not just in Thailand but across Southeast Asia. The retail conglomerate has been operating for almost 70 years and has over 70,000 staff in Thailand in retail and real estate, then more stores overseas in Vietnam and Indonesia then hotels further afield and has even acquired department stores in Europe—Italy’s La Rinascente and Denmark’s Illum.

Cash has taken hundreds of years to establish its status as a common medium for trade, but it is quickly turning obsolete across China. Replacing it, the ubiquitous QR code-based mobile payment solutions operated by internet giants like Alibaba and Tencent.

From flagship stores of top-notch luxury brands to street butcher shops, payment through third-party apps is as valid as cash itself, only with faster and less of a hassle. Data from research institution iResearch shows that the value of China’s mobile payments market tripled to more than RMB 38.5 trillion ($5.6 trillion) in 2016 and is projected to reach RMB 55 trillion in 2017.

Now the same mobile payment craze that has taken China is making a foray into overseas markets. Alipay and WeChat Pay, the two third-party payment tools that nearly split China’s mobile payment market, are pushing the trend.

Who controls the tourists…

When tapping overseas markets, both companies chose the soft landing approach through easy entry points in Chinese outbound tourists. Known as the world’s most voracious spenders, 135 million Chinese outbound tourists spent a total of $261 billion in 2016, according to World Tourism Organization.

Like in China, the two firms are diligently forming local partnerships to promote themselves as a commercial solution. But the partners they are looking at skew toward those more commonly visited by tourists, such as airports duty-free shops, scenic spots, restaurants, and convenience stores.

Regions and countries like Hong Kong, Thailand, Japan, and Korea are the most popular destinations for Chinese tourists. They are also the places where Alipay record most active overseas usage, a spokeswoman from Ant Financial told TechNode.

Although tourist consumption remains the top priority in the overseas market, the companies behind them are moving towards local users through investment or partnership with local firms. Since 2015, Alipay’s operator Ant Financial invested a series of local e-wallet and fintech startups including Paytm (India), Kakao Pay (South Korea), Mynt (the Philipines), Ascend Money (Thailand), and HelloPay (Singapore).

“In the long run, synergy effects between Alipay and these firms would be created for sharing the technologies, data, users and consumption scenarios,” Andy Li, CEO of SEA fintech startup Silot, commented.

From Alibaba’s perspective, it’s more appropriate to define the initiative as the globalization of Ant Financial’s whole financial ecosystem, of which Alipay is just one part, according to the Ant Financial spokeswoman. Ant Financial expects half of its users coming from overseas market in the future four years, local media has reported (in Chinese).

On the other hand, social networking and gaming giant Tencent is also trying a similar path with investments in Australia-based cross-border payment startup Airwallex, shortly after Tencent co-founder Zeng Liqing invested in RoyalPay, another Aussie cross-border payment service April this year.

“Both Alipay and WeChat Pay are going after tourists first… In stage two, they will open up local wallets to enable peer-to-peer transactions within the local economies. That’s quite ambitious because there’s a lot of regulations,” commented Matthew Brennan, co-founder of China Channel.

“In order to enable that, they have to partner with local companies. It is a slow process in most places. In many countries, I think it’s most likely impossible. Tencent has local wallets in South Africa and Hong Kong. They are able to do it in South Africa because of Naspers, which is a key investor in Tencent. The same for Hong Kong as its so close to China. But every other country is challenging for them,” he added.

For Alipay in particular, it may encounter an extra hurdle from the local banking system. “Alipay may or may not be seen as a potential competitor towards the local banking system in overseas markets as Ant Financial’s domestic success in operation financial products have previously disrupted the traditional banking system in China,” according to Andy.

WeChat Pay plays catch up

Going for totally different markets that feature diverse market conditions and user preferences, internet giants may lose some of their competitive advantages and the secret recipe to local success may act as a hurdle in the exotic land. Only quick adapters to local markets could win.

As one of the earliest entrants to the market, the 13-years-old Alipay was practically the sole dominator in China’s mobile payment sector. It holds over 80 percent of transaction value across China three years ago. However, the app is quickly surrendering territory to a new rival—WeChat Pay. In Q1 2017, Alipay’s market share dropped to 54 percent, while WeChat Pay claimed 40 percent.

Born August 2013, WeChat Pay’s domestic success largely stems from the fact that it’s an extension of social networking and IM tool WeChat, which guarantees high-frequency use from users. On the other hand, Alipay, originally created to provide payment solutions for Alibaba’s e-commerce platforms, has lower usage frequency simply because it is needed only when people need to pay for something.

The red envelope war between WeChat and Alipay is a great example of how the rivalry would shape their relationship domestically. This same reason is also the driving force for Alipay’s endless endeavors to explore social networking features, although most of them failed to click with the users. But when exploring overseas markets where WeChat claims weaker presence due to competition from potent chat apps like Facebook, Twitter, and Line, its support in engaging clients and users for its payment unit is less effective.

“Going after payments rather than social [in the global market] makes a lot of sense for WeChat. The boat has already sailed in terms of social network for messaging apps globally. Facebook won that war,” Matthew says.

Given that, Alipay’s first mover advantages are more obvious after eying overseas for almost a decade. It’s being accepted in more than offline 120k stores in 26 countries across Europe, North America, East Asia, and Southeast Asia. WeChat Pay is now available in 15 countries and regions for payments in 12 currencies.

Despite these hurdles, some hold a more positive view on WeChat Pay’s prospect overseas. “The dynamics inside and outside China are very different. Inside China, Alipay started with a clear head start both online and offline. Outside China, it is very much a blank slate. The main question is which payment method are merchants going to pick. [WeChat] seems to be likely to win the race. But it has much to do with how well they keep marketing their payment solution to overseas merchants,” said Thomas Graziani, CEO of WalktheChat, a WeChat marketing consultancy.

“The main driver here is education. It takes a lot of effort to give overseas merchants a clear understanding of how to integrate either WeChat or Alipay to their existing system. This is the main hurdle to growth,” Thomas added.

The chicken or egg dilemma in Southeast Asia

Several reasons led to China’s mobile payment boom: wide network coverage, high smartphone penetration, and a surge in O2O apps. While infrastructure and prerequisites are all set, we can expect the mobile payment boom as a natural outcome. But when addressing overseas markets that are in various developmental stages, things are different.

“Fintech has experienced two development stages so far. The key words for the first phase are connectivity and enabler, where we set up the infrastructure of the mobile internet and mobile payment to facilitate the interactions between different entities. In the second phase, the keywords are big data and AI, where massive amounts of data are generated,” Andy Li told TechNode.

Overseas users often complain that the international version of WeChat is just a stripped down version of the Chinese original and this is often cited one of the reasons for WeChat’s international failure. For Andy, it’s hard to blame Tencent for this not only because it’s tons of work to negotiate new partners across the world, but also because the lack of local infrastructure in some under-developed regions, like Southeast Asia, has made it impossible to support some of the features.

Currently, Alipay and WeChat Pay’s overseas expansion are centered around East Asia and Southeast Asia, which turns out to be the first stop of most Chinese internet companies thanks to the similarities between China and these regions.

The tech landscape in Southeast Asia is very similar to China’s five to ten years ago when the infrastructure was still under construction. “Alipay and WeChat Pay’s promotion of mobile payment solutions in these areas is accelerating the construction of infrastructure. Now it’s like a chicken and the egg situation,” Andy pointed out.

Next frontiers: Europe, North America, and Australia

Meanwhile, Alipay and WeChat Pay’s head-on competition is expanding to more developed markets. Tencent launched WeChat Pay service in Europe this July, two years after Alipay rolled out its service in the region in 2015.

Both solutions entered US market through a partnership with local payment solution providers like First Data and CITCON. They are supported in some of the largest public spaces like Asia Art Museum, Pacific Gateway, and Caesars Palace. among others. Australia has recorded many new moves from both of the companies.

Developed markets have a solid foundation for mobile payment through using digital currencies and credit cards. But smartphone-based mobile payment that generates big data on location and user habits would still pose great potentials in these markets, Andy noted.

Ant Financial, the financial affiliate of Alibaba group, has announced a partnership with Fave, Groupon’s successor in Southeast Asia, to provide cross-border payment. The tie-up will first bring this service to Singapore.

Through this deal, Alipay users will be able to make payments via the Alipay app at restaurants and offline retailers that are part of the Fave ecosystem and gain special access to offers and rewards, much similar to its partnership with local O2O service providers in Chinese market.

Unsurprisingly, the service will first target Chinese outbound tourists to SEA, which is becoming an increasingly popular destination for Chinese travelers.

“Restaurants and offline retailers are the backbone of the economy in Singapore. . .  While more than 90% of retail spend is done offline, retailers are always looking for ways to reach out to mobile-savvy customers,” said Joel Neoh, former Groupon executive and founder of Fave. “Currently, millions of users across Southeast Asia use Fave to discover and transact at restaurants and lifestyle retailers. This win-win partnership with Alipay will give our retail partners in Singapore more revenue and more customers.”

Evolved out of Malaysian fitness subscription service KFit, Fave has been expanding rapidly over the past few years as O2O is becoming more mainstream. As Groupon fades, Fave is gradually claiming territories once owned by the group-buying giant. Fave has acquired the Indonesian, Malaysian and Singaporean arms of Groupon over the past one-year period. Regionally, the startup has more than 10,000 restaurants and offline retailers and has over 1 million active users.

In the wake of China’s O2O boom, the SEA market, which shares a lot of similarities with China’s tech landscape five to ten years ago, is quickly coming closer to parity, according to Neoh in a previous interview with TechNode. Mobile payment is no doubt an important part to complete the closed O2O service loop.

Although the companies did not mention partnership beyond Singapore market for the time being, we can take a guess that the link-up might quickly expand to other SEA countries given Fave’s presence across the area and Alipay’s ambitions in the region. Amid an escalating overseas expansion initiative, Alipay is now available in 27 counties worldwide.

• Why banks aren’t competing with each other but with other tech companies
• Why Southeast Asia may be Amazon’s Waterloo
• Why WeChat and WhatsApp have been so slow
• Why Tencent and Alibaba may team up

Links

• Analyse Asia
• Sean Konieczny: Jack Ma is set to disrupt e-commerce… again
• Emma Lee: These Ex-Baidu employees are connecting SEA merchants with mobile payment tools
• How to leave an iTunes review

• John Artman, @knowsnothing, TechNode
• Matthew Brennan, @MattyBGoooner, ChinaChannel

• iTunes
• RSS feed
• Music: “Theme from Penguins on Parade” by Lee Rosevere, Music for Podcasts 3

Check out this episode!

Alibaba Group is to invest almost another $1 billion in Southeast Asian e-commerce platform Lazada, bringing Lazada’s implied valuation up to $3.15 billion.

The two companies have released a joint statement to announce the the deal that will increase Alibaba Group’s stake from 51% to 83%.

Alibaba plowed $1 billion into Lazada in April 2016 to take a controlling share. The move was made up of $500 million in Lazada shares and purchased shares from other Lazada stakeholders, including Rocket Internet (the Frankfurt-listed incubator that invested in Lazada), Tesco, and Kinnevik. That made Lazada worth $1.5 billion at the time.

Rocket Internet announced today that it had sold its remaining 8.8% stake in Lazada to Alibaba Group for $276 million. In the April 2016 round, Rocket Internet sold a 9.1% stake to Alibaba Group for $137 million.

Oliver Samwer, CEO of Rocket Internet said in a statement: “Lazada has been a great success for us and is testament to our ability to support companies in Emerging Markets. Since the launch of the company in 2012 in Southeast Asia, Lazada has become the leading eCommerce player in the region.”

Lazada is the top online shopping and selling platform in Southeast Asia and operates in Thailand, Vietnam, Malaysia, Indonesia, Singapore and the Philippines. Unlike Alibaba in China, Lazada also operates its own first and last mile delivery operation as part of its offering.

The announcement comes the same day as unconfirmed reports that Alibaba Group is acquiring the telecommunications software division of ZTE, ZTEsoft, for between $294 – 441 million.

Forward thinking founders of Chinese breakout companies and Chinese VCs have been exploring and expanding their efforts in the Southeast Asia market. Indonesia, representing almost 40% of the economic output of Southeast Asia is attracting fresh investments and “SEA turtles”, the Southeast Asian returnees who had studied in top universities overseas. Some breakout companies founded by SEA turtles include Go-Jek, Grab, and Traveloka.

Chinese tech giants have tapped into the Southeast Asian market these years. Alibaba invested US$ 1 billion in Singapore-based e-commerce startup Lazada in 2016 and Tencent invested US$ 1.2 billion to Indonesia-based logistics and payment startup Go-Jek last month.

A newly established Silicon Valley fund is following the steps of Chinese money and is dedicated to co-founding and investing in early-stage companies capitalizing on the rapid growth of private consumption in the Indonesian market.

Previous backers of PayPal and SpaceX are founding an Indonesia-focused independent venture capital firm Intudo Ventures, and announced on June 13th, the closing of their first fund with more than US$ 10 million in funds. Eddy Chan (based in Silicon Valley) and Patrick Yip (based in Indonesia) are leading the fund, joined by founding advisor Timothy Chen (based in China, Hong Kong, and Taiwan).

We talked with co-founders of Intudo Ventures, Eddy Chan and Patrick Yip about the  5 reasons why Chinese breakout companies should head to Indonesia.

1. Indonesia is China 10 years ago

There was a window of time in the 2000s when the venture capital ecosystem was emerging in China, where “SEA turtles” were unique and had several distinct advantages over their local counterparts. Now Indonesia is China 10 years ago.

“We feel the Indonesian venture capital ecosystem is still emerging, making it ripe for SEA turtles to return to help build out best practices and infrastructure, which will allow them to capitalize the growth of the venture capital ecosystem. If they do not do return in the next few years, the window may have closed and they may be left on the outside looking in,” Eddy says.

2. Indonesia’s government support

Historically, the internet and physical infrastructure have proved to be a challenge in the Indonesian market.

However, improving Indonesian infrastructure is the top policy priority of the government, and has since made a concerted effort to improve this by upgrading the internet and physical infrastructure and supporting companies. In the 2016 budget, the Indonesian government led by President Joko Widodo earmarked the highest amount ever allocated for infrastructure development (approx. USD $22.9 billion) according to the World Bank.

The Jokowi administration has continued with many initiatives intended to increase infrastructure spending over the period to 2019, and the PWC report suggests that overall infrastructure will rise above the historical average of 5.7% of GDP.

3. Booming sectors: Travel, fintech, and education

China is now Indonesia’s largest tourist source, making 1.43 million trips to Indonesia in 2016, up 25 percent YoY, according to data released by Indonesia’s Central Statistics Agency. Fintech and education are also promising sectors to tap into.

