While everyone is busy with latest in tech – the rise of aggregators, mobile commerce and messaging platform’s, underdeveloped-developing region is in rising with most of the common internet businesses. No one thought Alibaba could be the largest e Commerce platform led by a man who has a little formal education (with a dangerous vision) and now banked US$25 billion IPO and introduced Alipay and became the World’s largest online payment service after PayPal. This is the answer, that still proven business model can be a success in most of the remote places on earth where internet penetration is still on the rise. No one knew most of the internet venture companies in India 5 years back and now their valuations are over billion and venture capitalist firms like SoftBank & Sequoia are investing in early stage startups.
Why is that? Just have a look at the population density in South Asia, mostly driven by emotional engagement rather than logical ground (potential to enter through carefully driven social media engagement), cheap smartphone,
70% of the people are within 25 – 35 age compared to the western world and more tech savvy
Their demand for a developed life is pushing them further to innovate new things. Now anyone can learn from codeacademy and can build a beautiful program, even if s/he’s not a part of elite group of geek from Silicon Valley. Well, let’s not be too optimistic with online learning. But tech talents are rising from the South Asia too.
McKinsey has mentioned 3 strong trends pushing this rise of South Asia – rapid economic growth, urbanization, and technology adoption. (Source: Techcrunch). Global e-commerce players are getting this vibe and already started investing in South Asian Region. Notable references are Naspers Rakuten, Tencent, Amazon, Rocket Internet and some telecom companies. Rocket is running Jabong.com which is already within #5 eCommerce in India, while Zalora is leading the way of Fashion eCommerce in Southeast Asia. Their marketplace model: Daraz is now existed in more than 4 countries and already scaled up with acquiring thousands of businesses in each country. Alibaba has bought 80% of stake in Lazada and invested in India through Paytm.
Though, some investor may think the Asian story is still not appreciated where 70% of people do not have access to traditional banking service, while card penetration in some markets is below 5 percent. According to Nielsen,
this region will have 400 million middle class with 688 million mobile devices and 200 million Internet user by 2020.
Statista.com predicted in October 2014, where emerging markets have a great potential to lead tech sector in 2015,
where Indian tech market is expected to have $4.8b growth. Bangladesh holds a position in number #6 among other countries
after India, China, Nigeria, Pakistan, and Vietnam despite being the smallest country in South Asia with a constant GDP growth during the recession time.
The startup scene is rapidly changing here and the South Asian market may not need Tesla now, but a traditional e-commerce model can still transform the way people interact and purchase here fuelling by social media and mobile advertisement. The next is here!
The article was originally published at Tech in Asia on June 2015 and later updated for relevant use in 2017. For more tech stuff, click here.