SINGAPORE – New technology is set to drive change in Southeast Asia as equity funding in startups more than doubled in the first eight months of last year, disrupting and enabling every industry in the region.
Maybank Kim Eng Group CEO Dato John Chong said funding to tech startups among members of the Association of Southeast Asian Nations (ASEAN) amounted to $6.5 billion from January to August last year, 110 percent higher than the previous year.
Chong said the technological environment in ASEAN is still at an early phase of growth despite the disruption the marketplace is experiencing.
He said the penetration rate in the region remains relatively low at between two and five percent as compared to more established markets like China with 19 percent, Korea (20 percent), and the US (10 percent).
Data showed the Philippines has the smallest online sales share in the region with 0.8 percent versus Singapore’s 4.6 percent, Indonesia’s 1.8 percent, Thailand’s 1.7 percent, and Myanmar’s 1.6 percent.
He said e-commerce transactions would grow exponentially in ASEAN, driven by innovations in e-payments and tech platforms.
The tech sector is also increasingly attracting more China mergers and acquisitions investments in recent years, reflecting the rapid offshore expansion of China’s emerging tech titans. Notable deals include Alibaba’s purchase of Singapore-based ecommerce player Lazada, JD.com Inc.’s investment in Indonesian online marketplace Tokopedia, and Tencent’s investment in Indonesia’s ride hailing service Go-Jek.
“For Maybank Kim Eng, the dual rise of China and tech presents new opportunities for us. For instance, we are looking at how we are able to provide access and open up channels for our clients to participate in this growth. We are also keen to capture the financing opportunities, particularly for the infrastructure projects,” he added.
John Lee, CEO of Maybank Singapore, said new technology affects almost all industries around the world including banking, and the level of development and investments would vary in each country.
Fortunately for the Philippines, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. has already acknowledged the huge potential of digital technology to transform financial service delivery, specifically in the area of payments and remittance.
“There is power in leveraging on digital technology as a connector of people. High-speed digital networks allow funds to move across the globe at a much faster, cheaper and convenient way compared to traditional models. Their use is game-changing for the unbanked, given their affordability and wider reach,” Espenilla said earlier.