“Indonesia is still a cash-based economy with adult credit penetration of 1%, so there are substantial opportunities in fintech. Education spending is a small portion of GDP, so we feel there is significant potential for online learning and other technical/vocational training,” Patrick says.

4. Rising middle class

In Indonesia, 58-60% of GDP is driven by private consumption and the rising middle class, mostly based in Jakarta. The GDP per capita in the Jakarta metro area is US$ 9,984 which is substantially higher than GDP per capita for the country of US$ 3,620. The percentage of middle class and affluent consumers in Indonesia will double to 141 million people by 2020 from just 74 million people in 2013.

“There are striking similarities to China’s consumer spending and venture capital ecosystem 10-15 years ago. We anticipate continued growth in e-commerce, F&B, fintech, and digital payment companies in Indonesia,” Eddy says.

5. Low cost and high efficiency

“Silicon Valley-based companies generally raise US$5-15 million in a Series A financing, which we feel is similar to China. In Indonesia, a company generally raises US$1-3 million in its Series A financing. We generally raise a US$2-4 million initial financing into the newly incorporated joint-ventures we set up for the breakout companies we bring into Indonesia from China, Silicon Valley, and other overseas markets,” Eddy says.

Editor’s note: This originally appeared on Analyse Asia, a weekly podcast hosted by Bernard Leong, dedicated to dissecting the pulse of business, technology, and media in Asia. The podcast features guests from Asia’s vibrant tech community.

Michael Smith Jr and Tiang Lim Foo, partners from Seedplus joined us in a conversation to discuss their recent closing of US$20M for their fund and where they are heading next. We also chatted about their daily lives as venture capitalists, how they worked with startups across Southeast Asia & India from market expansion to team management and their thoughts on the startup ecosystem with respect to profitability vs growth across Southeast Asia.

Listen to the episode here or subscribe.

Here are the interesting show notes and links to the discussion (with time-stamps included):

• Michael Smith Jr, Partner (@dreampipe, LinkedIn, personal blog) and Tiang Lim Foo, Operating Partner (@tianglim, LinkedIn) from SeedPlus Venture linked to Jungle Ventures.
  • Tiang: Can you talk about your background as the head of business development for Evernote in Asia Pacific [0:47]
  • Tiang: How did you end up in the venture capital? [2:25]
• SeedPlus [3:40] (@seedplus)
  • Can you talk about SeedPlus Venture Fund and its link to Jungle Ventures?
  • Recently, SeedPlus closed a US$20M fund, and what will be the verticals that the new fund be focusing on? [Note: the official closing for SeedPlus is at US$20M as Smithy mentioned in this podcast as compared to the news which reported it on US$18M.]
  • What will be the SeedPlus fund be focusing on? Where will you be deploying the capital? [5:28]
  • Who are the LPs to the SeedPlus fund? Cisco & IFC. [8:12]
  • What’s the daily schedule of a partner in SeedPlus like? [9:53]
  • Tiang: Specifically, what is your role as an operating partner? How do you advise startups? [13:23]
  • What are the difficult tasks that venture capitalists have to do with their startups? [15:23]
  • What are the startups in your portfolio? [17:55]
    • Moglix
    • AppKnox
    • Homage
    • Staack
    • Mimetic.ai
  • How do you think of Southeast Asia in the form of market expansion? [21:40]
  • With the recent acquisitions, the exits for Southeast Asia illustrated that the market value profitability over growth and traction, what are your perspectives in terms of looking at the startups in your fund? [23:38]

Editor’s Note: My apologies to Tiang on pronouncing his name wrongly on the episode summary & introduction on the show. It should be “Tiang Lim Foo”. 

TechNode does not necessarily endorse the commentary made in this program.

As China’s domestic market continues to develop, many of the country’s internet giants are beginning to look elsewhere for future growth prospects. As growth slows and the market becomes saturated, companies including Tencent, Alibaba, and many others are eyeing not just Southeast Asia, but also Israel, the US, and the EU.

To learn more, we talked with Hagai Tal, CEO of Tel Aviv-based mobile advertising company Taptica. He has invested, led and developed companies for growth, continued investment, and IPO/disposal, including Kontera, Amadesa, Payoneer, BlueSnap (formerly Plimus), and Spark Networks (NYSE: LOV). He is a Fellow of the third class of the Middle East Leadership Initiative of The Aspen Institute and a member of the Aspen Global Leadership Network.

How active are you in China?

We have an office in Beijing with around 10 people already. We are serving clients like Cheetah Mobile, Tencent and other big guys, like Alibaba. We help them first of all to find a channel for us to form a relationship with customers outside of China. So our biggest asset value will be helping those companies to figure out what to do when it comes to companies in the West. Sometimes we get involved in the content as well.

But the majority of our help is to help them to figure out which market is the right market for them. The Chinese market is an interest for us because we see the mobile proliferation in China. We see companies in China that have a lot of potential to grow.

In recent years, most of them are trying to grow outside of China, either through just distributing their content or buying companies outside of China. So we’re seeing a lot of activity coming from the Chinese market. And I have to say that in the recent years, also there’s some sort of matureness in the Chinese market, where in the past it was more a jungle, you know, everyone was trying to do different things. Now it’s becoming much more organized and there are more standards.

And there’s much more interaction between China and Western countries, so also the way of doing business and communication between both sides are becoming better and better. Payment terms are better, legal stuff is becoming easier to run.

What do you think is driving this shift?

Most of the companies we are dealing with are public. So I think the public market already gave them a high valuation and they’re all trying to find ways to continue to increase the growth or the keep the growth they have. They all understand that it’s probably outside of China that will be the best way for them to do it.

They all seem to hire people who have the language, buy companies who can give them the bridge to get those countries invested in money in order to try to market their products and fit their product to different market. When we go to the contracts, we see a lot of people knocking on the door and asking questions about how to get to users outside of China.

How is the Chinese focus on revenue growth affecting the global markets?

There are different ways of different stock markets around the world. You know, there’s NASDAQ everyone is looking at. We are a public company on London stock exchange. There’s also Chinese companies going public in China. Currently, there’s sort of an arbitrage between the valuation the company gets in different markets and different markets have different ways to measure a company. In London, if you have the EBITDA, then you can get the valuation whereas in China if you have the net profit, you can get the valuation. So there’s a big focus on the net profit.

Now, at the same time, the net profit of many companies, especially those in the gaming sector, in China is very high. It’s much higher than other places. So there is an arbitrage between the different markets. It means that on the mobile client, China is very high to companies in my space, that if we get approached by companies from China, we need to adapt or we need to see the same way that the Chinese are looking into the companies. And they do look at the net profit and because of that, we need to think about how to present the company in the net profit as well.

The Chinese, because of what we mentioned before, they need to keep the growth that they have. They need to buy companies. They need, if a Western company wants to be bought by the Chinese, they need to understand how the Chinese are looking into it. They can’t just compare with the EBITDA where they do it in London Stock Exchange, they have to look at the net profit.

It’s not so bad because the Chinese are looking at cash. Really how much money you’re generating, where the rest of the players are looking at the stories around it and the future potential.

How do you think this will affect companies that are attracting Chinese-led investment?

They’re not just looking for companies to buy, they’re also looking for management or people who can manage for them.

They’re not necessarily coming into the company and saying, “We know how to do it better than you, you’ve got to do whatever we tell you.” They see it a different way, they say, “We don’t understand all this. We want you to continue running the business.”

They want the management to stick around, they build the contracts around the composition of the management if they stick around. They have no interest in getting involved in the daily running of the business.

What about innovation? Will Chinese ownership affect the innovation of these companies?

I don’t think that statement is relevant anymore to the future. I think the Chinese are becoming innovators. You know, I saw these new bike-rental companies. I think this is great. This is innovation. I think the Chinese maybe have been copying in the past few years, but I think in the recent year or two, the Chinese have become more innovative.

You know, for us, we can’t be innovative only for the people who live in Israel because the market is too small. But for the Chinese, they don’t need to go so far. They need to look at their local history they have. And then if you look at the mobile devices in China, it’s innovative already. You know, I’ve gone to the conferences, I do think there’s been design in China already happening.

The culture gap between China and the west is getting smaller and smaller and we’ll see much more innovative people. I see Chinese starting to grow mostly in the US. They come back now to China. They can be a good group of people that can lead innovation in China.

What about problems in communication? Do you see that as a possible stumbling block?

In ten years’ time, we’re all going to be on the same standard. Whoever is not operating on the same standard will be left behind. Because Chinese companies need to compete globally, and not just with other Chinese companies, they will have to change how they communicate.

Editor’s note: This was contributed by Sheji Ho, the Group Chief Marketing Officer at aCommerce, an end-to-end e-commerce enabler in Southeast Asia. Currently based in Bangkok but having previously worked in China, Sheji writes about e-commerce, tech, the internet, and how Southeast Asia is the next China.

In his seminal presentation at DLD15, NYU professor and serial entrepreneur Scott Galloway coined the term “The Four Horsemen” to describe the four most dominant companies in digital that have a combined market cap of $1.3 trillion (2014). These companies are Amazon, Apple, Facebook, and Google.

Galloway’s Four Horsemen theory assumes a Western-centric view; the moment we move east, we start to see different pockets of power, most notably in China, and increasingly in Southeast Asia – the following are these differences.

Romance of the Three Kingdoms

China’s version of the Four Horsemen is called BAT, representing the three kingdoms in China – Baidu, Alibaba, and Tencent.

Baidu: The Search Giant

Often considered the “Google of China”, the bulk of Baidu’s revenues come from search advertising. Unlike Google, Baidu has struggled to stay relevant in an environment that has rapidly shifted towards mobile and e-commerce. Discovery on mobile is increasingly favoring apps over search – ask yourself, do you find yourself searching less on mobile than on the desktop?

And then there’s e-commerce. With the dominance of Alibaba, product searches are moving away from Baidu and straight onto Alibaba properties like Taobao and Tmall. The very same is happening to Google with over 55% of product searches now starting on Amazon and this is not even accounting for the damage Alexa aka Amazon’s next trojan horse may inflict on Google.

Alibaba: E-commerce & More

Alibaba is the king of e-commerce, responsible for over 80% of online sales in China (B2C and C2C combined). Over the last 20 years, Jack Ma’s empire has grown into one that puts even Jeff Bezos to shame. With expansion and investments in areas like advertising, health, entertainment and transportation, Alibaba is more than e-commerce nowadays. Its digital advertising business last year surpassed Baidu to become the number one in China in terms of net digital ad revenue share (28.9% vs. 21.3%) and is estimated to reach 33.7% by 2018 (vs. Baidu’s 17.6%).

Tencent: Gaming & WeChat

Tencent, the biggest among the BATs in terms of market cap – $300 billion vs. Alibaba’s $288 and Baidu’s $60 billion, 2017 – is best known for its popular messaging app WeChat. Its main revenue sources are gaming and value added services like virtual goods, etc. The company has dabbled in e-commerce since the early 2000’s until it gave up on organic growth and took an investment in Alibaba’s competitor JD. Today, Tencent is JD’s biggest shareholder with 21.25% ownership, surpassing the 16.2% stake of JD Founder and CEO Richard Liu Qiangdong.

Three Kingdoms become Four Horsemen

With the global rise of on-demand and ride-sharing, China’s Didi Chuxing has cemented itself as the fourth horseman in China. The company is the result of a civil war between Didi Dache (backed by Tencent) and Kuaidi Dache (backed by Alibaba) and the newly merged entity subsequently assimilated Uber China to become the third most valuable private company globally, only trailing Uber ($68 billion) and Ant Financial ($60 billion). Didi’s recent funding round of $5.5 billion values the company at $50 billion and gives it the ammunition needed to expand internationally and invest in self-driving technology.

With Baidu at risk of becoming the next Yahoo, many have looked at news reading app Toutiao to become one of the Four Horsemen in China. Launched in 2011, the company has benefitted from the mobile and vertical media wave in China to become one of the most prominent digital media properties in the country. Valued at $11 billion based on its recent $1 billion funding round, Toutiao is said to have 78 million daily active users and 175 million monthly active users with users spending an average 76 minutes on the app per day.

Southeast Asia: A Proxy War for Chinese Horsemen

The Southeast Asian tech space, despite being very nascent, has provided plenty of promising local successes to root for. There are Tokopedia and Go-Jek in Indonesia and of course Grab, Garena (which owns Shopee) and Lazada regionally.

However, if we look beneath the surface, we’re seeing signs of a looming proxy war between Chinese tech giants, with expected local casualties through collateral damage.

Alibaba made its big entry into Southeast Asia through its Lazada purchase, Jack Ma’s biggest international acquisition to date. Its ongoing tour-de-force has led many local e-commerce players to join forces (e.g. Orami) or throw in the towel (e.g. Ascend Group).

JD entered Indonesia organically in 2015 to test the waters and it is now said to be in talks to invest millions into Tokopedia. All this follows the news of Tencent, JD’s biggest shareholder, leading the recent $1.2 billion investment into Indonesia’s Go-Jek, valuing the on-demand motorbike startup at a massive $3 billion.

Then there’s Didi Chuxing, who, through its acquisition of Uber China, “participation” in the anti-Uber alliance, and a crisp $350 million investment in Grab should know quite a lot by now about operating in international markets and Southeast Asia in particular. Fresh off a massive $5.5 billion round, Didi may be going after its “allies” in Southeast Asia. What’s that phrase again? Keep your friends close and your enemies closer…

With an Alibaba camp (Lazada), a Tencent fraction (potentially Tokopedia, Go-Jek, and Shopee), and Didi Chuxing, there’s room for one more Horseman in Southeast Asia.

But it won’t be a Chinese company, the fourth Horseman in Southeast Asia is either going to be Facebook or Google, with my bets on the social media giant.

The whole Facebook vs. Google story in Southeast Asia deserves an entire article by itself but it basically boils down to:

1. Google’s assets are narrowed down to search-only due to the lack of long-tail publisher inventory in Southeast Asia, which is required for a thriving display ad ecosystem to compete with Facebook;
2. Southeast Asia is already mobile-first or, in some cases like Myanmar, mobile-only and fewer people are searching on mobile (same issue Baidu faced in China); and,
3. The rise of e-commerce in Southeast Asia is eating into Google’s lucrative product searches. Post-Alibaba acquisition, Lazada is set to replicate Tmall’s ad monetization strategy.It has already started recruiting for its Marketing Solutions team as seen from job postings on its site. Survey data from ecommerceIQ for Indonesia shows 57% of users start their online shopping journeys with product searches on marketplaces like Lazada and Tokopedia, bypassing the Google tollgates.

Why Southeast Asia? Not for the obvious reasons.

