China’s e-commerce giant JD just announced its new open ecosystem for connected devices at the Consumer Electronics Show Asia in Shanghai. Meanwhile, Samsung launched its connected-device platform ARTIK earlier this month. There are also increased opportunities and support for startups in Asia looking to enter the space with the likes of Internet of Things (IoT) accelerator Brinc in Hong Kong.
“From what I can see, the past couple of months has been really encouraging for startups in IoT sector,” Alan Cheah, Marketing Director at MaGIC, told e27. “With a strong wireless broadband infrastructure being implemented across the region, it makes thing easier for startups to provide solutions in the B2C and B2B segments.”
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Indeed, the growth of smartwatches like the recently launched Apple Watch, as well as smart home devices, smart cars, and industrial IoT solutions, is opening up ever-more opportunities for startups in Asia. The opportunity is no longer exclusive to the Western markets.
“However, Internet penetration outside handful of Asian countries (Hong Kong, Singapore, Japan, South Korea) still remains a challenge. It does provide a great opportunity to the companies in the region,” Ashok Jaiswal, Founder at Hong Kong-based hardware startup EzeeCube, told e27.
According to one IDC report from February, the IoT market size in Asia-Pacific excluding Japan will grow from US$408 billion in 2013 to US$862 billion by 2020. That’s super exciting growth for any startups looking to make plays in or piggyback off a growing space.
Nigel Hembrow, Director at Singapore-based venture capital firm Impact Ventures, is bullish on the space. “New channels for communications always require adaptation of existing software and content, and inspire completely new solutions too,” he told e27.
Offering a counter perspective, Albert Shyy, an Associate at GREE Ventures, questioned whether it wasn’t still “early days” for IoT in Southeast Asia. “There are a few companies like Ambi Climate (Hong Kong) that have been innovating, but I think one issue is limited hardware expertise in the talent pool due to a relatively limited electronics manufacturing base… hardware is super tough to do at scale, and having people who have done this and have the right factory connections is pretty critical,” he told e27.
Research firm Gartner reported that the number of connected intelligent things is expected to rise 30 per cent to 4.9 billion units in 2015, and 25 billion units by 2020. But echoing the “early day” comments from Shyy was Dmitry Levit, General Partner at Singapore-based venture capital firm Digital Media Partners that focuses mostly on emerging markets in Southeast Asia.
“[In Southeast Asia] there are more immediate wins and things to fix than consumer IoT you’re referring to, self-driving cars, and such. However, B2B industrial IoT has always been fascinating to me and we’re learning about it, slowly but steadily. I’ve come across a couple of fascinating projects dealing with drone-based peat fire detection, maritime security, and infrastructure (roads and bridges) inspection that I think will take off in Southeast like a wildfire,” Levit told e27.
“Startups wouldn’t want to forget about B2B opportunities in all the bruhaha about the consumer side of things. On a separate note, I personally think IoT — like the term “mobile” before it — is awfully poorly defined, and for a meaningful discussion we should get nuanced about whether we’re talking industrial M2M traffic, or consumer wearables, or industrial drones, or remote medicine, or just good old mobile phones and in-store sensors with a few new chips and protocols. Just like we wouldn’t discuss “mobile business” these days and clarify instead whether we’re talking app stores, or e-commerce, or payments, or advertising,” he added.
Abhishek Singh, a co-founder at Singapore-based fin-tech startup TrakInvest, told e27 that he sees increasing IoT opportunities for startups in the region in areas like infrastructure, financial services for the unbanked, and e-government services. He sees a need for “IoT working with smart contracts,” and recommends startups to “opt for building value-add services atop open source platforms.”
Singh offered several IoT application examples, including drones with sensors to measure soil suitability and surveying of sites, sensors embedded in beams to signal leveling or even-pours of concrete without the need for human intervention. But coming from a fin-tech background, he also IoT plays in that space around financial services for the unbanked.
“If you do micro-lending to small businesses via mobile in villages in Indonesia or the Philippines, and it’s a goods or manufacturing or agriculture business, providing IoT sensors alongside the loan can benefit the borrowers. A simple example would be real-time output monitoring sensors at an SME factory that allow a lender to monitor output and vary line of credit accordingly in real time if needed,” he said.
What all this points to, including the new announcements by JD and Samsung (among others), is the definite emergence of a new era for IoT plays by Asia’s startups. While some, notably on the VC side, remain skeptical around whether emerging markets in ASEAN are yet ready to adopt IoT solutions in a big way (partly due to low Internet penetration), there is undoubtedly a growing feeling that the segment is growing and ready to boom.
Don’t miss the ride.
At Echelon Asia Summit 2015, as proof of the buzz being generated in the hardware and IoT space, we’ll be hosting a special “IoT Square” for startups in the space to exhibit, including from some notable IoT accelerators in the region. If you’re an IoT startup that would like to exhibit — please contact Jordan Huang at jordan [at] e27 [dot] co directly.
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