With the fastest growing regional economies in the world, Southeast Asia is now home to groundbreaking tech startup ecosystems and innovative ventures, some of which have achieved billion dollar valuations.
From Singapore and Jakarta to Bangkok and Manila, the region’s 600 million consumers make for an ideal market for launching new products and services. Here are the top 7 reasons why Southeast Asia is becoming a global tech startup hub.
7. Lucrative emerging markets and the fastest growing regional economies in the world.
Consider this: out of the 10 member countries of the Association of Southeast Asian Nations (ASEAN), 5 are among the top 25 countries globally when it comes to GDP growth. Additionally, capital invested in the region has increased by 47% since 2013.
6. Exploding rates of mobile adoption and smartphone sales.
Southeast Asia has one of the highest rates of mobile adoption in the world; additionally, most populations have grown accustomed to consuming digital content and paying/shopping for goods online.
5. An Internet-savvy population receptive to digital products and services.
Over two billion people inhabit the area between Southeast Asia and India, with close to one billion comprising its middle class by 2020. This positions the region to become the fastest-growing internet market globally as well as the world’s leading mobile-first market.
4. An entrepreneurial environment underinvested by venture capitalists.
About 90% of all venture investment in Southeast Asia is early-stage seed investment, compared to 50-60% in the West. This disparity translates to a plethora of attractive ventures for investors looking to get in on early opportunities.
3. Low tax rates for startups and new businesses.
Southeast Asian countries are world-renowned for their business-friendly tax/legal environments—for example, Singapore is a leading nation in this category; 3 out of 4 Indian startups that raised early-stage funding in 2015 plan on rehoming to Singapore for its more favorable regulatory climate.
2. Support for tech startups provided by local governments.
Southeast Asian governments have stepped up their game drastically in the last few years to support local innovation. For example, the Malaysian government’s Cradle Fund and MaGIC are recent initiatives for supporting local tech startups. And in neighboring Indonesia—the region’s most populous country—President Joko Widodo’s tech start-up-friendly government is positioning the nation to become Southeast Asia’s largest digital economy by 2020
1. A slowdown in China’s markets.
China’s economic growth has slowed over the years, prompting foreign firms and investors to increasingly look towards Southeast Asia for new opportunities. Additionally, the government is also investing heavily in the region, hoping to transform countries like Cambodia, Laos, and Myanmar into bigger destinations for China’s exports.
In short, technological innovation is both democratic and global—and some of the today’s so-called developing nations may be leading the world’s digital economies by tomorrow. Be sure to keep Southeast Asia on your radar for tech startup innovation in 2016 and beyond.