Why all this sudden interest in Southeast Asia from our Chinese neighbors? The obvious often reported, reasons:

• Geographically close to China;
• Huge, untapped market with 600 million people and a growing middle class;
• China’s economy is slowing down and the BATs are sitting on piles of cash to spend on (overseas) growth;
• Cultural affinity: Southeast Asia is home to the largest community of overseas Chinese (over 25 million across the region)

However, the main reason is that Southeast Asia–and with Southeast Asia, I mean emerging Southeast Asia (i.e. Thailand, Indonesia, and Vietnam)–is very similar to China about 10 years ago. This is especially true when we look at aspects like prevalent business models, digital advertising landscape, and mobile adoption.

Primary Business Model: Ad-Driven vs. Commerce-Driven

Whereas US companies’ de facto way of monetization is advertising, Chinese firms have historically looked at commerce and transactions as a way to generate revenues. The poster child for this is of course Tencent. In 2016, only 18% of Tencent’s revenues came from advertising, up from 9.5% a decade earlier. 71% of Tencent revenues came from value-added services (VAS), driven by online gaming, virtual goods sales, and digital music downloads. Compare this to Facebook, who generated 98% of its revenues from advertising in 2016.

Another more recent example is Quora, the unicorn Q&A app now worth $1.8 billion after its latest $80 million funding round. After 8 years, the best Quora could come up with are intrusive, text-based contextual ads that were pioneered by Google in…2003.

On the other side of the world, Fenda, a Chinese Quora/Reddit hybrid, has gone beyond advertising and built a $100 million business by monetizing transactions. TechNode explains how this model works:

“Users who are knowledgeable about a particular topic can set a price, usually between 1-500 RMB for their answers and get paid for answering questions from others. If they don’t reply within 48 hours, the money will be reimbursed to those who raised the questions.

In addition to connecting questioners and respondents in the Q&A chat interface, Fenda has an eavesdropping feature to engage more listeners. Anyone who is curious about the dialogue can listen to the reply for 1 RMB, which is split between the user who asked the question and the user who answered. After the completion of dialogue, Fenda will take 10% from the overall income from both parties.”

Non-Existent Long-Tail Publisher Ecosystem

At the very root of the ad-driven vs. commerce-driven dichotomy between the US and China (and increasingly Southeast Asia) is an immature online advertising environment, perpetuated by a “chicken-and-egg” problem of supply and demand issues:

Supply-Side Issues

Internet adoption in China and emerging Southeast Asian countries didn’t reach critical mass until the mid-2000’s. These markets skipped most of the Web 1.0 and “Web 1.5” booms and jumped straight into Web 2.0, resulting in digital content creation happening mainly on closed social media platforms like Facebook or on vertically-integrated portals like Sina and Sanook.

Unlike in the US, there aren’t millions of long-tail websites and blogs that form the basis for the many ad networks and programmatic advertising. To make things worse, closed platforms like Facebook and portals like Sina sell most (if not all) of their ad inventory direct to consumer, bypassing exchanges for higher margins. We call this phenomenon a “No-Tail” ecosystem.

Demand-Side Issues

The aforementioned lack of quality ad inventory has led advertisers to buy directly on big portals and closed systems like Facebook. As a result, the lack of demand for ad networks like Google Display Network in Southeast Asia has suppressed RPM rates (revenue per 1,000 impressions) for local ad networks, providing little incentive for content creators.

In turn, content creators have found other ways to monetize. In Southeast Asia, peddling merchandise to your Facebook and Instagram audience has been one of the most popular and lucrative ways to make money. In Thailand, this has led to estimates of 33% of e-commerce GMV coming from social commerce. In China, content creators are leveraging WeChat and increasingly live video apps to sell merchandise and generate revenue off virtual goods transactions. Meanwhile, in the US, the de facto ways for bloggers to make money is still to create content and monetize through AdSense and affiliate marketing.

Mobile-First, Mobile-Only

The other striking similarity between China and emerging Southeast Asia is that both are mobile-first and in some areas mobile-only. Granted, some coastal areas in China developed pre-mobile era but given the size of China, many people are still coming online and these are mobile-first or mobile-only.

Unlike in the US, new startups in China are frequently building for the mobile user first then later expanding to desktop users. Fenda started out on WeChat followed by its own apps and website while Toutiao started out as an app.

In Southeast Asia, e-commerce players like Lazada already see over half of their orders coming from mobile. Indonesia’s BaBe, the country’s leading news aggregator app backed by China’s Toutiao, followed a similar path to its majority investor by taking a mobile-first approach.

Learning From Past Mistakes

All of these ecosystem similarities mean that Chinese companies entering Southeast Asia will have a higher chance to succeed.

It’s not the first time that Chinese BATs have ventured abroad, winding up with mixed results. Baidu announced its international expansion plans as early as 2006, launched in Japan with Baidu.jp in 2007 then later shut it down in 2015 after a lack of traction.

This time around, Alibaba, Tencent and perhaps Didi Chuxing are hopefully smarter and are more confident playing on familiar grounds–Southeast Asia.

Southeast Asia’s tech landscape shares so many similarities with China’s of five to ten years ago with its maturing internet infrastructure as well as a swift transition to smart and mobile devices. No wonder a plethora of Chinese companies are flocking to the Southeast Asia market in an attempt to duplicate their domestic success in growing Southeast Asian destinations.

Along with this trend, not only internet giants like Xiaomi and Alibaba are targeting at the market as a means of business expansion, but also Chinese startups who find huge possibilities in the area are developing products solely for the territory.

Silot, a fintech startup based in Beijing and Singapore, is one of the companies that is leading this trend. It develops loyalty exchange programs and regional settlement networks across Southeast Asia and other emerging markets. The startup provides settlement and payment solutions as well as marketing and campaign services.

Andy Li, former deputy general manager of Baidu Global Payment, has more than a decade of working experience in internet industry across the Asia Pacific region. After witnessing the fintech boom in China and the disparity between different markets, Andy started Silot with his Baidu teammate Bryan Sun, who now works as CTO.

“Fintech has two development stages. The key words for the first phase are connectivity and enabler, where we set up the infrastructure of the mobile internet and mobile payment to facilitate the interactions between different entities. In the second phase, the keywords are big data and AI, where massive amounts of data is generated,” Andy told TechNode.

Silot is completing the first phase for emerging markets by setting up the infrastructure. Through connecting review-based apps like Dianping and local merchants, the Silot Loyalty Exchange Program offers customized and accurate push promotions by matching the users’ purchasing preferences and merchants’ offer with machine learning and data technology.

“We are running a B2B business, which links merchants and/or banks with online apps such as promotional apps, delivery apps, marketplace apps, etc. We help merchants to match online users to their business nature by linking them with online apps & e-wallets,” Andy said. “With our big data technology, we are able to generate customer personas to help merchants understand better about their customers.”

“Although there’s an increasing demand for third-party payment services, most of the merchants in Southeast Asia don’t have financial accounts, even if they do, they are accounts of traditional banks, which can’t offer additional values,” he adds.

This is exactly what China experienced a few years ago when the O2O closed loop hadn’t been created, Li pointed out.

Currently, Silot has partnered up with several leading payment solutions and banks across the region. It’s loyalty exchange partners connect the offline merchants with the apps from different countries.

The startup’s system is free of charge for clients so far. In the long-term, it plans to generate revenue from memberships and key accounts on a marketing performance basis.

Apart from startups, China’s investment institutions are also looking into the trend. ZhenFund, China’s reputable angel investor founded by renowned tech guru Xu Xiaoping, just invested in the seed round of Silot, its first portfolio company in Southeast Asia market. “Silot plans to start our next funding round in the next quarter.” Li disclosed.

Li wants the team to stay focused on Singapore and Thailand first before extending Australia, Malaysia, and Indonesia for later on.

Li gives several reasons for choosing Singapore as the pilot market before expanding globally.

“The Singapore government is very friendly to startups with many attractive supporting programs,” he says. “More importantly, Singapore as a financial center is a great place to build settlement related business with full spectral support from its regulations to infrastructures.”

Another reason for the decision is probably the quick rise of fintech in Southeast Asia market. The area saw the greatest number of fintech deals in 2016. Of the total 71 investment deals closed in the year, over half of them went to Singapore-based startups.

This is the second post of “Now in Vietnam“, where TechNode visits Vietnam’s leading companies, to explore the next startup ecosystem to emerge among Southeast Asian countries. Vietnam’s GDP growth could surpass China by 2020 according to Turicum Investment Management. 

Vietnamese startups saw a 46% rise in investment in 2016, valued at $205 million. Vietnamese startups are strong in fintech and are getting global attention. Vietnam can serve as an optimal market for foreign startups, as it has 97.5 million population, most of them young and tech savvy.

Startups flock to Vietnam’s main cities, Hanoi, the capital city which has 7.5 million people, and Ho Chi Minh, which has 8.4 million population.

Some investors were quick on tapping into this market. IDG Ventures has focused on Chinese investments since the early 1990s, investing in Tencent, Baidu, Xiaomi, Ctrip, Meitu, and Sohu. Since 2004, Vietnam is the third country to get their attention after the US and China.

“IDG Venture’s founder saw a lot of Vietnamese students in MIT, and thought he should start the Vietnam fund,” Truong Nguyen, Vice President of IDG Ventures Vietnam, told TechNode.

Global financial startups

Vietnam is now seeing more startups offering universal products globally from day one such as tutor on-demand service GotIt! and graphic design platform DesignBold. Some Vietnamese startups start by expanding to their neighboring South East Asian countries, such as edtech group Topica or restaurant review media Foody,

Meanwhile, local market-focused platforms like e-commerce, payment, content, games have been getting larger funding up to tens of millions USD in various rounds. One of the first investments of IDG Ventures Vietnam was VNG, pocketing a series A investment in 2005. The company, offering its flagship chat app Zalo, was valued at US$ 1 billion and has since secured US$ 100 million in revenue. MobileWorld, Vietnam’s largest mobile retail chain is listed on the HCM City Stock Exchange, reported that their total revenue in 2016 is estimated at around US$ 70 million.

“The market will see more mature larger deals like VNG and MobileWorld in the future. Smaller startups have been catching up with most of the trends in the world, and Vietnam is a perfect market to introduce new products and services,” Truong says. “I see some of the early trends of Vietnamese startups going global, and more companies are focusing on areas like fintech, edtech, and IoT.”

Fintech is a sector in Vietnam to keep your eye on: startups raised US$129 million in 2016, greater than the combined value of all other sectors, according to Topica Founder Institute’s report. Many Vietnamese fintech companies have received a good sum of funding from international investors in the last two years. M Service, the company behind the mobile e-wallet Momo, raised US$ 28 million in March 2016 from Goldman Sachs, Payoo, providing intermediary services for e-commerce platforms was funded US$ 2 million and was acquired by NTT Data, E-pay’s 62.5% stake was acquired by Korea-based UTC Investment for $34 million and OnOnPay, top-up tool for prepaid mobile subscribers received a US$ 800,000 investment.

IDG Ventures Vietnam is now focused on startups in technology, media, and consumer services and products.

“Among TMC industries, the internet sectors, such as mobile services, media content, e-commerce are the very strong potential areas where many founders with great entrepreneurship and experience can tackle. They have gone through a roughly 15-year-long experience of fast development in these sectors in Vietnam,” he says.

A young market

Vietnam has a younger workforce, with its 65% of the population under the age of 35. By 2021, 15.5 million new consumers aged 10-19 years will enter the market, according to TNS VietCycle.

“Vietnam with its favorable demographics of the young population, increasing middle class, and tech-savvy consumers has been a strong consumer market, labor market, and tech market with users very open to new product trends,” Truong says.

Vietnamese people are entrepreneurial, as they often invest and trade USD and gold, and bet on things. In fact, the Vietnamese consume more gold on average than Indians, Chinese, and Americans.

Many Vietnamese start their business after establishing a career in their field and studying in overseas countries. According to IDG Ventures Vietnam, the common thing about successful Vietnamese founders is first, they have studied abroad. Second, the average age of them is older than 28, older than US or Japan counterparts. Third, they needed 5 to 7 years to bring their business to a successful level. Fourth, they had been in the executive position before they started the company.

Opportunities to expand your startup to Vietnam

Vietnam may not be the first port for expat entrepreneurs, but it could turn into the ultimate startup hub for the Southeast Asian market.

For startups, Vietnam can be a great test bed, without having to spend too much money to sustain the business. Vietnam is growing bigger as a consumer market, as its GDP is now US$ 2215 expanding with GDP growth of 6.21% in 2016, among the highest in the world.

Once startups get funding, the burn rate is lower than other Asian countries, meaning the company can last longer with its investment than in other Asian countries. This gives less burden for the founders since its labor, living cost, and marketing cost is cheaper.

Ant Financial, the financial affiliate of Chinese e-commerce giant Alibaba, announced on Wednesday a strategic partnership with Indonesia’s second largest media firm Elang Mahkota Teknologi (Emtek), in its latest efforts to expand its presence in overseas mobile payment market, local media is reporting (in Chinese).

Under the agreement, the two parties will set up a joint venture company to develop mobile payment solutions and provide digital financial service for the users in Indonesia.

Emtek is a leading media and Internet company in Indonesia, with its operation ranging from national TV stations to film and TV production and C2C e-commerce platforms.

Ant Financial was lured by the growth potential of the Indonesian market whose smartphone user population has topped 100 million, ranking fourth in the world.

Ant Financial is replicating and creating its success in mobile payment outside its home turf. Since the end of last year, the firm has sped up its expansion abroad, especially in southeast Asia, where the e-commerce market there was estimated at US$5.5 billion in 2015 and US$87.78 billion by 2025.

The firm has been in search of new engines of growth as the domestic market is starting to mature after white-hot development, with a focus on cross-border offline payment business and inclusive finance services (financial services for individuals and small and micro-sized businesses).

It announced in February a US$ 200 million investment in South Korea’s Kakao Pay, and also clinched deals with Philippines’ fintech service Mynt and Thailand’s payment firm Ascend Money.

Ant Financial and Emtek plan to launch a payment platform on the BlackBerry social messaging system (BBM), which has gathered 63 million monthly active users in Indonesia. BBM, claiming itself to be the most popular messaging app in the country, has been operated by Emtek’s unit since Emtek partnered with Blackberry last June.

Ant Financial’s tie-up with Emtek may pose a threat to Chinese internet giant Tencent, which has made its own expansion initiatives as well. Tencent teamed up with Indonesia’s largest media firm PTGlobal Media com in February 2013, to cash in on the booming social media market there. Tencent’s WeChat has reportedly become the fourth (in Chinese) popular messaging service in Indonesia in 2014, according to Andi Ardiansyah, consul of Indonesian Consulate General in Guangzhou, in an interview.

Editor’s note: This was written by Kayla Matthews, a freelance writer focusing on technology and online media. You can find more of her work on VentureBeat, MakeUseOf, Motherboard and Gear Diary. 

