A rising number of platform service providers are looking to Southeast Asia’s emerging trends as a growing market. Despite the global pandemic, the use of platform service providers in Southeast Asia remains strong. Technological innovations, changing consumer trends, and an overall positive regional economy offer platform service providers a chance of success in Southeast Asia.
Indeed there are numerous new and expanding platforms popping up across various sectors such as eCommerce, fintech, social media, gaming, transportation, video streaming, and home services. Examining which platforms are expanding their operations can provide insight into this growing market about what consumers expect and what areas are thriving.
An expanding platform economy
According to The Center for Global Enterprise’s regional survey on the rise of Asian platforms, the market is booming and worth over $1.1 trillion USD. The companies’ headquarters are spread across Asia, with the most clustered in China, followed by Japan, South Korea, and Southeast Asia. However, most of these platforms have expanded beyond national borders to provide services to large portions of Southeast Asia.
We look at the rise of digital transformation and sustainability in Southeast Asia
While some platforms have branched out or acquired additional assets to cover various sectors becoming “multi-platforms,” others prefer to stick to one niche market. The multi-platforms include Tencent, Alibaba, Softbank, Baibu, Yahoo! Japan, and Kakao, making up roughly 81% of the total market. Nevertheless, other sectors should not be discounted. The eCommerce sector is worth $148 billion USD, while fintech accounts for $85 billion USD. The social media sector is valued at $48 billion USD, gaming platforms make up $44 billion USD, and transportation is worth $36 billion. These valuations do not take into account the new rapidly growing categories of video streaming and home service providers.
Each sector represents numerous platforms that provide a different type of service to consumers, and their popularity in Southeast Asia is quickly expanding. With the significant number of service-providing platforms entering the market, customers can choose the platforms that work best with their lifestyle.
South Korean and Japanese platforms in Southeast Asia
Line is one of the most popular messaging applications in Southeast Asia. The Japanese-based company has seen massive success in its home country and across the entire Southeast Asia region. The Line application offers numerous features in addition to basic messaging and social media. It has expanded into Line Pay, which allows users to pay for items with their mobile device easily, and Line Taxi, a ride finding service, as well as online shopping and gaming. Line is heavily concentrating on Indonesia, Thailand and Taiwan, where it dominates the market. South Korean corporation Naver also owns a stake in Line in addition to Japan’s Softbank Corporation.
Another hugely successful South Korea-based platform is Kakao, which similarly to Line, provides a diverse array of services, including communication, entertainment, shopping, finance, transportation. While the messaging service is perhaps more used in its home country of South Korea, the entertainment section is wildly popular in Southeast Asia, where there is a hungry market for K-pop, K-dramas, and other forms of Korean media. Kakao Entertainment recently announced plans to launch a webtoon service in Thailand.
Coupang, known as the Amazon of South Korea, is another service provider setting up operations in Southeast Asia, choosing Singapore as its first international destination.
Chinese players making strides in the region
There are many Chinese platforms but the two largest are Tencent and Alibaba. Alibaba bought Lazada which is one of the most popular eCommerce sites in Southeast Asia whose online shopping platform saw a major increase in shoppers during the pandemic.
Tencent recently acquired the video streaming platform Iflix and plans to merge it with WeTV and expand to the Southeast Asian market where video streaming is slowly gaining popularity.
Homegrown ASEAN platforms
Though many large corporations from other countries dominate the market, Southeast Asia also has several platform service providers developed locally in the region. This includes the massively successful transportation service Grab, founded in Malaysia and has expanded to service the entire Southeast Asia region. Singapore-based gaming platform Garena is another success story. Finally, a new startup sector is rapidly growing in the region: the home services booking sector that provides various cleaning and handyman services.
The market for platform service providers in Southeast Asia keeps expanding, comprising a mixture of large corporations and smaller startups hoping to find success and attract customers with their innovations. Consumers today have more options than ever before, and it is definitely worth keeping an eye on these Southeast Asia emerging trends.