According to them, In China, entrepreneurs are brash and more risk-takers; if they see an opportunity in a market, they just go and attack it. They have a ‘do first, ask later’ attitude
China is at least eight years ahead of Southeast Asia, and the companies operating in the region have a lot of things to learn from the Asian giant, according to prominent various leading VCs based in China.
In China, investing in a company and exiting is faster, whereas the process is a bit slow in Southeast Asia, they said while speaking in a panel session on the first day of the Echelon Asia 2018 in Singapore.
“The mindset of Chinese entrepreneurs are different from that of Southeast Asia’s. In China, entrepreneurs are brash and more risk-takers. If they see an opportunity in a market, they just go and attack it. They have a ‘do first, ask later’ attitude. That’s what they are more successful,” said Ian Goh, Managing Partner at 01 VC, an active VC firm in China.
He also said that what Southeast Asian companies are doing now is comparable to what their Chinese counterparts were doing back in 2005-2006. “A lot of companies are coming out of Southeast Asia across various industries including fintech, e-commerce and online travel, but these activities are comparable to what China was doing back in 2005-2006. Southeast Asia is still far behind China and this will continue to be the case for a while from now,” Goh added.
Goh is also of a view that VCs in Southeast Asia are yet to mature. They have not seen the downturn, nor have they seen a full-cycle (of investment).
Goh also believes that it is impossible to replicate Chinese companies in Southeast Asa in the next five years. In this region, there are language issues, licensing issues and payments issues. “Southeast Asia is not even like India. It is like a European Union but without a EU framework. Companies coming from China have to adapt to each of the market in this region.”
He also stated that no US funds are interested in Southeast Asian markets and they don’t want to open offices here. “But there are at least five Chinese funds who have operations here. It is all Chinese VCs who are putting serious money on table, not US funds.”
According to Gan Fon Jek, Managing Partner at Jubilee Capital, who was also part of the panel discussion: “I see a lot of companies want to replicate the Chinese model here in Southeast Asia, but they many not be successful. They can be successful only when they adapt to the new environment and build a business model, which suits the region.
Arrif Ziaudeen, CEO, Chope, an online hotel reservation company in Bangalore, said that it is very hard to find right talent in Singapore. “Twenty per cent of our business comes from China, but one third of our staff are in that country. It was very difficult to find engineers in Singapore. So, we hired people from other countries and brought them to Singapore. Going forward, we set up a remote office in Beijing and hired local people. Talent scarcity is huge in Singapore.”
The panel session, titled “Why Southeast Asia startups and investors should shift their focus from learning from Silicon Valley to China instead, and the role China VCs and tech companies will play in Southeast Asia” was moderated by KrASIA Editor-in-Chief Ben Jiang.
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