If you’ve kept up with global news recently, maybe you’ve noticed a huge increase in Chinese companies moving into Southeast Asia. Let’s take a look at why those investments are advantageous for China and the nations of Southeast Asia, and then explore a few Chinese companies that have made meaningful transitions into neighboring territory.

China Wants to Increase and Maintain Its Economic Might

One of the most prominent reasons for the Chinese expansions is that China wants to keep its economic strength in the world. It has achieved the world’s second-largest economy but the country’s currency, the yuan, has been weakening.

Some analysts think the weakened yuan is an intentional move to encourage more exports. However, the weaker the yuan becomes, the harder it’ll be for China to buy up overseas assets. It’s likely these Chinese expansions into Southeast Asia will continue over the short term as a flurry of activity.

Remarkable Economic Gains for Both China and Southeast Asian Countries

The expansions won’t just positively impact China, though. For example, a partnership known as the Belt and Road Initiative brings economic gains to China and 10 Southeast Asian nations associated with the Association of Southeast Asian Nations (ASEAN).

As of May 2016, the total two-way investments between China and ASEAN countries were the equivalent of over $160 billion. Also, bilateral trade increased from $7.96 billion in 1991 to $472.16 billion in 2015.

China Will Facilitate Infrastructure Improvements

One of the main ways China will assist countries in Southeast Asia is to improve their respective infrastructures. To get things started, China has established three financial institutions that collectively have hundreds of billions of dollars in capital.

The money will go toward making new high-speed rail lines. Ordinarily, nations from Southeast Asia, with the exception of Singapore, have encountered major challenges with building new infrastructure or improving what’s there. Funding from the newly established financial facilities could change that.

Indonesia will get its first nationwide high-speed rail line. While Southeast Asia benefits from better rail networks, China can take advantage of additional opportunities to network with neighboring countries to seek out investment possibilities or strengthen existing connections.

Southeast Asia May See More Visitor Traffic

Travel and tourism analysts say Chinese investments in Southeast Asia may also be advantageous for the cruise industry. Chinese tourists want warm-weather options, and experts say destinations in Southeast Asia like Singapore are excellent places for them to take cruises.

Southeast Asia is home to 600 million people, and some experts say it’s a viable market because people there are ready to take cruises. Provided good progress is made, Chinese investments might soon include mutually beneficial cruise companies that cater to individuals who are ready for relaxing times away from home.

Now that we’ve explored why so many Chinese companies are deciding to move into Southeast Asia, let’s look at a few prime examples of success stories, particularly in the tech sector.

Why is it important for that segment of the marketplace to continually expand into new areas? Tech companies now face global competition from growing third-party services like Amazon and Ebay, as well as authorized tech resellers, forcing them to do what they can to set themselves apart from competitors and win over long-term customers. That’s just one of many reasons why companies seek new territory that’s also often close by.

Xiaomi

This leading Chinese smartphone manufacturer announced intentions to begin expanding worldwide several years ago. It started by selling its products in Hong Kong and Taiwan in 2013 and then made its first move into Southeast Asia via Singapore in 2014.

Last fall, the company picked Singapore as the place to launch its first store. Known as Mi Home, the store is at Suntec Mall and sells things like Bluetooth speakers, power banks and of course, smartphones.

Tencent

The maker of the mobile messaging app WeChat, Tencent Holdings is a Shenzhen-based company that recently announced plans for a joint venture with Ookbee, a digital content-creation business, to find Southeast Asia’s next internet stars.

Tencent Holdings has joined forces with an internet service provider in Indonesia to try to make the most of the web sector there and provide access to some of the country’s 249 million inhabitants. The company also got involved with a deal to produce videos in Thailand.

This new project sees Ookbee potentially gathering over a million pieces of online content over the next three years. There are also reportedly no limits on the kind of content Ookbee might want. The company will experiment with video and may also become interested in text-based books, comic books, and music.

Alibaba

Alibaba is a massive Chinese e-commerce company that many business experts see as a rival to Amazon. More than one-third of Southeast Asia residents are tech-savvy and use smartphones, so the company thought it could find success there. Also, the business was intent to move into the region and assert dominance since some people say Alibaba’s marketplace business model is more suitable to Southeast Asian consumers than what Amazon offers.

The Chinese e-commerce venture will have to adjust to cultural and language differences that are common to the countries it has expanded into. Plus, some countries in Southeast Asia have severe traffic congestion issues, which could make deliveries more difficult. The preferred method of payment in the region is cash upon arrival, and Alibaba will have to account for that, too.

To begin the expansion, Alibaba made its biggest overseas investment to date when it finalized a $1 billion investment deal with Lazada, a privately owned e-commerce company that already has a presence in six of Southeast Asia’s e-commerce markets. In a year, Alibaba made gains throughout Southeast Asia in decisive ways, particularly in logistics, and even online grocery delivery.

Thanks to this overview of an ongoing investment trend, you won’t feel in the dark the next time someone asks you if you’ve heard about a Chinese company that’ll soon break into the Southeast Asian market. It’ll be interesting to see how long the momentum continues, and the short- and long-term impacts it has beyond what’s been discussed here.

Chinese internet giant Tencent has branded its wholly owned subsidiary Sanook Online, a leading Thai web portal, to Tencent (Thailand).

Sanook started in 1998 as a Thai-based web directory and gradually developped into an all-inclusive entity with businesses ranging from web portal (Sanook.com), news portal (NoozUp), music-streaming (JOOX), IM (WeChat), and e-commerce (Sabuy).

Sanook.com claimed over 30 million active monthly users, while JOOX has amassed 22 million users, the report citing data disclosed by the company. To bring these figures into perspective, Thailand’s internet population is 41 million as of June this year; the country has around 68 million people.

Tencent already holds a 49.2% stake in Sanook through a 81.7 million HKD (10.52 million USD) deal completed in October 2010. Different from strategic investments, Tencent is playing a hands-on role in the management of the Thai company with seats in the board. As the local partner, Sanook runs WeChat and JOOX, the in music-streaming platform backed by Tencent, in Thailand.

Tencent Thailand will focus on three businesses in the future: news portal business led by Sanook Online and iPick, entertainment and multimedia by JOOX and Tencent Games, and services by Top Space, an advertising agency, according to the local media report citing Managing Director Krittee Manoleehagul.

As the domestic market has become saturated, the battle among Chinese internet companies is expanding to Southeast Asia market, the first stop for their global expansion. Tencent’s arch-competitor Alibaba is also aggressive in the region with investments in e-commerce platform Lazada, PayTM, and third-party payment service Ascend Money.

The entry of heavy-pocketed Chinese internet giants may lead to fiercer competition for local startups, but on the bright side, the trend will also bring lots of positive effects.

“It’s encouraging to see a lot of similarities between China and SEA. Our current landscape is very similar to China’s of five to ten years ago. For this reason, we expect China to play two key roles for SEA startups: as a provider of strategic capital and as a knowledge-sharing partner”, Joel Neoh, founder of Malaysia’s top gym pass and O2O company KFit, said in a previous interview with TechNode.

Image Credit: Tencent Thailand

This post is updated on 17:55 December 28th to clarify that Sanook has been renamed to Tencent (Thailand) as of December 19th, 2016 rather than an acquisition.

Along with the globalization drive of Chinese companies, China is having a greater influence on the rest of the world as a marketplace, a foreign investor, and more importantly, a source of innovation. Southeast Asia (SEA), a densely populated region that’s expected to foster the next unicorn, is among the areas that are feeling these impacts.

Thanks to geographical adjacency and cultural similarities, SEA has become the first stop for Chinese companies when expanding abroad with an increasing number of Chinese firms like Huawei, Alibaba and Xiaomi are taking their foothold in the region. But what, if anything, will SEA startups gain from this boom?

TechNode got a chance to speak with Joel Neoh, CEO of KFit and former head of Groupon Asia-Pacific, to hear from the other side of the story. Malaysia-based KFit is a gym pass and O2O commerce platform that offers subscribers cheap health options and other offline services like salon and spas. As a hit startup in the region, KFit has marked a series of milestones this year. After securing a 12 million USD series A round this February, the company acquired Groupon Malaysia and Groupon Indonesia earlier this year.

What does China mean for SEA startups? 

China is significant because it has really laid the groundwork for startups in SEA. As frontrunners in online-to-offline (O2O) commerce over the past decade, Chinese startups have evolved into ‘tech giants’ in the world’s largest developing market. They’ve proven that there is a massive growth opportunity in countries with fast-developing infrastructure and rising middle-class income levels.

It’s encouraging to see a lot of similarities between China and SEA. Our current landscape is very similar to China’s of five to ten years ago. For this reason, we expect China to play two key roles for SEA startups: as a provider of strategic capital and as a knowledge-sharing partner.

I see a huge opportunity for China to partner with us as we develop the SEA commerce ecosystem through popularizing high-frequency use cases, such as restaurant payments on online platforms, and other means. We are currently exploring collaborations that will help us capitalize on fast-improving infrastructure and growing mobile penetration across the region to serve SEA’s vast population.

The O2O model is in full swing in China. KFit launched Fave earlier this summer to pioneer the O2O trend in SEA. What were the obstacles you faced in localizing this model for local market?

Benefitting businesses and consumers alike, our O2O platform is already proving its worth in SEA. It successfully generates increased sales for offline businesses (such as restaurants, spas, movie theatres, gyms, and so on), while also offering great savings and convenience to consumers. To date, we have sold over 5 million online vouchers for offline businesses in Indonesia, Malaysia, and Singapore.

For us, the key aspect to localizing this model is to have a deep understanding of the language, culture, consumer habits, and regulation in each country we want to serve. There is no shortcut to this knowledge; we invest a significant amount of time and energy in each of our markets. We work with teams of local experts who understand local merchant requirements and who know local consumers and how best to appeal to them.

What tech trends coming from China do you think would have potential to grow in the Southeast Asia market?

I think there’s huge potential for the ‘consumer internet’ and everything related to it. By this I mean businesses that offer services, products, or content to capitalize on the growing consumer class and the growth of internet and mobile adoption. There are also promising opportunities for large companies to support digital commerce through better and more convenient payment solutions.

As we continue to build our O2O platform in SEA, we see a big opportunity for local services. Even more than transportation or physical goods e-commerce, this sector holds great promise due to how frequently people use local services. At this point, the market is still pretty fragmented and no single player dominates. However, the rapid development of the mobile wallet in SEA will further expedite the adoption and development of O2O local services. This is creating a gap in the market that we hope to close.

As the economy in China slows down, India, being backed by developments of SEA, is expected to overtake China as the next innovation hotspot. How are your views on this?

Like China, both India and SEA have a huge consumer base and growing technology adoption. With a combined population of almost 2 billion people, India and SEA have to be a significant piece of any technology giant’s globalization plan.

India, in particular, has greatly benefited from an influx of global investors. The market is currently the ‘sweet spot’ for China’s BAT companies: the ‘big three’ of Baidu, Alibaba and Tencent. All three are very active in India, with Alibaba investing in Paytm and Snapdeal, Tencent’s Hike and Practo, and Baidu-backed Ctrip investing in India’s largest online travel agency MakeMyTrip.

SEA is currently at an earlier stage of the cycle. For example, in 2015, total investment in Indian startups was USD 9 billion, compared to USD 1.6 billion for SEA startups. So while SEA is quite far behind India in terms of funding today, we foresee that SEA will be the next region to hit an upcycle.

Google, Amazon, and Microsoft for the U.S. Baidu, Alibaba, and Tencent for China. What about the tech giants in Southeast Asia? How does the dominance of internet giants impact local entrepreneurial environment? 

The tech giants of the US and China have led the tech world to where we are today. For example, China’s BAT have together played a crucial role in educating the market and spearheading growth in the tech industry over the past decade. Local startups benefit from the ecosystem that these ‘big three’ have built.

In SEA, the more well-funded startups like Lazada, Gojek, and Grab are burning cash and investing time and effort into educating the market about e-commerce and mobile payment. Many startups and growing platforms, like Fave, will benefit from the efforts of these trailblazers to popularize online payment. SEA is still an open market at this point, with a few companies with the potential to grow into the SEA equivalent of one of China’s BAT companies. That’s something we at Fave are aspiring to.

Most disruptive startups attract customers by providing more convenient or cheaper services. The early explosive growth is usually reliant on highly-subsidized models – that’s the case for China’s Didi Chuxing and several others. When the company stops providing subsidies or discounts, they risk losing customers. KFit has just discontinued the offer for unlimited classes for more sustainable profits. How do you balance this?

The core value proposition of our O2O platform is convenient savings for customers and increased sales for businesses. This was our underlying aim when we started, back in April 2015, helping consumers save money and get fit while also supporting gyms and fitness studios to increase sales and gain customers. After signing up more than 65% of all gyms and studios in our key cities in SEA, we are now expanding the same value proposition across new verticals, such as dining, health and beauty, and entertainment. The acquisition of Groupon Malaysia and Groupon Indonesia allows us to integrate millions of customers and thousands of merchants into Fave, achieving greater scale of impact.

In terms of the high-subsidy business model, we must remember that the subsidy is strongly correlated to competition; it’s a factor when competitors are backed by funders with deep pockets. And this is not yet happening in O2O local services in SEA — especially as our largest competitor, Groupon, is now part of our business. As the early market leader in this space, we’re now prioritizing growth in order to establish our position and ensure we dominate the market in terms of users and supply. In the platform business, there is no room for more than two players and so the fight for market position is intense. Once you become a dominant player, you can set sensible prices and increase profits.

Any tips for Chinese startups that are aiming to expand into the Southeast Asian market? 

My best advice for anyone aiming to grow in SEA is to find or invest in a local partner. If you’re already considering a local partner to help you avoid the pitfalls of doing business in our diverse region, try to partner with an individual or company with a strong entrepreneurial spirit. You need someone who can be very nimble and react quickly in order to win in this market. In general, I’d say the SEA startup scene is ‘fast eat slow’ rather than ‘big eat small.’

There is a rise in the number of Chinese entrepreneurs born in the 1980s to 1990s. As a part of this generation, what are your views on the rise of young entrepreneurs globally?

I believe there is rebirth of renaissance thinking among Chinese entrepreneurs of this generation; they believe that they can win globally as well as locally. Better education and global exposure over the past 10 to 20 years, coupled with passion, hard work, and strong ethics have increased the confidence of Chinese entrepreneurs, encouraging them to compete with the rest of the world and build winning global companies.

Image Credit: KFit

While Chinese venture capitals feel winter chill, the Southeast Asian startup scene rather looks optimistic. Silicon Valley venture capitals who once targeted China or India are now increasingly setting their eyes on Southeast Asia. 500 Startup, praised as one of the leading Silicon valley VCs investing in the region, is now boasting its own unicorns such as Singapore-based ride hailing app Grab as fruits from local investments into more than a hundred startups with its 25 million-dollar fund, named Durian Fund, raised in June, 2014.

