Southeast Asia is no stranger to startups. Thanks to the rapidly growing digital economy, economic growth among the ASEAN countries collectively averages 5.4%, a rate much higher than the global average. This rate is expected to be sustained and will place the region as the world’s fourth-largest economy by 2050. However, until recently, understanding emerging trends in Southeast Asia has been limited to considering only the ASEAN countries, overlooking international economic relations with important influences such as Taiwan and Hong Kong

The recently coined term Greater Southeast Asia (GSEA) comes from leading accelerator AppWorks, who recently released a report of GSEA growth in GDP per capita. The GSEA includes all the ASEAN countries, as well as Taiwan and the territories of Hong Kong, Macau, and East Timor. AppWorks’ logic in including Taiwan lies in Taiwan’s booming economic evolution that has attracted and inspired startup founders across the region.

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Taiwan and emerging trends in Southeast Asia

The primary statistic to underline Taiwan’s importance to Southeast Asia’s online economy is the fact that its e-commerce market is worth  over $42 billion USD. This figure makes up almost 66% of the entire digital economy of the GSEA.

blue and white concrete building
Taipei 101

Because of the enormous size of Taiwan’s market, it is considered a microcosm of opportunities for development before implementation in other parts of Asia. Startup founders in the area  are attracted to Taiwan to develop e-commerce strategies, build knowledge, and test the effectivity of their ideas. Taiwan is also regarded as fertile ground to create a company and go public with an IPO more quickly than in other countries in Southeast Asia. Founders of established but early-stage startups are also attracted to Taiwan as a launchpad for the regional market, seeing it as a gateway to Chinese-speaking countries too.

AppWorks reports this data as a Taiwan-based accelerator and venture capital firm, boasting a portfolio of almost 400 startup companies with a total valuation of $4.72 billion USD.

Notable points of the GSEA growth report

Vietnam is a country of approximately 95 million people and is experiencing rapid development of many early-stage startups, such as Sky Mavis and Vietnamese startup founders hold a unique l advantage in Taiwan with a growing population of approximately 200,000 Vietnamese living in the country. With numerous daily direct flights between Taiwan and Vietnam, Vietnamese people form one of the largest foreign ethnic groups in Taiwan.

people walking between food stalls under chinese lanterns
Phu Quoc, Vietnam

Indonesia has witnessed the growth of five unicorns—privately held startup companies with a current valuation of at least $1 billion USD—in the form of Go-Jek, Traveloka, Tokopedia, Bukalapak, and newly-minted OVO.

As of last year, five countries in GSEA showed a rate of over 6% growth in GDP per capita: Cambodia at 6.83%, Laos at 6.72%, Vietnam at 6.5%, the Philippines at 6.47%, and Myanmar at 6.45%. Indonesia shows growth in GDP per capita at 5.2%, and East Timor at 5%.

Of these eight rapidly growing Southeast Asian countries, four have mobile internet penetration rates of less than 40%: Cambodia, Laos, East Timor, and Myanmar.

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These statistics indicate that these emerging market economies will significantly contribute to the rapid growth of Southeast Asia’s digital economy thanks to increasing accessibility to software and tech in the coming years.

Metropolises central to the GSEA digital economy

Other emerging trends in Southeast Asia can be gleaned from data showing the seven metropolises that account for over half the internet economy of the region. In no particular order, these areas are: Greater Bangkok, Thailand; Klang Valley of Kuala Lumpur, Malaysia; Singapore; Hanoi, Vietnam; Ho Chi Minh City, Vietnam; Metro Manila, the Philippines; and Jabodetabek, Indonesia.

While 85% of the Southeast Asian population lives outside these areas, these seven  account for 52% of the region’s digital economy. They are the central hubs for Southeast Asia’s e-commerce market, but with the growing availability of tech, the digital economies of the vast population residing outside of these areas there is the potential to grow twice as fast as that of major cities.

The growth of Southeast Asia’s digital economy is correlated to the increase in the population’s internet connectivity. Almost 80% of Southeast Asians had no internet connectivity or limited access to the internet just over a decade ago. Today, with 360 million internet users in the region, they are the most engaged mobile internet users in the world. Widespread internet connectivity continues to grow as creatives, engineers, and startup founders rush to develop and effectively execute transformative commercial problem-solving designs.