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News  12, Jun 2012

[Echelon Live] The characters of the various ecosystems in SEA

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Our own director, Mohan moderates the panel comprising of Danny Wirianto, Jay Fajardo, Sieng Van Tran, Johan Kremer, as well as William Henley. They discuss the rise of emerging markets around Southeast Asia.

This post is part of the live coverage of Echelon 2012, Asia’s leading tech startup event happening on June 11 – 12. If you spot typos, slight inaccuracies or need more clarification, do leave a comment in the post and we’ll address it in the next edit.

Views on how the various ecosystem work together

Slowly but surely, the next big thing around the technology scene will come from Southeast Asia because of its huge potential. According to Sieng Van Tran, an investor based in Vietnam, we are already seeing the various countries in the region complementing each other. While Vietnam has the brute force, China and Indonesia has the critical mass, and Singapore has the infrastructure and salesmanship. However, there are currently some disconnections between all these countries and in order to move things forward, we would need more cross pollination of ideas and resources. While Tran seemed to be optimistic about the region, William Henley, founder of Tapetrix cautioned everyone to be realistic. William reasoned that each country in Southeast Asia has its own set of problem, culture and different infrastructures.

Key opportunities in the region

Johan, the SEA Head of Alliance for RIM says that he sees a commonality in terms of hunger and interest in developing on mobile platform across SEA. Entrepreneurs and founders in the region seemed to recognize the huge opportunity which the mobile space promise. However, to really tap into all the different market in SEA, one has to understand the different cultures in the various markets. For example, language. Ultimately, the one who can localize successfully into the various markets will win. Danny, CEO of MindTalk agrees and says that the only question for startups now is how to capitalize on this huge mobile opportunity. In Vietnam, Tran sees a promising new breed of Vietnamese entrepreneurs that solves real world problem instead of copying all the proven business model from the West.

Thoughts on Builk, our startup pitch winner and whether can it go into the various markets

For Vietnam, there is a industry problem now with too much supply of property, reflecting a lack of opportunity for Builk to penetrate into the market. Tran continued by saying that Gimmie would be doing really well in Vietnam as the country is booming with a lot of gaming startups now. For Builk to venture into Indonesia, Danny mentioned that it might also be difficult. “In Indonesia, it’s not how good you are, but it’s how the Indonesian know you.” Builk would face a cultural problem in Indonesia as most Indonesian in the construction industry have friends and family as their vendors.

On acquisition landscape in Southeast Asia

For Indonesia which has a sizable amount of Indonesian whom adore Japanese products, Japan would have a better grip in conquering the acquisition landscape, and it would not be surprising to see more M&A soon from the Japanese. With huge cheques in the Japanese’s pocket, Johan also says that its just a matter of pitching to the right company. While the interests and hypes are there, it still remains to be seen whether all the hypes are followed by actual M&A deals. Jay who is based in the Philippines added on by saying the local investors there are not matured enough to address the needs of the startups there, opening up opportunities for bigger players from the region to come in.

What the Japanese can offer to this region

It makes sense for the Japanese to look into the region because the country has reached it peak. It also makes sense for them to look into Southeast Asia, a place nearer to their homebase where they are familiar with the market, and where there is a huge potential of growth. For Vietnam, the biggest challenge for startups there is premature scaling, due to a shortage of experience talents driving startups. The Japanese can bring in their process and system to lay the foundation for scaling into Vietnam and the region.

Biggest challenge in the various region

In Indonesia, everyone seemed to be focusing only in Jakarta, which saw all the startup action taking place. Startups need to start realizing that they need to start growing into other domestic markets around Indonesia before other players start to come in. To penetrate the Indonesian market, startups also have to realize that raising funds locally in indonesia is hard because the country does not have a financial ecosystem to support that yet. In order to survive, the best is to bootstrap, says William Henley, which closed by advising: “Getting traction here has never been easy, is not easy, and is not going to be easy, so you need to have a good monetization model.”

Thanks for following the live coverage of Echelon 2012. If you’ll like to check out more coverage of the sessions at Echelon 2012, follow this link.

Jacky Yap

Jacky Yap

Having spent one year abroad in Shanghai under the NUS Overseas College Programme, Jacky has an avid interest in entrepreneurship and web based startups. Jacky used to run N-House, Singapore's first entrepreneurial themed residence in NUS, and was also part of the organizing team for Startup Weekend Singapore 2012. You can reach him at jacky [at] e27 [dot] co

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