Mainland-based VCs are also poised to target assets in this fast-growing region and are making aggressive expansion. Gobi Partners which was born in 2002 in China and entered SE Asian market in as early as 2010 recently launched a $14.5 million fund dedicated to early-stage SE Asia startups, partnered with Malaysia Venture Capital Management Berhard (MAVCAP), the country’s largest venture capital firm. This was after Gobi Partners successfully finished their $50 million USD fund for Series A investments.

Why are Chinese VCs investing in SE Asia?

“Most of firms in Asia are still heavily focused on China and India, so Southeast Asia is a gem for early-stage investors as it has yet to reach the hype levels of China and India’s startup markets,” Kay Mok Ku, the Singapore-based partner at Gobi Partners said, during the talk at TechCrunch Beijing 2016.

According to Ku, there are three main incentives for Chinese VCs to invest in SE Asia. First is for diversification of investment portfolio that otherwise would be too focused solely on Chinese market whose saturation is expected to come sooner or later. So, by investing in startups in SE Asia region, the portfolio gets much more diversified which effectively lowers the risk and creates room for potential synergy between SE Asia and Chinese startups. Another incentive is the market conditions in SE Asia. Southeast Asia’s intenet economy could worth as much as massive $200 billion annually within ten years according to a new report released today by Singaporean sovereign wealth fund Temasek and Google and furthermore, region’s population is not only big but also relatively young which brings huge potential for entrapeunership. The last but not least, SE Asia has less competition, compared to Chinese market where intense competition is evident.

On top of that, for Chinese-born VCs, SE Asia is a region that feels closer to home. Indeed, current status of Southeast Asian market recalls what Chinese market was like ten years ago. And this means its development may also follow the footsteps of China. “A lot of services and Apps released in SE Asia often resemble the successful ones in China. In SE Asia, with less innovation and less risk, it is possible to yield successful cases in SE Asia.” said Adrian Li, the managing partner at Convergence Ventures.

As a matter of fact, at this very moment, population of about 600 million people, many of whom are under the age of 40 are entering the internet economy via low-cost Chinese smartphones. “With young generation becoming much familiar with many of new trends, using China-born, silicon-valley-born Apps, the technology gap between China and SE Asia is disappearing.” Ku emphasized.

Challenges of investing in Southeast Asia

Although SE Asia investment scene is looking rosy, practical challenges faced by the ones already jumped into the region do exist. The two main challenges are as follows.

1) Fragmented market
Southeast Asia consists of six different countries, each using different language and embodying different culture. Because of this, it is hard for a particular startup to penetrate their platform markets of neighboring countries. For instance, as reported by the survey by consulting firm Bain & Co. released in April, the region’s e-commerce platforms, while being well-funded, have been struggling to grapple with disparate languages, regulations and consumer preferences that varied largely from country to country. Jeffrey Paine, the founding partner at Golden Gate Ventures, confessed that SE Asia is, unlike India or China, very hard to expand although its size is about a quarter of China. This challenge places a greater importance on localization ability of the service and requires a more strategic movement when expanding cross border, for example, acquiring a local firm just as Tencent bought Sanook.com, the Thailand portal and Alibaba bought Lazada, the Singapore-based e-commerce firm.

2) Deal size
While SE Asia market is evidently vibrant, size of the investment deals closed in SE Asia actually are relatively smaller than what we often see in China market. “It’s still quite hard to raise a Series B, C or D round, and the size of the average round is not as big as people expect. In China, there are cases where tens of millions of dollars is raised for a seed round. But, this kind of huge deal is not very rare or even none in Southeast Asia.” Ku commented. Therefore, when considering the SE Asia investments, size of the deals should be distinguished from those in China. “In Indonesia, Series A are between $1.5 million to $3 million,” Adrian Li added.

However, Chinese investors and Chinese IT giants do not seem deterred by such challenges. According to a survey by law firm Herbert Smith Freehills, acquisitive Chinese corporations are eager to follow Alibaba’s lead in making presence in the region. More than 45 percent of Chinese sizable corporations surveyed identified their top priority to pour their money into over the next three years as SE Asia.

The strategies of SE Asia investment vary from company to company. Some are entering in a form of investment/acquitision just as Alibaba acquired Singaporian e-commerce platform, Lazada, while some are more aggressive in launching their products in this market by setting up local teams. “Baidu has set up a local team and released a completely local product specifically for Indonesian market,” Adrian Li said. JD is another Chinese company that is pushing relatively agreesively into this region and already set up the local team for ‘localization’ of their service.

The fact that the number of Mainland VCs being bullish on SE Asia is increasing with speed and more and more Chinese companies are devising strategies to pierce into SE Asia proves the potential of Southeast Asian market to be real. “There will soon appear a Southeast Asia-born unicorn and sooner or later an IPO in US exchange.” Jeffrey Paine answered in an assertive tone to the question of how he sees the SE Asia market in three years. However, due to challenges, both expected and unexpected from this yet immature market, it is hard to forecast where the next unicorn will be bred out from.

Eva Xiao from TechNode continued our discussion on Xiaomi, focusing on what kind of company Xiaomi truly is, and the current challenges they are facing to justify their US$45B valuation. We discussed the company’s recent failures to hit their 100 million smartphones target, their loss of smartphone market share, their failure to expand aggressively into international markets such as U.S and India, and their bet on Internet-Of-Things and consumer electronics. We conclude our conversation with where Xiaomi might be in five years time.

Download MP3 here (20.1 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

Notes:

• Eva Xiao, Reporter at Technode.com
  • Xiaomi has a reputation as the “Apple of China”, even though their business model in China is much more similar to that of Amazon (with its focus on software services) or Dell, etc. Exactly, how should one perceive Xiaomi as a company – are they more hardware or software? [1:10]
    • Most of their profit is still from hardware (94% smartphones, 11/2014)
    • Innovative business model: flash sales, customer feedback, local supply chain (Foxconn, ‘made in India’), save on advertising, relies on WOM
    • livestreaming from Lei Jun to leak Mi Band 2 and Mi Max
    • Their ability to sell online (cut costs)
  • Business models with software as a service for Xiaomi with in-app purchases. [2:55]
  • Where is the current footprint of Xiaomi across the world? They have expanded to India and Southeast Asia, and avoided US on a whole (though recently they did partnered with Microsoft on patents and software productivity services) [5:31]
    • Singapore, Malaysia, Philippines, Indonesia, Thailand, India, HK, Taiwan, China, Brazil
  • How is Xiaomi different from competitors, such as Huawei and Oppo? [8:15]
  • Xiaomi has a strong fan base in China and other parts of the world –  can you explain the demographic of Xiaomi users?
    • younger users
    • low-middle market
  • Who are the key investors of Xiaomi? (Ref: Crunchbase) [9:15]
    • Ratan Tata from Tata Group – India, Robin Chan.
    • IDG Capital, Shunwei Capital, Qiming Venture Partners, Morningside Group, Qualcomm Ventures, Temasek Holdings
  • Xiaomi has also made investments in startups. What are the key categories of their interest and important startups we should watch? [10:42]
    • hardware incubator (Huami, Zimi, Yunmi)
    • Media and content recently: Iqiyi, Hungama, Blue whale media (online business media startup)
  • Can Xiaomi live up to its US$45B hype? [13:32]
    • They have not done well in 2015 with expansion in India and Southeast Asia, reaching only 70-80M target for sales as compared to the 100M target, what happened?
      • saturating smartphone market in China
      • Huawei sold 100 million smartphones in 2015, 3rd largest smartphone maker after Apple and Samsung
      • Competition in developing markets: Lenovo, Huawei, OnePlus, Meizu
      • Betting too much on IoT ecosystem [15:30]
    • Xiaomi’s reliance on contract manufacturing compared to Huawei  [16:50]
  • Xiaomi faced an onslaught from Huawei and other smartphone makers such as Oppo, which disrupted them from the low end. In addition, Xiaomi is unable to compete in the high-end space, compared to competitors like Samsung or even Apple with the iPhone. Where do you see them going in the smartphone space? [17:50]
  • In your opinion, what are Xiaomi’s current priorities and where do you think that they will be in 5 years time? [18:53]

Patrick Rona, the Chief Digital Officer in Asia Pacific from the McCann World Group, joined us in an interesting conversation about connecting with youth in Asia. Drawing from the McCann World Group’s recent study “Your Toughest Audience? Connecting with Youth”, we discussed how the youth market is defined, their habits and characteristics, and the behavior and aspirations of youth in Asia as well as around the world. In this episode, we also reviewed social platforms that are dominating Asia’s youth market, such as QQ and Snapchat, and discussed the best practices for brands to engage with this customer group.

Download MP3 here (31.9 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

Notes:

• Patrick Rona, Chief Digital Officer – Asia Pacific, McCann World Group
  • How did you start your career in marketing? How did it lead to your current role? [1:22]
  • Rona’s role in the McCann World Group [3:10]
  • What are some interesting career lessons that you have learned? [3:55]
• “Your Toughest Audience? Connecting with Youth” [6:37]
  • How is the research report put together? [7:06]
    • Based on global research sample: 33,000+ interviews, 32 markets, 120+ focus groups. The research is specifically for markets in APAC and includes Japan, Korea, China, India, Hong Kong, Philippines, Australia, and Thailand. The study covers people ages 16-30 but today we’re going to focus on 16-20, or “Generation Z.”
  • When we talk about youth, who are we talking about? [8:41]
  • What are some characteristics of youth today? [10:04]
    • 25% of youth has sent out a “sext” message
  • What are some of interesting observations on the youth market as a whole? [13:55]
    • Characterization of today’s youth as “super-species” in the evolutionary biology context [14:18]
  • How does today’s youth use mobile smartphones? [16:09]
    • Making voice calls
    • Sending Texts
    • Sense of smell vs having a smartphone
  • How do older and younger millennial define their real persona vs their social persona? [18:25]
  • Are youth habits similar across US, Europe and Asia, barring certain cultural nuances? [20:15]
  • What are the rules for youth on social media, specifically youth in Asia where messaging apps include QQ, WeChat, and LINE?  [21:22]
    • Unwritten rules on how to behave in social media [21:45]
      • Don’t look like you are trying too hard
      • Look like you are having fun
      • Don’t over-edit your pictures
    • The Instagram / Finstagram (Fake Instagram) phenomenon – kids today setting up 2 accounts [24:20]
  • What are some best practices for brands to engage with youths? [28:50]

Headlines on artificial intelligence typically belong to globally renowned tech giants, such as Google, Facebook, and Apple. Asia’s AI and machine learning startups, on the other hand, rarely make it onto the world stage.

“I want a world-competitive AI company coming from Asia,” says Tak Lo, the Managing Director of Zeroth, a funding program for early-stage AI and machine learning startups in Asia. “[Part] of that is taking Asian startups and being able to support them from a global network of entrepreneurs.”

Zeroth, which launched on July 1st, is a three month funding program that offers mentorship and $20,000 USD in capital to early-stage startups. The team is still working out its application process but plans to launch its first batch this winter. Though Zeroth will accept startups from any AI vertical – “Surprise me,” says Mr.Lo – the program is stricter in its focus on Asia. Relevant startups outside of the region are welcome to apply, but for the most part, Zeroth’s emphasis is on Asia.

Part of that is personal. “[I wanted] to kickstart the Hong Kong tech community,” says Mr. Lo, who is a Hong Kong native. “Hong Kong is a blank space because it’s so behind [in tech], [but] by being a blank space you can draw whatever you want on the whiteboard.”

“I’m very, very serious [about] trying to bring everything that I’ve learned to Asia,” he adds.

Mr. Lo, who was previously Director of Techstars, a global startup accelerator, is also eyeing the city’s angel investors. Currently, Zeroth is still raising funds from investors in the U.S, the U.K, and Hong Kong.

In China, tech giants such as Baidu and Alibaba are seen as the leaders of artificial intelligence and machine learning. Baidu, for example, has its own artificial intelligence research lab, which is headed by renowned machine learning expert Andrew Ng, previously an associate professor at Stanford University. Ant Financial, the financial arm of Alibaba, is partnering with Beijing-based startup Face++ to incorporate facial recognition technology into its mobile payment system, Alipay.

However, Zeroth is betting on Asia’s local startups. The program hasn’t explored any partnerships with Asian tech giants, though it’s open to them. For now, Zeroth’s main focus is on recruiting companies and mentoring them. Tech expertise is also a top priority, which is unsurprising given Zeroth’s focus on AI and machine learning. The program has filled its team roster with seasoned AI tech entrepreneurs, such as Jaan Tallinn, the co-founder of Skype. Even Zeroth’s name is tech-related – “zeroth” refers to zero-based numbering, which is used in computer programming.

Other startup programs, such as TechCode, a Beijing-based startup incubator, are also digging into a growing AI and machine learning industry. According to estimates by Bank of America Merrill Lynch, the global market for robotics and artificial intelligence systems is expected to be worth around $153 billion USD by 2020.

Image credit: Shutterstock

Raghav Kapoor, CEO and co-founder of Smartkarma, joined us for a conversation on his company and a broader conversation on fintech in Asia. Drawing from his experience and background in finance, Raghav talked about the origins of  Smartkarma and his vision to build it towards a premium collaborative research marketplace. We also discussed the emerging fintech industry and the important observations and trends that distinguish Asia from the rest of the world.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Raghav Kapoor, CEO and co-founder of Smartkarma
  • How did you get started in your career?
  • From your career in the equities research business until now, what are the interesting career lessons you can share?
• Smartkarma
  • What is the mission and vision for Smartkarma?
  • What is the problem that you are trying to solve as a premier collaborative research marketplace?
  • Who are Smartkarma’s customers?
  • As a multi sided marketplace, how does insight providers and partners operate within your platform?
  • Which are the institutions who has signed on as contributors?
  • What is the revenue model for the platform? Is it similar to Spotify, as the platform is known to be the spotify of Asian research?
  • You have recently raised a total of US$7.5M, who are the investors and how did you pull it off and what will you be doing with the investment?
• The Fintech Industry across Asia Pacific
  • How does someone define fintech in Asia now?
  • What are the ongoing trends in the fintech industry?
  • Everyone talked about the banks being disrupted, what is the underlying problem from your view?
  • In the research insights business, a lot of people talked about the softening economy in 2016 from the recent China equities crash to some countries entering into technical recessions, instead of asking you how bad it is going to get, I like to ask what are the interesting opportunities you see coming up?

Ant Financial, the financial affiliate of e-commerce giant Alibaba, is planning to acquire a 20 percent stake in Thai third-party payment company Ascend Money, according to an announcement made by China’s Ministry of Commerce last Wednesday.

