Tech
How is the technology market evolving in the SEA region?
In recent years, the technology sector has grown rapidly in the Southeast Asia region, with a growing number of unicorn companies.
Two of the fastest growing areas in the tech sector in Southeast Asia have been the artificial intelligence and cryptocurrency markets.
According to data provided by Statesmanthe artificial intelligence market in the region will reach a value of $6.72 billion this year.
What are the most used business models in the SEA technology market?
There are various business models used by technology companies in the region; some of the most used are:
Sustainable businesses
In recent years, the business model of companies focused on the sustainability business segment, known as the Green Tech market, has grown.
E-commerce platforms
E-commerce platforms have quickly positioned themselves as one of the fastest growing business models in the SEA region, with rapidly growing demand in countries such as Thailand, Singapore and Vietnam.
Payment systems
Fintechs are usually characterized by providing various payment alternatives to the payment systems offered by traditional financial companies, some examples of which can be payments using QR technology or virtual wallets such as Grab Pay and Lineman, among others.
Loan
There is a large population within the SEA region who cannot access credit due to poor credit scores; fintechs are helping this segment of the population access credit through lending models.
Cryptocurrencies and the Web 3
The cryptocurrency industry has grown rapidly in Southeast Asia, most of the companies in the cryptocurrency market are part of the fintech market, from exchanges to wallets to operate with cryptocurrencies.
Pavel Zavadskii, founder of Biqutex, added: “Cryptocurrencies are definitely one of the fastest growing ways to pay for goods and services in Asia, mainly due to low transaction fees. Furthermore, one of the success factors is the absence of unnecessary regulatory barriers and, consequently, the opportunity for any company to quickly start accepting cryptocurrency payments.”
The challenges for the SEA technology market
Technology companies have shown rapid growth in recent years, however, in the early months of 2024, they have faced some challenges.
One of the major challenges the tech ecosystem has faced in the Asian region has been financing.
Crunchbase reported that global startup funding in the first three months of 2024 reached $60 billion, one of the lowest figures recorded since 2018.
Likewise, funding in the technology market in the SEA region has shown a downward trend, except for the particular case of companies in the artificial intelligence market segment.
Claudio Cossio, co-founder of Meta Pool, added: “Fragmentation is a key challenge for Fintech platforms in Asia and localization will be key to unlocking user engagement through local promotions, access to credit lines and platform integrations consolidated digital channels such as WeChat and Kakao.’
Second Business timesStart-up funding fell 40% compared to the first quarter of 2023, reaching $1.36 billion. A clear example of the difficult situation the market is facing has been the massive layoffs carried out by companies such as Google, Tesla and others. Amazon, among others.
The future of the technology market in Southeast Asia undoubtedly appears bright, however a policy review by countries in the region will be necessary to attract investors.