15 Mar 2018
Bukalapak earned its unicorn status by focussing on Indonesian farmers and small-time merchants often neglected by bigger rivals.
"Indonesia’s communications minister has already tipped that the country will have a fifth unicorn by 2019”
The tech company joined ranks alongside three other billion-dollar start-ups home grown in south east Asia’s largest economy: Go-Jek, Traveloka and Tokopedia, bringing the total number of unicorns in the ASEAN region to seven.
Indonesia’s communications minister has already tipped that the country will have a fifth unicorn by 2019, most likely from healthcare or education.
The digital economy in south east Asia is being driven by youthful and tech-loving populations, rising disposable incomes, access to cheap devices and greater connectivity.
Almost every aspect of business and social life in south east Asia is being transformed by this new economy.
Research shows there were more than 7000 digital start-ups in south east Asia in 2016 with 80 per cent based in Indonesia, Singapore or Vietnam.
With an estimated 3.8 million new users coming online each month in south east Asia, ecommerce across the region is also expanding at pace – with projections looking at 14 per cent growth over the next five years, a figure only matched by India.
The region has embraced social media enthusiastically with Jakarta recently crowned the global Twitter capital and south east Asia is collectively the largest adopter of Facebook anywhere in the world.
“South east Asia is leapfrogging technologies,” George Iwan Marantika, President of the Indonesia-Australia Business Council Yogyakarta says. “It’s a new frontier.”
Marantika, who is part of an advisory group assisting the governments of Australia and Indonesia with the current free trade agreement negotiations (the IA-CEPA), says the opportunities are ripe for Australian and south east Asian businesses to collaborate on the digital economy.
“Our businesses can innovate and incubate together and build an ecosystem,” he says. “Indonesia and Australia need to create and converge capabilities and resources to seize these opportunities.”
Australian IT firm, PNORS is partnering with the Indonesian Government to provide highly integrated ehealth solutions and help revolutionise healthcare.
But with the digital landscape changing so quickly, it can be tricky to assess which trends and developments will inform decision making of the future, or which industries will offer the most promise.
Like a sunrise
A recent report has identified the top-seven emerging industries within ASEAN countries that will drive future regional growth.
Ranging from high-value nutrition; fintechs; AI and energy storage, the Sunrise Industries report provides a snapshot of new sources of growth arising due to technological, regulatory, economic or social change.
In particular, it highlights key industries of the future where there is strong potential for Australian business to get involved.
"While some existing industries will decline, there are a set of emerging industries underpinned by advances in science and technology that will contribute to ASEAN's growth," Data61 Senior Principal Scientist and report co-author, Dr Stefan Hajkowicz, explains.
Sources of growth
1. Artificial intelligence and automation
Large and small companies, which design, construct, and operate, automated systems.
2. Financial and regulatory services technology
Enabled by technology and growing demand for innovative financial services.
3. High value nutrition
Rising demand for healthy, traceable and trustworthy food products that are sustainably and ethically produced, giving rise to an industry focused on high value nutrition.
4. Next generation energy storage and distribution
Improvements in the affordability and capability of batteries, other technological innovations and consumer demand for clean energy solutions.
5. Cyber-physical systems security
6. Personal health and ageing
Products and services related to personal health and ageing (e.g. apps, wearable devices and mobile/telehealth services) along with personalised health and aged care.
7. Digital infrastructure and connectivity
Opportunities for the digital infrastructure industry to respond to the growing connectivity demand.
“History has demonstrated the value of sustained investment in technologies and collaboration,” Chelle Nic Raghnaill, Data61’s Commonwealth & Health Tech Lead, adds.
“It’s now time to marry the capabilities of Australia with those of ASEAN nations.”
The latest report from Asialink Business shows new and sunrise technologies are revolutionising how people go about their daily lives and are prompting international businesses to think seriously about how they engage with consumers in ASEAN markets.
In some south east Asian markets where take up of bank accounts is still low, companies are finding novel ways to help customers with payments by phone becoming increasingly common.
In Jakarta, rideshare and tech start-up Go-Jek now enables its customers to use Go-Jek’s app based wallet to pay for everything from a coffee, to a massage or lunch.
Australian businesses have an opportunity to play to their strengths and areas of expertise, especially in fintech and regtech, where Australia’s well-known financial services capability provides a strong base.
Take Stone and Chalk, a Sydney and Melbourne based fintech start-up hub using south east Asia to springboard into global markets.
South east Asia’s digital future is already attracting strong global attention and competition.
Indonesia has emerged as a coveted market for the world’s top e-commerce players, including Alibaba Group Holdings and JD.com Inc.
Australia is well positioned to provide seed innovation and ideas, and partner with ASEAN countries on their digital transformation, but new ways of thinking and doing business will be required.
As Damien Bailey, Partner at law firm HSF says, data might be the new gold, but “parallel to being digitally savvy is the need for other capabilities - people who are well rounded, flexible thinkers, creative and empathetic.”
To seize the full potential of ASEAN’s digital future, business will need people who are curious, can imagine a new world and think big - not just tactically.
Donna Webster is the Director of Capability Development at Asialink Business.
This article is based on insights from the #ASEANinAus business forums and exclusive industry briefings, held in partnership with HSF, for the 2018 Asialink Leaders program participants.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
15 Mar 2018
30 Apr 2018