The investment was proposed by Ant Financial’s Hong Kong-listed payment unit Alipay (Hong Kong) Holding Ltd. In addition, the Chinese company is also seeking an option to increase its stake by a further 10 percent within 21 months of the transaction being finalized.

Ascend Money, a newly established unit of Ascend Group, is the parent company of online payment service True Money and licensed financial services provider Ascend Nano. Ascend Group is a spin-off from True Corporation, a top-three telecom carrier in Thailand.

As the dominant payment platform in China, Alipay has long set its sights on overseas market to maintain high-speed growth beyond domestic market, where it is facing tightening competition from Tencent’s rival WeChat payment.

Last year, Ant Financial invested over $500 million USD in India’s largest online wallet provider PayTM, which now holds an online banking license in the country. The Chinese firm also helped launched online bank K Bank in Korea with local partners, but due to government restrictions the company still only holds a 2% in the joint venture.

Ant Financial sealed a $4.5 billion USD B round this April at a market valuation of over $60 billion USD.

Alan Soon from the Splice Newsroom and Rockstart Accelerator joined us in a conversation about the media business in Asia. Drawing from his experience in media businesses such as Bloomberg, CNBC, and Yahoo!, Alan offered his perspectives on how the media business has changed across Asia over the past two decades. We discussed business models and how the industry is segmented in Asia, and discussed trends that are emerging in China and India. Last but not least, through our observation of new media businesses such as Vox, Buzzfeed and TheInformation from the US, we analysed whether these new models would work in Asia.

Download MP3 here (39.3 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Career of Alan Soon, Founder & CEO of The Splice Newsroom, Managing Director of Rockstart Accelerator Singapore and former Yahoo Managing Editor for India + Southeast Asia & Country Manager, Singapore
  • How did you get started in the media business?  [1:05]
  • From an illustrious career in traditional, mainstream media to digital media, spanning across Channel News Asia, Bloomberg, CNBC and Yahoo!, what are some interesting career lessons you can share? [2:06]
  • How did you manage to pivot from printed and broadcast media to digital media? [3:20]
  • Why did you eventually decide to set up the Splice Newsroom? What is the motivation behind the company and what does it do? [5:20]
• Media in Asia Pacific [6:40]
  • How has the media business changed in Asia Pacific in the past decade, transitioning from mainstream or printed media to digital media with search engine and social media in the past decade? [6:59]
  • How is the media industry segmented in Asia? [8:08]
  • The challenge of talent in the media industry. [8:50]
  • The interesting trends with media in Asia [9:40]
    • TVF Viral in India – satirical videos with India celebrities and recently received VC money.
    • Zhibo – Video livestreaming phenomenon in China with added e-commerce transactions.
    • Papi Jiang funded by Zhenfund. In the U.S., social media celebrities do not get any VC money.
  • What are the business models in media that work in the Asia media scene and how do content makers interface with business owners? [12:40]
  • Will digital paid TV advertising work in Asia with e-commerce transactions as the new model? [14:10]
  • Wirecutter as an example for content site making reviews with affiliate advertising. [14:50]
  • Mogujie’s WeChat account in China, with fashion articles driving e-commerce transactions.  [15:32]
  • Do ad blockers or downstream advertising make the media business less viable in Asia? [16:20]
  • Where are the core drivers for media business in Asia? [17:38]
  • How does the localisation of the media factor into the media business specifically in Southeast Asia and India? [19:26]
  • One of the major challenges for media in Asia is regulation of media by governments. In your experience with Yahoo!, what is your advice on how digital media outlets to navigate the government when it comes to controversial content? [20:21]
  • Very few startup media outlets have been successful in reaching scale in audience distribution, why is that so? [23:38]
  • Does the media business focus on discovery or curation? [24:50]
  • Which form of media are successful in Asia – rich text, audio or video? [26:29]
  • Are the costs of production for media going down given the rise of platforms such as YouTube, Periscope? [27:53]
  • Can investigative journalism work in Asia given the production costs are not going down? [29:10]
• Emerging Trends & Mapping new media business models to from US to Asia [30:00]
  • Recently, the more successful media brands such as Vox, Buzzfeed and subscription-based media such as TheInformation, Techpinions and Stratechery by Ben Thompson, which target niche audiences, are becoming popular. Can these concepts be mapped to the Asia market? [30:13]
  • Are there challenges in the business models of these media? For example, Asian consumers prefer not to pay for content. [35:44]
  • With the rise of walled gardens such as Facebook and Medium and rise of ad blockers rendering advertising insignificant as a revenue stream, how does media outlets navigate these constraints to be successful? [37:00]
• What’s next?
  • Alan has stared his new gig with Rockstart Accelerator soon. What is his role for the accelerator? [40:55]

Charles Reed Anderson from IDC joined us to discuss the state of Internet-of-Things (IoT) in Asia Pacific. We started with an analysis of the IoT market maturity index across China, India, and the rest of Asia Pacific, and dissected how Asian companies are currently prioritizing their objectives with IoT. In our review, we dived deep into the state of wearables, with the healthcare industry looking to be a new market opportunity for many Asian tech giants such as Samsung. Last but not least, we looked at what’s next from now until 2017.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Charles Anderson, Vice President, Head of Mobility and Internet of Things Asia Pacific, IDC
• Internet of Things: What’s hot, What’s Not, and What’s Next
  • What has been happening in the first half of 2016 for the IoT market? [1:20]
  • Overview of IoT so far
    • 8.6 billion connected “things” and a $508 billion market opportunity by 2019: What are these 8.6 billion things and what are the market opportunities? [1:58]
    • How does one assess IoT market maturity by 2019? How are Asian countries assessed on the IoT market maturity chart based on IoT units/capita? Which countries will break out in the next few years? [2:42]
    • For China, how does IoT market maturity vary across different tiers of cities? [4:55]
    • What did we see back in 2015 and where are we now in the first half of 2016? [5:41]
      • Skills shortage in the region
      • Nobody is writing blank cheques
    • From now until the next few years, how does one make the reality check for IoT deployment in Asia Pacific? [6:40]
  • What’s hot? [7:35]
    • What does the public see and what has been delivered in the IoT space? [7:35]
    • Which are the top 5 Asia Pacific IoT use cases? [9:49]
      • Increase productivity
      • Improve product quality/time to market
      • Process automation
      • Cost Reduction
      • Faster/better decision making
    • How does that contribute to operational excellence? [11:15]
      • 12% of Asia Pacific enterprises see IoT as an opportunity for revenue generation.
      • 8% of Asia Pacific IoT initiatives were internationally focused in 2015.
    • Where are the Asia Pacific IoT initiatives focused on in 2015?
    • What factors hinder IoT solutions in Asia Pacific? What kind of challenges must they address? [12:34]
      • Is security really a concern?
      • Conflation of security and privacy. [14:01]
    • Who holds the budget in the decision making process? Which groups are driving the IoT solution decisions? [14:41]
    • Why do Australian and Singaporean business units own the IoT budgets as opposed to companies in China, where IoT budgets are owned by the technology team?
  • What’s not?
    • Let’s start from wearables. We see Fitbit not doing well in the public markets. Why is that? [16:18]
    • What are the next waves for wearables? [17:54]
      • Samsung’s Simband [18:28]
    • Is healthcare the real opportunity for wearables growth? [18:50]
      • Example of Bosch where the operations team use smart watches in cold weather. [19:05]
    • What are the different approaches to shift the conversation from what’s not to what’s yes for IoT? [19:41]
  • What’s next? 
    • An interesting case: Demand Logic’s focus on smart buildings. [20:52]
    • What are the interesting technologies in the IoT horizon? [22:05]
      • IoT at the edge [22:16]
    • How does one establish the business case for IoT? For example, smart meter costs?[22:47]
    • What keeps Charles awake at night on the movement of IoT? [25:00]

Josh Horwitz from Quartz joins us in a discussion on Apple’s recent decision to invest in China’s largest ride hailing app, Didi Chuxing and the implications for Uber in their plans to conquer China and the rest of the world. We move beyond the obvious reasons, such as managing their diplomatic relations with the Chinese government, and dive into Apple’s preparation for their entrance into China similar to other automotive makers. In this episode, Josh also takes us through the intricacies of the Chinese government’s regulations of the transportation industry. Last but not least, we also discuss the power players behind Didi and Grab and how traditional “old” money are boiling into technology startups in Asia.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Josh Horwitz, Writer from Quartz
  • What interesting news has Josh been covering in Asia recently? [1:12]
    • Alibaba is buying not building its way into Southeast Asia
    • Netflix faces rivals in India and Southeast Asia that are better adapted to local realities.
    • A brief history of Chinese accounting shenanigans in America.
• The On-Demand Transportation Wars [2:09]
  • Since our last conversation, what’s the status of the industry’s dominant players? (Uber, Didi, Ola and Grab/Go-Jek) [2:28]
  • Grab and Go-Jek founders share a common story [3:30]
  • Uber vs Google Waze: What happened when self-driving cars met on-demand transportation? [4:38]
• Apple’s US$1B investment into Didi and Didi vs. Uber in China [8:34]
  • Why did the deal happen? What are the possible reasons? [8:58]
  • Is Apple’s investment in Didi really an investment into its own future?
    • Does Didi need Apple? [13:22]
      • A symbolic appeasement with the Chinese government or a way to buy “guanxi”?
    • The Chinese government has regulated the automotive industry since the 1980s and places strict restrictions on automotive OEMs with a 50:50 joint venture.  [15:30]
    • Example of 50:50 joint ventures in China’s automotive industries: car companies with state owned enterprises in China. For example, Ford has a joint venture with Changan [17:00]
    • How Apple plans to enter China by leveraging a partnership
      • What does Apple gain from investing in Didi? Counter example: Tesla is facing problems in China without a partner to sell their electric cars. [19:11]
    • Didi used a varied interest company (VIE) business structure similar to Alibaba – how does that affect its partnership with Apple? [20:00]
    • What does this mean for Uber in the online transportation wars? [24:20]
    • The power players behind Didi vs. Uber and Grab [27:14]
      • Didi: Who is Jean Liu who did the deal with Tim Cook from Apple and Wei Zheng, founder and CEO of Didi? (she’s the daughter of the Lenovo founder, Liu Chuanzhi).
      • Uber China: Liu Zhen, director of strategy, is Jean Liu’s cousin.
      • Grab’s Anthony Tan is the grandson of the founder of Tan Chong Motors, which owns the exclusive distribution to Nissan, a Japanese automotive company.
      • Jerry Yang is an adviser to Uber and did the deal with Alibaba when he was the CEO of Yahoo! [28:50]
    • Uber and leasing out cars and controlling the supply chain [29:51]
      • Is Grab doing the same thing as Uber in controlling the supply chain with their competitive advantage with Nissan through Tan Chong Motors?

Arnaud Bonzom from 500 Startups continued our conversation on his two interesting reports (prior to the 500 Corporations report which we discussed earlier) that focus on the Singapore startup ecosystem and funding trends across Asia Pacific. We discussed the key observations and funding dynamics of the Singapore startup ecosystem with the recent focus on fintech and the who’s who from entrepreneurs, investors, major corporations to government agencies. Last but not least, we discussed how funding trends are changing in Asia.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Arnaud Bonzom, Director of Corporate Innovation @ 500 Startups
• Singapore Startup Ecosystem & Entrepreneur Toolbox Report [1:12]
  • What is the motivation behind building this report? [1:16]
  • Who are the intended audience? [2:12]
  • What are the key observations about the Singapore startup ecosystem? [2:57]
  • What are the funding dynamics and trends in the Singapore startup ecosystem from accelerators to fintech?  [4:00]
  • What are the key observations on the Singapore startups (Sparks, Rising Stars, Stars, Unicorns)? What are the exits? [6:09]
  • Who are the key people you should know in the ecosystem?
  • What are the key events and groups that one should connect to in the Singapore startup ecosystem?
  • What are the incubators and accelerators in Singapore ecosystem? Where do they work out from, for example, co-working spaces?
  • The Singapore government is definitely one of the main stakeholders in the ecosystem. Can you give a comprehensive overview of the ministries, agencies and foundations that they have?
  • How does an entrepreneur within Singapore recruit talent? What are the challenges faced?
  • What are the work permits and passes to allow the individual operate in Singapore?
• StartintX Index on Asia Pacific Funding Trends
  • What is the motivation behind StartintX?
  • What are the key findings in your first report on Asia Venture Capital?
  • What are the interesting comparisons across China, India and Southeast Asia ecosystem?

