In the past five years, Internet penetration in Southeast Asia has raised exponentially. As rising incomes and rapidly developing infrastructure have allowed nearly 200 million users across the diverse region access to mobile services, ASEAN countries are now booming with potential in e-commerce.
Korean start-ups have struggled to break into the fray of competition and now the route has been changed to Southeast Asia. The Southeast Asia market is very attractive because of the population & GDP growth rate.
Korean start-ups have a great environment, such as the high-tech infrastructure and trend-setting e-commerce and mobile markets, to build a product to be globally competitive.
The region’s most alluring market is Indonesia with 250 million people who are rapidly embracing mobile services. Local tech giant Kakao has jumped on board by acquiring Path, a U.S.-made $66 million social networking app with 4 million users in Indonesia, in its build-up to globalize.
Seeing this, the trend for mobile advertisements in the country has been set to twice the price tag as in Korea, according to Alex Kim, a director at SoftBank Ventures Korea. Digital ad spending is projected to grow some 70 percent this year.
Another reason for routing towards ASEAN countries is lower labour costs; foreign companies often underestimate the amount of investment and preparation they need to enter the region. Kim of SoftBank’s Korea arm advises start-ups to brace themselves with solid staff and meaningful funding.