Indian startups have been traditionally inclined towards the West, particularly towards the US and Europe for raising funds and expansion. They have also shown interest in the Middle East. Lately, there has been a growing interest amongst Indian startups towards Southeast Asia as a potential market. The startups are looking to expand beyond Singapore to other parts of Southeast Asia too.
So how can the two emerging startup hubs collaborate and capitalise on their unique ecosystems? On the second day of Echelon 2014, Surender Dhaleta, Editor, e27, and the moderator of the panel threw light on how the Indian startups are eyeing Singapore and other neigbouring economies in the region as a potential market. And what are the strengths and weaknesses of the two markets, and the similarities and differences between them.
The digital ad spends in India is growing much faster than China, Japan and Indonesia, but it is still not the preferred market for companies to expand. Akshay Garg, Co-founder, Komli Media, said that the macro-economic situation in India is hampering the growth, hence people prefer other emerging markets as opposed to India. However, the condition is slowly improving and the Indian startup ecosystem is beginning to boom.
Dippak Khurana, Founder and CEO, Vserv.mobi, said, “It is not a one country play if you have to build a large business. We chose to expand into the developing and emerging markets as the internet penetration was growing rapidly. We preferred the SEA market to diversify our business and then replicated the successful model into other regions.”
Is India a better place to invest and expand than Southeast Asia?
There are huge inflows of investment in the emerging Southeast Asian markets and India. Amit Anand, Managing Partner, Jungle Ventures, said, “We believe in investing in regional category leaders in Southeast Asia and South Asia Pacific region. I don’t see many consumer internet e-commerce companies coming out of India. In the e-commerce space, a few categories have succeeded in India. Cosmetics as a vertical has not done well as opposed to SEA that has many profitable models.”
According to Teruhide Sato, President and Group CEO, Netprice, India has a high growth potential with many interesting startups and big venture capitalists. The marketplace is popping up and the country is establishing a good payment gateway but lack of infrastructure and social platforms act as a hindrance to growth. The entrepreneurs have to focus on solving these problems and coming to an innovative solution.
Toby Ruckert, CEO, Unified Inbox, felt that Singapore as a market is quiet real with people from all nationalities, so it is one of the better places to review the product with the help from different kinds of people.
The app developer ecosystem is more matured in SEA than India. Hence, these companies look at expanding to SEA rather than India. Some of the neighbouring economies such as Nepal, Pakistan and Bangladesh are more attracted to the Middle East. According to Anand, some players will crack the code locally.
The SEA startups attract huge amounts of investment from Japanese investors. Sato said, “The Indian government is also aggressively strengthening ties with Japan and the Indian Prime Minister Narendra Modi is soon going to visit the country that will build bilateral investments between the two countries. The positive sentiments are settling in and this will accelerate Japanese investment in India.”
Experts also cited the similarities between the two regions and the changing landscape in India with the emergence of a new government.