Sameer Singh from Tech-thoughts.net joined us to reflect on major themes that have been ongoing in the technology space from messaging apps to self-driving cars. In the first part, we discussed Facebook’s recent F8 announcements on their new chatbots platform and video livestreaming. From there, we analyzed the implications of Facebook’s announcements and examined how it will impact Asia from video advertising to messaging apps, thus foreshadowing an upcoming showdown between Asian messaging apps, such as WeChat and LINE. Finally, we dissected the different business models behind artificial intelligence companies and how they will play a role in the technology space from the US to Asia.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Sameer Singh from Tech-thoughts.net [1:10]
• Facebook F8 Announcements and its impact to Asia [1:31]
  • What are the major themes from recent Facebook F8 announcements? [1:41]
    • Video Livestreaming
    • Chatbots
  • Does the F8 announcements impact the company from the near term, middle term or far in the future? [3:07]
  • What are chat bots and how do they work? [3:29]
  • Conversational UI vs Asia Messaging Apps in Asia: WeChat, LINE and Kakao Talk. [4:25]
    • How are they distinguished from apps on mobile? [4:30]
    • Wechat Official Accounts and how it distinguish from Facebook’s conversation UI [6:10]
    • Why did Facebook adopt conversational UI instead of adopting Wechat’s platform approach? [7:15]
    • Watson from IBM as an example of chatbot on banking sites in Asia [7:50]
  • What’s the path to victory for chat bots and apps? [10:30]
  • Why do Facebook use chatbots where the UI is not working in the emerging markets? [12:00]
  • Messaging app as a platform vs conversational B2C communication. [13:50]
  • The weakness of Asia messaging apps with artificial intelligence. [16:22]
  • What is Facebook is doing in video and live streaming? [16:45]
    • Facebook Videos: Live Fast, Die Young (Source: TheInformation)
    • Implications to Facebook livestreaming to video advertising and virtual reality. [21:50]
• Artificial Intelligence [22:52]
  • Artificial intelligence are entering into devices and products, for example, iPhone – Siri, Echo – Alexa, Google – Google Now, Baidu.
  • How does business leverage AI as part of their business model? [23:32]

Jon Russell from TechCrunch joined us to discuss Rocket Internet’s $1 billion USD exit to Alibaba and its impact to e-commerce and funding cycles in Southeast Asia. We dissected the implications from the Lazada exit and the continuing movement of Rocket Internet spinning off their other assets such as Zalora and Foodpanda within the region. We also discussed the next stages for startup ecosystems affected by Rocket Internet over the past few years. Last but not least, we discussed the future of Rocket Internet and revisited the “winter is coming” narrative in Asia.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Jon Russell, Reporter at TechCrunch
  • Upcoming gig in TechCrunch Disrupt NY [0:46]
• Wither Rocket Internet [1:10]
  • Alibaba’s $1B investment to Lazada: What happened? We discussed the rumors circulating before the news broke out as well. [1:43]
  • Spiraling losses show Lazada desperately needed Alibaba Investment [3:45]
  • Lazada’s gross merchandise value is US$1B. [5:05]
  • What’s the impact to e-commerce in the Southeast Asia market? [5:39]
  • Is Alibaba buying instead of building its way to Southeast Asia? [6:34]
  • Who has benefited from the Alibaba investment? Rocket Internet, their early investors or the employees involved in them? [7:19]
  • How did Lazada drive up so much revenue without losses? [8:20]
  • Zalora, Rocket Internet’s unprofitable Asian fashion portal, is selling off business units [9:50]
    • How has Zalora performed so far within the Rocket Internet portfolio? Note that it has been part of Global Fashion Group (GFG), a consolidation by Rocket Internet for 5 emerging market brands: Dafiti (Latin America), Jabong (India), Lamoda (Russia & CIS), Namshi (Middle East) and Zalora. Their  valuation dropped from US$3.5B to US$1.1B with US$340M investment.
    • As part of the consolidation, how does Rocket Internet view the Zalora investment? What is it actually set out to do? [10:05]
    • Recently, Zalora lost some senior executives, Harry Markl & Avni Pundir. Who are they and why did that happen? [13:39]
    • Given Alibaba’s investment in Lazada, why did Rocket sell the business units in Thailand and Vietnam? [14:31]
  • Given Rocket Internet’s rapid selling off or divestments of assets at the moment, particularly in food delivery (Foodpanda) and e-commerce (Zalora), does that give us some hints on the financing environment in general (revisiting the “winter is coming” narrative)? [16:22]
  • A lot of people talked about Rocket Internet’s execution capability, but in the past few years, they seem to be throwing the money at the problem. Is it the way how they have hired or their turnover is so large that the whole institution lack institutional memory? [18:51]
  • Given what is happening with the global markets, has Rocket Internet’s promise failed? [19:52]
  • What are the other things that they are doing, for example, Zenrooms to Brazil? [20:50]
  • As we observe Rocket Internet’s rise and fall in the past few years, what is the near and far impact to the startup ecosystems across the world? [21:20]
  • Will Rocket Internet exist in a few years time? [23:51]
  • Silicon Valley does not want to buy Rocket Internet’s companies, for example, hear Brian Chesky’s explanation of culture as a reason (in Sam Altman’s “How to start a startup” course) on why Airbnb did not buy from the Samwer Brothers. [25:00]
  • What are the interesting news for Southeast Asia lately? [26:13]

Editor’s Note: We received a note that Christoph Gerber has not worked with Rocket Internet as mentioned with the podcast. His analysis is based on the people who he knew worked in Rocket Internet from Berlin. Our apologies with the error.

Yu Sicheng, Vice President International, Alibaba Cloud under the Alibaba Group, joined us in a conversation to discuss the popular cloud computing services from China and its plan to expand their offerings across the geographies outside China. In the conversation, Sicheng shared the success stories on Alibaba Cloud in China where it powered Sina Weibo (aka the “Twitter” of China) and predicted the winner of the “I am a Singer” in China with their artificial intelligence (AI) technology. He also explained how the Alibaba Cloud international team has expanded the cloud computing services from China to the rest of the world since last July, and the partnerships formed across Asia Pacific and the Middle East. Last but not least, Sicheng shared his perspectives on the important trends of cloud computing across the region and how CIOs of Asian corporations need to think about moving their services to the cloud.

Download MP3 (22.6 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Story of Yu Sicheng, Vice President, Alibaba Cloud International
  • How did he get started on a career in technology? [0:57]
  • From your previous roles in enterprise technology to Alibaba Cloud, what are the interesting career lessons he can share? [1:39]
  • What is his current role for Alibaba Cloud and what are the areas of coverage? [2:15]
• Alibaba Cloud (Alibaba Cloud) in Asia Pacific [2:33]
  • History of Alibaba Cloud aka Aliyun in China, as part of Alibaba Group.  [2:40]
    • Established in September 2009, Alibaba Cloud, Alibaba Group’s cloud computing arm, develops highly scalable platforms for cloud computing and data management. It provides a comprehensive suite of cloud computing services to support participants of Alibaba Group’s online and mobile commerce ecosystem, as well as other third-party customers and businesses. Alibaba Cloud is a business within Alibaba Group.
    • Alibaba Cloud serves more than 1.8 million customers worldwide directly and indirectly through independent service providers
    • Alibaba Group reported that its revenue from cloud computing and Internet infrastructure in the quarter ended December 31, 2015 was RMB 819 million (US$126 million), an increase of 126% year-on-year. Alibaba Cloud has made significant progress in the development of customers, products, technology and an ecosystem of more than 20,000 developers. [3:50]
  • Any interesting success stories of Alibaba Cloud in China? [4:15]
    • Sina Weibo (“Twitter” of China) [4:20]
    • 12306, China’s top train ticketing system. [4:45]
    • Alibaba’s AI predicts 100% of winners in Chinese TV singing contest “I am a Singer“. [5:15]
  • Are there any new services that will be brought out of China, for example, big data and the recent quantum computing initiative announced last year in Hangzhou China? [5:37]
  • The Alibaba Group has invested US$1B to take Alibaba Cloud international since July 2015 and subsequently opened their international HQ from Singapore, how has Alibaba Cloud expanded so far? [7:00]
    • Alibaba Cloud has over 10 data centers in mainland China, Hong Kong, Singapore and the U.S., with upcoming nodes in regions including the Middle East, Japan and Europe.
  • What are the countries which you have expanded to so far? Any major partners to Alibaba Cloud who you want to share? [7:47]
    • Alibaba Cloud announced its Marketplace Alliance Program (MAP) on June 8, 2015. The initial Alibaba Cloud MAP partners are some of the world’s leading technology brands, including American multinational technology company Intel, Singaporean telecommunications company Singtel, Dubai holding company Meraas Holdings, Equinix, a U.S. provider of data centers and Internet exchanges, Hong Kong telco and information technology company PCCW, French website hosting and cloud services provider LINKBYNET, and Hong Kong public utility Towngas.
  • What are the services (elastic computing, storage) that Alibaba Cloud provide to businesses out there? [10:08]
  • A record amount of traffic and transactions occurred on November 11, 2015, during Alibaba Group’s 11.11 Global Shopping Festival, which saw peak order creation volumes of 140,000 orders per second. [11:01]
  • Are there any new services which distinguish Alibaba Cloud from other cloud services in the areas of security? [11:25]
  • Who are the customers for Alibaba Cloud that you are focusing on? [13:05]
  • Can Alibaba Cloud International help customers to go from the rest of the world into China? [14:33]
  • Alibaba Cloud is also focused on helping startups to grow in their respective ecosystem, what are the services that startups can get access to in Alibaba Cloud? [15:10]
  • What are the international standards for Alibaba Cloud in meeting certification? [18:10]
    • In 2013, Alibaba Cloud was awarded the world’s first gold certification for cloud security by the British Standards Institute (BSI) and also received ISO/IEC 27001 certification for information security management. In 2014, Alibaba Cloud was listed by China’s Ministry of Industry and Information Technology as a trusted cloud service provider. In 2016, Alibaba Cloud became the first Chinese cloud computing company that attained ISO/IEC 20000-1:2011, the latest certification for IT service management standards.
• Thought leadership on cloud computing in Asia Pacific
  • What are the interesting trends that you are observing cloud computing in Asia Pacific? [18:46]
  • What are the best practices for CIOs who are considering cloud services like Alibaba Cloud should be thinking about? [21:45]
  • Ding Ding or Ding Talk

Author’s disclosure: Alibaba is a major investor to the SingPost Group which BL works in. The information on the podcast are publicly known and the focus of this episode is to understand the Alibaba Cloud business in Asia Pacific, and all the opinions expressed are mainly of his own and does not represent any organisations he worked or invested in.

On Tuesday, Alibaba Group Holding Limited announced that it acquired a controlling stake in Southeast Asian e-commerce platform, Lazada, for $1 billion USD.

The acquisition includes $500 million USD in Lazada shares, as well as purchased shares from other Lazada stakeholders, including Rocket Internet, Tesco, and Kinnevik. Following the transaction, Lazada’s valuation stands at $1.5 billion USD.

“With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China,” said Michael Evans, president of Alibaba.

Lazada’s e-commerce platform spans a number of important markets in Southeast Asia, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Despite the challenges posed by Southeast Asia’s cultural and linguistic diversity – not to mention its topology – the region’s half-billion residents make e-commerce a lucrative area with a lot of potential for growth. In addition to Lazada, other regional e-commerce startups include Tokopedia, Bukalapak, and Qoo10.

“Southeast Asia is an attractive mobile-driven consumer market that is highly fragmented and diverse with significant barriers to entry and a nascent modern retail sector that has large headroom for growth,” stated Max Bittner, the CEO of Lazada, in a press release. “The transaction will help us to accelerate our goal to provide the 560 million consumers in the region access to the broadest and most unique assortment of products.”

Alibaba’s billion dollar purchase shouldn’t be seen as simply a move into Southeast Asian e-commerce, though it’s certainly part of the tech giant’s ambitions. Just as Taobao paved the way for a range of other profitable products, such as Alipay under Ant Financial, the acquisition of Lazada may serve as a launchpad for other Alibaba products looking to enter Southeast Asia.

Hangzhou-based online language course company ABC360 announced the completion of a 100 million yuan ($15.3 million USD) series B financing on Tuesday, led by Guojin investment and followed by Tencent public space, the startup accelerator by Tencent as well as an education-focused fund from Zero2IPO Group.

“This financing will be used for product development, teacher training and the optimization of service processes,” ABC360 CEO Li Jing said in a statement.

Established in 2011, ABC360 matches students with English teachers who are mostly Philippines-based, with a 10-minute class fees upward of 7.6 yuan ($ 1.2 USD).

“Online learning is still concentrated in the first-tier cities. In the next few years, second and third-tier cities will stand out as our customer group,” said Mr. Li.

“2016 will probably be turning point for the online education. Now traditional education practitioners, who use to ignore online learning, understand the value and the need of online education.”

Currently, ABC360 has four overseas teaching centers, all located in Southeast Asia, including the Philippines and Thailand. To ensure teachers and teaching quality monitoring, the company says it will adopt the teaching process monitoring, evaluation and management of the student evaluation system.

English education in China has attracted a lot of funding over the past year. Shanghai-based online education platform TutorGroup raised C financing last November at a valuation of over $1 billion USD.

Image Credit: ABC360

As the consumer market expands, China is a country capable of both under-serving and over-saturating its tech hungry markets. While eastern city hubs see a slowdown in smartphones and laptops, third tier cities are fast consumers of new services and products. At the same time, China’s regional neighbors Japan and South Korea boast high-speed connections, but smaller populations.

So how do we go about approaching such a complex market? Despite having common ground as global tech hubs, the Chinese ecosystem and Silicon Valley are like night and day.  How should investors approach China? How can East Asia learn from Silicon Valley and what does the future of the Asian market look like?

We put these questions to our panelists at our Technode Demoday on September 25th in San Francisco Gary Gong, Executive Vice President of the Institute for Information Industry, Chen Zhao, head of Plug & Play China, and James Jung, CEO of Besuccess shared their ideas on the current status of Asian startups.

Plug and Play China, jointly founded by Sias International University and Amidi Group, helps global companies enter into China expand their businesses in the market. Besuccess is a Korean techblog, helping Korean startups reach out to the global market. Based in Taipei, the Institute for Information Industry is an NGO that promotes industrial applications, R&D, IT professional development as well as market research. 

Why should global companies invest in the Asian market?

Chen Zhao: China household’s disposable income and demand for mobile devices is increasing. China’s strong point is in the quick and easy adaptation of social media and e-commerce to the market, which can be observed in from the popular usage of QR code scanning in mobile consumption. 

James Jung: Korea is fast in customer service. Thanks to the sophisticated internet infrastructure, Korean customers are accustomed to fast internet speeds. Huge data consuming applications like live streaming music apps or game apps works seamlessly even in the subway. Another characteristic of Korean users is that they are willing to pay online. Korea’s in-app purchase rate is one of the highest in the world. However, as they have very high standards for products or services, it is crucial to set detailed strategies for product, customer service and marketing in order to survive. 

What aspects of the Silicon Valley ecosystem do you want to adapt to your countries? 

Chen Zhao: In China, conglomerates and government are supporting startups, and angel investors are increasing. However, the problem of China’s ecosystem is that big companies try to copy startup’s ideas, adapt it with their technology and know-how. Silicon Valley is different, however, when they see a new and innovate service and product, they are willing to acquire the product and the team. 

James Jung: Korea has Chaebols, or the country’s family-run conglomerates. Big corporates like Samsung, LG and the Korean government are now launching a number of accelerator programs to support startups, but still we’re lack of big success stories. It’s because Korean startups tend to heavily depend on the Korean government or a conglomerate’s grants, rather than creating a new ecosystem by themselves. Silicon Valley tries to build a business that stands by itself. The Korean startup ecosystem needs Silicon Valley’s independence.

What does a Silicon Valley startup need to prepare when entering into Asian market? 

Chen Zhao: There are two ways to enter China market. First, cooperate with big companies. As a startup and a big company establish a joint venture company, the startup can work with the big corporate’s local team, which can eliminate potential risk factors in cultural differences. Second, hire a country manager to run the subsidiary in China. Currently, Uber and Airbnb are running their business that way in China. It’s important to give the authority to a subsidiary in China so that it can run the company independently. 

James Jung: Strategies vary with the size of the company. If it’s a small sized company, it’s important to find a person who understands Korean culture and services, since it involves promotion, events and online marketing strategies. If it’s a big company, you’d better find an influential partner. Uber had to partly withdraw business in South Korea, because there had been strong opposition from taxi driver’s union and government. So companies should find a partner who can respond adequately to these restrictions and talk to decision makers in government, for those restrictions and laws hugely depend on the government official decisions.

What are the emerging trends in Asian startups these days? 

