Southeast Asia tech trends are all pointing towards more growth in the region. Increased overseas investors generate interest as the sector grows. As more money floods into ASEAN, companies and governments expand infrastructures and bring their products to a more extensive customer base.
Here are three tech trends in Southeast Asia that are helping make this happen.
Vertical eCommerce will continue climbing
Since eCommerce has grown at an incredible rate over the past couple of years, almost every country in the region has witnessed its market volumes triple by the end of 2021. Indonesia alone had a gross market volume of $70 billion USD from eTail sales during 2021. Predictions also show that by 2025 Indonesias’ market volume will have nearly doubled to $104 billion USD, and the entire Southeast Asian region will have a volume of $232.8 billion US dollars. Companies such as Shopee, GoTo, and Bukalapak prove that startups have numerous opportunities to experience colossal growth in this ever-evolving environment.
It’s not only eCommerce revenue streams that benefit from the boom in Southeast Asia’s economy, supporting infrastructure such as foreign currency account is also helping eCommerce businesses thrive in a competitive global market. Multi-currency exchange accounts allow eCommerce companies to open multi-currency accounts without visiting a branch and start collecting payments in a customer’s preferred currency right away. By streamlining payments in this way businesses can serve customers better which only fuels the success and growth of the region’s economy.
The digital decade: The internet economy in Southeast Asia is poised to touch $1 trillion USD by 2030
Investors are showing a tremendous level of interest in Southeast Asia, with numerous startups gaining Unicorn status in 2021. This upswing in successful startups coupled with more of the population gaining internet access and the evolution of the necessary infrastructure to develop and encourage the use of the growing fintech industry provides a promising forecast for the future of eCommerce.
More IPO records will be broken
2021 brought a massive increase of activity for IPOs, making it the most prolific of the last 20 years. In 2021 alone, 2388 deals took place, raising approximately $453.3 billion USD. This increased activity primarily resulted from a combination of government stimulus programmes and heightened investor transactions, driving the market further than it had been for decades. Grab broke the record with its entry to the public market on the Nasdaq via a $40 billion USD merger with a special purpose acquisition company (SPAC) in December of 2021, leading the way for others in the region to do the same.
However, it’s doubtful if they will hold this record for much longer. GoTo, a super-app created through a merger between rival ride-hailing and food delivery startup Gojek and eCommerce platform Tokopedia, is preparing to make its listing debut by the middle of 2022. Currently, GoTo has a gross value of over $22 billion USD and acquired another $1.3 billion USD in funding during its first round of pre-IPO fundraising in November, helping set the stage for its flotation.
Shopee, owned by the Sea group, is the biggest online marketplace in the Southeast Asian region and Taiwan. In 2021 they expanded rapidly, reaching every continent and building business in some of the most competitive eCommerce markets in the world, from America to India. The Sea group is one of the world’s most valuable companies with a $111.88 billion USD market valuation.
Unicorns will continue to sprout up across the region
Over 35 startups across a myriad of tech fields have achieved unicorn status in Southeast Asia, with 2021 being particularly fertile, with 19 minted by October of last year. Currently, over 200 startups in the region are considered significant, and many more are popping up by the day. Thanks to companies like Grab and GoTo, both valued between $35 and $40 billion USD, many investors from around the globe are turning their attention towards Southeast Asia with renewed interest.
Jungle Ventures calculate that the region’s digital companies are worth roughly $340 billion USD and estimate this number will grow to $1 trillion USD by 2025. Considering the pace at which the tech industry has evolved in the past five years, this may not be far from the mark. With many unicorns still proliferating and companies such as Ovo, Indonesia’s largest platform for digital payments, having over 110 million users and more than 300,000 retailers already using their product and millions more potential consumers in the region, it’s easy to see why.
These three tech trends in Southeast Asia will continue to rule this year as the region’s population becomes more tech-savvy and reliant on eCommerce and fintech solutions in their lives. From the amount of growth that has already occurred in the past five years, it’s hard to believe that such a growth rate can continue, but the industry shows no signs of slowing down as new products and technologies emerge every day. If anything, the speed at which the industry grows increases day by day. As more unicorns spring up in the region, eCommerce, in particular, will grow at an unprecedented rate and with this escalation, many more investment and floatation records will be broken. These Southeast Asia tech trends look set to continue supporting the development of the region’s digital economy for many years to come.