For many tech companies, Southeast Asia (SEA) presents unique business opportunities as well as challenges. While its population of over 600 million people makes it a large potential market, the diversity of languages and cultures at the same time makes it hard for companies to come up with a single market strategy.
Echelon‘s third panel session was hence conducted with this in mind, bringing together five representatives from tech companies with Southeast Asian presence. While startups and investors bring with them unique and valuable perspectives on the SEA market, large tech companies lend a touch of experience, for they have walked the expansion route and seen for themselves the challenges and opportunities firsthand. Without further ado, let’s introduce the panelists below:
- Mohan Belani (Moderator) – Co-Founder and CEO, e27
- Parin Mehta – Head of Strategic Partnerships, SE Asia, Google
- Delilah Chan – Head of Sales for Singapore and Malaysia, Twitter
- Brad Paterson – VP and Managing Director, Asia Pacific, Intuit
- Stephen McNulty – Managing Director, Asia Pacific and Japan, Progress Software
- Kiran Raghavan – Head of PMD Market Development, APAC, Facebook
Mobile and localisation as biggest challenges
The first question was about the greatest challenge in SEA that is, compared to most other regions around the world, rather fragmented in terms of geography, culture and language. Mehta noted that access to technology is an issue for Southeast Asians; many still have no way of connecting to the web. In contrast, Paterson cited the under-developed payment infrastructure in much of rural SEA, impeding the adoption of SaaS systems by small companies even though they may have access to the internet.
On a different tack, Chan mentioned the need to cater to diverse devices from Apple/Android phones to desktops, based on user data gathered from Southeast Asians, and that companies have to localise their content due to the differing cultures and languages of SEA. McNulty agreed on Chan’s point, adding that most big companies tend to lump the various countries in SEA as a region by itself, leading to difficulties in entering multiple markets all at once. Raghavan rounded off the question by noting that many Southeast Asians’ first exposure to the net is via mobile devices, and hence the main challenge is how to make the mobile platform relevant to users.
Talent abounds in SEA
Another question asked by an audience member was about tech talent, whether the SEA region has the expertise that these companies require for expansion. Raghavan cautioned against the tendency for recruiters to hire people who think similarly to them, and that the prime HR challenge for firms is the need to maintain heterogeneity by hiring people with diverse backgrounds. Paterson concurred, adding that Asian firms should not restrict themselves from hiring and firing freely, ensuring a good churn of talent.
Another perspective was provided by Chan, who noted that talented people in Asia are often in comfortable positions, and that tech companies and startups need to attract talent by selling their visions, creating entrepreneurs from otherwise non-entrepreneurs. McNulty agreed, adding that talent is abundant in SEA and so building all-local teams has become possible. Mehta remarked that in Asia relationships matter, and that companies should strive to build ties with employees.
Ample opportunities in Indonesia and Singapore
The next question was asked by Mohan Belani, e27‘s very own CEO, concerning the country with the greatest potential for the development of the tech business sector. Indonesia was one of the favourites among the panelists, with Raghavan citing its mobile-first, millions-strong market with a huge potential for online and mobile gaming, and Mehta noting Indonesians’ heavy use of video content.
Singapore was another favourite, with Chan noting that its central location and developed tech base influence the tech scene around the region, and McNulty pointing out the government’s encouraging stance towards tech and startups. One other SEA country that stood out was Malaysia, which according to Paterson will be rolling out its own GST system, creating opportunities for SaaS accounting firms.
Focus and expansion go hand in hand
The last question of the session came from Belani, who asked whether a startup based in SEA should focus on its local market first, or have its eyes on regional expansion from the get-go. Most panelists agreed that both are important, though Raghavan noted that localised startups generally lack visibility to investors, and that startups should be broad-based enough to scale easily.
On the other hand, McNulty and Paterson argued that startups should go local in the beginning, understanding customers deeply and finding similarities to other markets that will allow them to scale regionally with a minimal effort. Finally, Mehta concluded that the decision to focus locally or to scale regionally should be made based on customer data, whether they mostly lie within the same country, or scattered around the region.