Gary Gong: In Taiwan, many young students jumped into startups, and now we see more and more R&D centers and task forces running. The entrepreneurial visa was implemented in Taiwan in July, to let foreign entrepreneurs stay in Taiwan for their business. Now about 60 million USD sized government funds are supporting tech startups, and there are now many startup hubs to help founders make their prototypes.  

James Jung: 60% of Korean startups are now offering on-demand and O2O services. Examples include food ordering service Baedal Minjok, real estate information service Jigbang and more. Along with this,  Virtual Reality is showing high growth in the area. The industry trend in Korea is not so different from that of Silicon Valley’s. I believe there will be more and more concierge services that are based on Artificial Intelligence. 

Chen Zhao: Chinese startups distinguish themselves in IoT, distribution, logistics, fintech, travel, healthcare and media. Chinese startup show the differences in trends in different locations. Beijing is strong in O2O, as you can see from on-demand massage, healthcare and car washing services. Shanghai is highly developed in finance, and there is a lot of business-related software. Now famous for being manufacturing hub for hardware startups all over the world, Shenzhen is an IoT hub for connected-homes and the connected-car industry.

Image Credit: TechNode

Netflix has announced it will be entering four new Asian markets in early 2016, including South Korea, Singapore, Hong Kong and Taiwan. The company launched its Asia presence in Japan this month.

The U.S.-based subscription streaming service has effectively traced a line through China’s eastern and southern neighbors, though plans to enter the mainland itself are still frustratingly vague. The company has hinted that is will be seeking partners, but has made no concrete statement. One reason for their hesitation could be the intense competition posed by new entrants in the industry.

Earlier this month, Chinese e-commerce giant Alibaba rolled out its own subscription-based streaming service, TBO, short for ‘Tmall Box Office’. The service costs 39 RMB per month ($6.08 USD) or 365 RMB per year ($57 USD).

While TBO is still in its infancy as a beta product, it has the right parent company to succeed. Alibaba has made a series of high profile film and entertainment partnerships this year. In early July they struck a deal with Chinese film company DMG and Hunan TV to package the first ever bundle subscription service in China, integrating the service with their Tmall platform.

TBO could also see benefits from some of the partnerships established under Alibaba Pictures, the official media and entertainment arm of Alibaba group, established early this year. Recently the entertainment group led an undisclosed investment in Paramount Pictures’ ‘Mission Impossible: Rogue Nation’.

Despite their global strength, Netflix lacks the industry roots of Alibaba in China. Netflix sold the rights to air their hit series House of Cards to the streaming arm of internet portal Sohu this year, though they have remained tight lipped on a possible entry partner for the company itself.

Other entertainment streaming services, including Spotify and Apple music, have also skirted China, aiming for its less-complex Asian neighbors.

@CateCadell

Related Articles:

Alibaba, DMG Reveal Details Of China’s First Entertainment Bundling Deal

Alibaba Goes Hollywood: Invests In Paramount’s ‘Mission Impossible’

Netflix’s Bold China Plan

Image Credit: Shutterstock

Mobile innovation in Asia is developing fast; faster than the western world realizes according to the Director General of GSMA, Anne Bouverot, who opened the Mobile World Congress in Shanghai yesterday.

“There are 1.8 billion uniques subscribers in the Asia region, and it’s growing faster than other regions… Asia is driving innovation, more than people in the U.S. and Europe understand.” Bouverot pointed to examples including the rapid expansion of 4G networks and the number of regional leaders in LTE technology.

“Growth is coming from China. Deployment of 4G in China is faster than Europe and faster than the US,” she added, also noting that “in terms of production of handsets, 90% of the models of handsets were produced in Asia.”

South Korea was singled out for their fast adaption to 5G, and both South Korea and Japan as frontrunners in the innovation of LTE technologies, with an adoption rate faster than both the U.S. and Europe. Bouverot also added that leaders in the mobile industry still have a lot to do in Asia, with penetration still well below the global average. 

Other speakers at the event pointed to a mobile-first tendency in Asian countries with both developed and emerging markets in the region skipping desktop connectivity in favor of mobile.

Telenor CEO, Jon Fredrik Baksaas, case-studied the launch of Telenor SIM cards last year in Myanmar, where total connectivity sits at a regional low and mobile continues to outweigh desktop by a considerable margin. “The very first day in Yangon we had 521,000 new [mobile] connections,” he said. “Its quite the logistical adventure.”

While the market is willing, innovation and development in the region still requires considerable guidance, according to Bouverot. “In the Asia Pacific only a third of people have access to mobile… There is a lot to do, and a lot for us to do as leaders.”

Image Credit: Shutterstock

Social-based fintech platform Fastacash has secured a $15 million USD B series, raising the company’s total funding to $23.5 million USD. Rising Dragon Singapore led the latest financing round, which also included fintech venture capital firm Life.SREDA, UVM 2 Venture Investments LP, and other existing investors.

Founded in 2012, Fastacash is a global social payments platform that allows users to transfer money to friends and family over social networks and messaging platforms like Facebook Messenger, WhatsApp, Skype, Twitter, SMS & email. It provides accounts both to consumers and companies, where virtual goods, music, and images can also be transferred through its platform.

The company now claims to have over one million end-users, mainly distributed throughout Southeast Asian markets such as India, Indonesia, Singapore and Vietnam. Russia is also a strong market for the company.

Fastacash works with banks, mobile operators, remittance companies, payment service providers, mobile wallets and other financial institutions to enable peer-to-peer or person-to-merchant transfers. As of this May, the Singapore-based payment startup has formed partnership with Axis Bank, India’s third largest private bank.

With the new funding, Fastacash plans to strengthen its foothold in India and Southeast Asia, as well as scaling up globally by entering new markets in the U.S., UK, Europe, and the Middle East.

After raising a $1.5 million USD seed funding led by Hong Kong’s Funding the Future in 2012, the company nabbed a $3 million USD in Series A funding from Singapore-based Jungle Ventures, Spring SEEDS Capital, the investment arm of SPRING Singapore, and existing investor.

An additional $4 million USD was received in an extended Series A round, led by Jagdish Chanrai, a Principal of the Kewalram Chanrai Group, and Golden Oriole Investments.

Image Credit: Fastacash

Re.Mu is a fashion curation startup based in Taiwan. Re.Mu lets users upload pictures of their clothes and accessories by different categories, also offering a way for people to organize and keep track of their clothes, bags, shoes etc. It has recently received an undisclosed amount of seed round funding from TMI and KAMIA ventures. The startup plans to use the funding to hire people and expand to South East Asia and the US market.

Re.Mu was founded in late 2012 by Alvin Woon and Emily Yang. It is available as an app on iOS (released in late September 2013) and Android (released in mid November 2013) and as a web-based version.

The startup claims to have 30,000+ users in Taiwan and close to 400,000 page views a month. The company shared that they have seen initial traction from the US, Japan and Chile. Currently there are more than 50,000 pictures uploaded and more than 200,000 votes/comments generated on the site.  They’ve also collaborated with fashion retailers and media such as she.com.tw on marketing campaigns.

Re.Mu is planning to expand to South East Asia, given the geographic proximity to Taiwan. Thailand will be the first stop due to the country’s high engagement in social media and fashion-conscious consumers. The company has already formed local partnerships and has managed to break into the top 50 iPhone apps in the social networking category in the country.

The fashion startup is exploring multiple monetization models in the future, like affiliate marketing, providing marketing services to fashion brands, becoming a platform where fashion designers can promote and sell to a targeted group of international users, or community-based market places, where users promote and sell directly to other users.

The company is currently considering adding community-driven features such as forums to offer more value to and increase interaction among the users. They released a new feature last week which helps calculate how much money a user spend on shopping a year.

“(Mainland) China is definitely on our radar and some of our most active users are actually from China. However the Chinese market has become ultra competitive in the last couple years and will require a lot more investment in terms of technology, capital, local connections, and time. It is something we will consider perhaps in the next phase of expansion,” added the Re.Mu team on plans for Mainland China.

Re.Mu founder, Alvin Woon who previously sold his consulting company and founded Plurk.com, believes fashion commerce has been littered with so many products that shoppers are having a hard time just knowing what to click. “As a new generation of social media-savvy shoppers come of age, retailers and e-commerce sites need to think about how they’re adapting to new standards. People want to be told what to buy, what kind of shirts go well with what kind of pant, what’s the color of the season, how to mix and match your high school sweater, etc etc. This is why curation services are gaining a lot of traction and why e-commerce stores are launching their own fashion blogs. People go there to look at beautiful things and learn about how to look good. These sites tend to have a chief tastemaker, usually the founder. Now what if everyone can be a tastemaker and you get to choose who to follow? Real people sharing their awesome closets. That’s RE.MU,” he shares.

I’ve frequently traveled to South East Asia since my parents are from Malaysia. The region is notorious for having incredibly bad traffic problems. The most congested traffic I’ve experienced is Bangkok in Thailand. Beijing is fairly bad too but since rules aren’t really enforced, it’s not uncommon to see cars drive on footpaths. Traffic is a huge problem that costs time, energy, emissions and is a main cause of road rage.  Next time I suggest turning up the radio and dancing in your car if you’ve got no other choice.

But a more logical and technologically advanced way of solving this problem is to do what LewatMana in Indonesia is doing a collborative platform for beating the traffic in Jakarta. Lewatmana offers Indonesian drivers a platform for pooling information on traffic conditions in the bustling capital. Users share a network of webcams, tweets and text messages in addition to official cameras. In this way they can manage and plan their journey, helping to reduce traffic and CO2 emissions. For solving such a prevalent and important social problem, LewatMana was one of the top 10 projects chosen at the Net Explorateur competition in France. A prestigious world wide competition where 500 projects applied, then eventually shortlisted to top 10.

So to get some insight into LewatMana and a bit about the start-up environment in Indonesia, I interviewed its founder Hendry.

What is your background?

I have background in Computer Science and have been working in business software industry.

What is Lewatamana?

LewatMana.com is an Integrated Digital Platform which makes it easy to share road traffic information through several different digital media including web, mobile and navigation devices. Everyone can participate. We are working closely with business, institution and individual to participate and to finally form an ecosystem which would benefit everyone who participates.

Why did you make it?

Traffic has been a big problem in big cities in the world, and Jakarta is one of them. So we make this service to help the commuters to be able to get access to the road traffic information easily. We help them to plan their trip accordingly maybe by avoiding certain roads or even postpone their trip so they can make better use of their time instead of being trapped in a traffic jam. We are hoping that the more people knowing more about the road condition and be able to save few minutes of travel times. Imagine if in average people can save only 5 minutes of their travel time per cars and that saving comes from 100,000 or 500,000 or 1,000,000 cars, that would be 500,000 to 5,000,000 minutes worth of gasoline being saved and carbon from vehicles emission can be reduced

How does it work?

Currently there are 3 platforms that we currently operate:

1. CCTV Networks, it is a collection of CCTVs installed in several locations through out the city
2. Short text, allow user to have 2 ways interaction where they can easily ask, contribute and check information through sms, mobile web and twitter.
3. Digital data, these are the data that we collect from floating sensors on the vehicles.

How many users/downloads?

Since launching mid 2009 there are more than 1,200,000 unique users have used the service, monthly about 25%-30% of them is active. There are probably more uncounted users who access the information from our partner site which we do not have the statistic number. We partner with Indonesia largest news portal (detik.com) and Indonesia biggest telco operator (Telkomsel), in addition we also partners with Google maps.

Is it invested into?

Currently this is a self funded

What is the start-up environment like in Indonesia?

The start-up environment in Indonesia in general is currently still in infancy. There is no support from government yet at the moment. The community of the internet and mobile projects (often refer as start-up) is growing rapidly in past 2 years.

What is the investment market like?

There are several VC’s that are starting to put an eye on good prospective projects/start-up in Indonesia. Recently a local based VC just funded Indonesian biggest community site (forum) and through their incubator company also have housed about 6 local start-ups. There are also another VC which is backed by some Japanese VC who funded few (6-8) interesting start-ups. So in general things are still at a very young stage and due to Indonesia’s market size the VCs definitely do not want to miss any action in Indonesia.

What did it mean for you to get short-listed in the top 10 of the Netexplorateur competition?

Firstly it gave great encouragement to the team. Secondly the recognition will definitely bring more positive impact toward our service and solution.

Vision for Lewatmana?

To become the one stop solution for traffic information solution and location based service especially in the area of local commuting.

The introduction of this special report says that:

Southeast Asia is a “rojak” (Malay for mixture) with different levels of Internet development. Singapore has one of the world’s highest broadband-penetration rates while countries like Laos, Cambodia and Myanmar lag behind.

With more than 500 million people, Southeast Asia is an presents an exciting opportunity for mobile developers and operators. Countries in the region have grown their mobile Web uptake significantly. The lack of broadband Internet infrastructure in some countries has contributed to the burst of mobile browsing. Heavy users often opt for the latest phone model that comes with 3G and it has become increasing popular for mobile operators to offer fixed-rate 3G packages, which consumers use to replace their broadband access.

Popular sites in Southeast Asia are a mix of international sites and local ones. Singapore has mostly international sites, while Vietnam has mostly Vietnamese in the Top 10. We also see a huge social network following in the region. Friendster, Hi5 and Facebook all ranked strongly. In our August report on the Long Tail, we showed that Friendster alone contributed to more than 50% of the monthly data usage in Indonesia.

Born and bred in this region, i am always amazed how quick users adopt to the latest handphones. There is an ill-attempted joke saying that you can scope up many fancy secondhand phones from the school kid here and sell it elsewhere in the world.

Looking at the statistics, Malaysia leads with 462.6% growth in users this year, followed by the Philippines (396.4% growth) and Indonesia (329.5% growth). Even though these statistics are measured solely on Opera Mini browser usage, it very much tells the story of Internet adoption as Opera Mini has a huge market share in mobile browsing.

So why is Internet browsing so big in SEA?

Firstly the telecommunication providers are taking steps to generate data income(to substitute voice call revenue drop). For example earlier this year, the biggest telco in Malaysia, Maxis ran a series of advertisements to promote broadband Internet usage, this might be the reason of Malaysia’s usage spike.

Another blessing in disguis was the less-than-ideal landline speed. Places such as Indonesia has huge appetite for Internet. So when landline couldn’t satisfy them, people went mobile broadband.

Thirdly would be because of the traffic condition of parts of SEA. Long hours in the car meant that everyone wanted to find something to do in rush hour, and mobile Internet answered the calling.

Last but not least is the status symbol of chic handphones. There are groups of people, young ones especially that scramble to buy the latest handphones ,this means that their handsets come equipt with 3G and HSDPA and what not.

Looking ahead in 2009, Mobile Internet will continute to grow as telcos continue to push their 3G services. Mobile Internet will be advertised as an ideal platform to acquire the latest services. From Location-based services to dating tips, from weather forecast to mobile games.