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Silicon Valley may not be the only hotspot for startups today. Its rival – different in terms of work ethic, consumer behavior, and market size, may steal the spotlight from good ol’ Valley. Southeast Asia is becoming a hotspot for many million dollar startups like Grab, iPrice, Tokopedia, and so much more. Whether you’re an investor or an aspiring entrepreneur, your million-dollar business idea might just become reality in Southeast Asia.
One of the best reasons why you should establish your startup in Southeast Asia is its growing consumer appetite. Consumers pose a major part of the economy with younger, working-age professionals and yuppies making up most of the market. However, this demographic in developed markets from the West are steadily decreasing, making it harder for startups from Europe or the United States to sell their ideas to spending consumers.
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In Southeast Asia, on the other hand, is the exact opposite. The growing number of working-age yuppies is forecasted to hold an economy that would fit any startup’s needs. Millennials in Southeast Asia make up a huge part of Southeast Asia’s spending consumers, making it the ideal hotspot for a startup.
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If your idea involves technology and smartphones in general, then the more reason you should set up shop in Southeast Asia. Digitalization in the region has been growing exponentially with more people using their phones every day. Countries like Thailand, Malaysia, Indonesia, and the Philippines have more smartphone to PC ratio compared to western countries such as the U.S. and Germany.
Smartphones play a huge role in propagating your startup in terms of marketing. In the Philippines alone, there are 33.3 million smartphone users in the country with a projected increase to 40 million in 2 years’ time. This opens a new avenue for marketing through social media, as well as developing apps that would boost your startup’s performance.
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The rise of ventures in the region has prompted governments to support startups; after all, good business means good economy. Startup-centric initiatives from the government like in Malaysia, the Malaysian Global Innovation and Creativity (MaGIC) and Selangor Information Technology and E-commerce Council (SITEC) aims to help cater to the growing e-commerce and startup space in the country. Singapore has established a number of startup grants to help budding companies kickstart their business. From the founder of The New Savvy Anna Vanessa Haotanto “Southeast Asia is great for business due to the recent increasing support from government and corporations, exciting business environment and a maturing young population”.
With Southeast Asia’s market potential, supportive governments, and eager entrepreneurs, a sea of active investors is just waiting for you to establish your own startup. Each year, $5.3 trillion of global trade passes through Southeast Asia, becoming one of the United States’ largest investment destinations. By 2030, it is projected that region would become the fourth largest market right next to EU, US, and China. In 2013, Southeast Asian countries like Malaysia, Indonesia, the Philippines, Singapore, and Thailand received a total of $128.4 billion of foreign investments growing 7% from the previous year. With these promising numbers, there can’t be a more perfect time to establish a startup in Southeast Asia than now.
Among the best reasons why you should set up shop in Southeast Asia is the region’s incredible work culture. Southeast Asians take the phrase Work Hard, Play Hard to a whole new level. According to the Genome project, Singaporean startups work more hours than the rest of the world, making this a conducive work environment to create a startup. After all, establishing a company is not as simple as baking a cake where you have all the ingredients and put them all together; it’s tons of hard work, and late hours at the office.
In return, entrepreneur’s reward their hard-working employees with great compensation, a promotion, team building events, and so much more. In the Philippines, companies with toxic work environments such as call centers reward their employees with incentives and exciting company events almost every month to relieve stress and build strong work relationships with colleagues.
In a startup, or any company for that matter, needs hardworking, passionate, and skilled employees. Like the foundations of a building, they are the backbone of the company that helps you materialize your idea into a profitable business. As what you have learned from the previous point, Southeast Asians work more hours than any employee you could ever have. However, working longer work days does not always mean productivity. What you need in a startup are talented individuals who are the best of what they do.
In Southeast Asia, you will have the opportunity to work with a multitude of people from different ethnicities, backgrounds, and work experiences. The region is a cultural melting pot of some of the best employees you could ever have in a company skill wise. Regardless of what type of business you are in, you would surely find a skilled employee that would meet the needs of your business.
Compared to Brazil, Russia, India, and China, Southeast Asia is larger than both Brazil and Russia combined in terms of market size, growing as fast as China with an 8 percent growth every year, and even faster than India. By now, you would think that many are flocking to the region but that is not what’s happening right now. The Southeast Asian market is still in it’s infancy – almost comparable to China some 15 years ago. Those that came to country around that time are considered as millionaires, even billionaires – something that you should think about if you plan on establishing a startup in Southeast Asia.
A startup allows budding entrepreneurs to turn their ideas into a profitable business. With hard work, and much needed help from its employees, investors, and the government, your startup could be the next Facebook or Google.
Written by Marjorie Mae & images compiled by Jeremy Chew from iPrice Group.