Business & Economy Startups Navigating the Southeast Asia Ecosystem: An Essential Guide for International Startups

Navigating the Southeast Asia Ecosystem: An Essential Guide for International Startups




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The world truly is an oyster for startup founders who are scaling their businesses in overseas markets, and Southeast Asia (SEA) is a hot destination

Home to a population of over 650 million people, Southeast Asia is often heralded as the next big economy. SEA has more than 330 million monthly active and young internet users, making the region incredibly receptive towards new technologies that can potentially disrupt the local ecosystem.

2018 recorded an abundance of investments with US$17.9B recorded funding raised by SEA-based startups and according to Google’s e-Conomy SEA 2018 report, SEA’s digital economy is forecasted to triple in size and reach US$240 billion over the next seven years.

Navigating Southeast Asia’s Diverse Backyard

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A growing pipeline of customers and increased revenue generation are often motivations for startups to begin thinking about overseas expansion. The region’s receptiveness towards technology adoption and magnetism for burgeoning capital funding, make it attractive for startups from outside the region to consider expanding into SEA.

While the market opportunity certainly exists for startups to tap into, establishing a sustainable foothold in a new market has its own challenges, particularly in a region as diverse and dynamic as SEA.


Is the time right for expansion into an overseas market? Does your startup’s product or service solve an existing problem in the market(s) you intend to penetrate and have the necessary product features that are transferable to meet local customer needs? It is not uncommon for startups to have their business offerings validated in their domestic market, yet struggle to replicate this template in a foreign market where the same product-market fit may not exist.

In the case of SEA, a “one size fits all” business model does not translate well. By leveraging on the expertise of local partners in its expansion plans, Grab’s localisation strategy has seen the ride-hailing company grow to become the SEA powerhouse it is today.

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Grab addresses the needs of the local market by being culturally relevant – in Indonesia, they utilize bikes to cater to the locals’ preferred mode of transportation while in Singapore, they have begun offering pet-friendly rides to meet the needs of the high number of pet owners.

Understanding the local market and your competition

How do you stand against the other players that exist in the market of interest? A startup might have a few hundred thousand users in Australia or Hong Kong, but that level of traction may not be translated in Jakarta or Singapore.

Understanding the number and quality of existing players in the market puts you in a position to think if it is a worthwhile endeavor to invest into the market and the extent of resources required to gain sufficient market share. It is not to say brands offering similar services cannot co-exist; in fact, we see benefits to having healthy competition.

The e-wallet, travel booking and messaging platforms domains are good examples. However international startups need to be able to present a core competency that can deliver a unique set of the value proposition to the intended customers, and which cannot be easily copied or bought.

Financial and operational readiness

Is your startup financially ready to bear the operational costs of scaling into new markets? Unless you have invested market dollars over a reasonable period of time to build your brand presence internationally, your brand equity overseas is negligible.

Resources have to be allocated to build new partnerships, create brand awareness and build a business process that can sustainably support new international business contracts. Collaborations and partnerships with local entrepreneurs and investors who have a better understanding of the market may be useful for startups to lower some of the direct market entry costs and associated risk.

A clear, measurable plan

Do you have a roadmap for success? It is critical for you to be strategic in pacing the growth of your startup and have a clear, measurable roadmap in place before taking the plunge. Uber’s failed entry into the region, where they took an “enter first, think later” approach did not work to their favour.

Although it is nigh impossible to predict market dynamics in its entirety, learning from the successes and failures of incumbents can greatly improve your startup’s odds of success. Anticipating possible risks and drawing up their mitigation measures can fast-track the decision-making process.

Cultural Diversity

Startups must also understand the various government regulations and infrastructure unique to each jurisdiction. The region presents various forms of bureaucratic red tape, legalities, and infrastructure. By understanding the infrastructure that is available or lacking in the markets, startups will be able to develop business models that comply with existing regulations.

Being culturally sensitive to how business is conducted can sometimes be the sole determinant to your startup’s success in the region. To ease the process or validate observations, startups can turn to neutral intermediaries such as government bodies that assist overseas-based startups for support.

Also Read: SaaS parcel tracking platform Parcel Perform lands in Europe

For instance in Singapore, there are initiatives established by the government and private entities such as Austrade’s Landing Pads program, Enterprise Singapore and ICE71 in which startups can participate in to accelerate their entry into the region. Austrade’s Landing Pads program provides later-stage Australian startups with a tailor made residency program that offers business advice and contacts to successfully launch their business in Singapore and the region.

Once international startups make it out of the maze that is SEA, they can reap the immense opportunities that the region offers. By establishing an understanding of the inner workings of the region, they will then be well-positioned to build a foundation for entry into the global market. After all, SEA is the gateway to Asia and the world.

The post Navigating the Southeast Asia Ecosystem: An Essential Guide for International Startups appeared first on e27.

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