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Grace Sun Xia, Tencent’s Senior Director of Corporate Strategy and Investment, sat down for a highly anticipated fireside chat with Harry Wang, Founding Partner at Linear Venture – a VC that works with early stage startups in China – at Echelon Thailand.

I identify opportunities in other markets, and bring in companies to Tencent’s ecosystem,” says Grace, who spent time in Silicon Valley studying & working but returned to China to capture of its market opportunity.

What are her views on China’s ecosystem?

“In China, there is a large capital pool where a lot of companies can go big in a short amount of time.”

“China VCs are constantly looking at Asian markets – our secret is to get local and capable companies to work with us. We want to back them throughout the multiple stages of their business and we want to work with proven Chinese business models to help them succeed.”

What are her views on Southeast Asia’s paralleling ecosystem?

“Tencent started the process looking into the region two years ago,” says Grace. “There are more opportunities than challenges.”

Tencent led Go-Jek’s investment round for $1.2 billion in early May this year to strengthen its presence in Indonesia.

“Southeast Asia is a unique environment, the size is decent, the GDP is $2.3 trillion so technology and innovative business models can drive a large value increase,” says Grace.

Tencent’s Senior Director of Corporate Strategy believes a few business models can be successfully replicated in the region:

  • Share economy: it picked up great momentum in China and has good expansion potential in Southeast Asia.

China is in the process of transitioning from a manufacturing to a service centric economy and this is where “sharing” can drive the shift forward. But big corporations, regulators and the government need to work together to put boundaries around the sharing economy.

  • Tech infrastructure: payment apps need to be built to overcome the lack of credit card adoption.
  • Omni-channel: convergence of online and offline where brick and mortar stores can be used as fulfillment centres.

“In China, all the major ecommerce players have been investing in grocery stores and consumer electronics chains to gain access to a massive population that still shops offline.”

  • Diverse content & media space: China’s media space can facilitate anything from donations, transfer of virtual goods, content licensing, advertising, etc.

“Social platforms don’t have to be the centre piece of all services, Go-Jek is a good example as they are on the way to becoming a WeChat platform. Platforms with high frequency transactions can begin to monetize the traffic.”

“Content is king for all media companies in China. Those with the capability of creating IP (intellectual property) are able to connect with their fans, make income and own all rights to their content.”

Her final comments?

“China is know to be able to re-invent business models, but actually a lot of the new tech is coming out of China. How can anyone get sick of China’s market? There’s so much.”

#EchelonTH2017

“Sustainability is not a tech problem, it is a human weakness.”

A fireside chat about Thailand’s competitive advantage at Echelon Thailand 2017 revealed a few more interesting tidbits regarding startup up growth, government involvement, and investment best practices shared by industry expert Dr. Alex Lin, Head of Ecosystem Development at SGInnovate, an establishment that connects over 7,000 regional and global corporates.

Let’s dive in.

The government, the corporation & the startup

“Governments love corporations because they bring jobs and money. Startups hate corporations because they are so rigid. It’s all love and hate,” says Alex.

“The moment you build a lot of startups, corporations will move in because very simply, they cannot innovate. Innovation threatens the CEO, he doesn’t want anything to come in and ‘kill’ his job.”

So how should businesses go about innovation?

“What’s the definition of innovation? It’s looking at the status quo and changing it.”

“What is the job of the government? It is to uphold the law – follow the rules that they created. They aren’t able to change the law, only the top dogs, so are they innovative?” explains Alex.

Governments need startups to innovate, they need the corporates to provide the customer base, domain knowledge and infrastructure and they themselves need to push initiatives – all three units need to work together to create a healthy ecosystem for growth. But unfortunately, this doesn’t always end up being the case – why?

“A strong opportunity for Thailand is fintech because there is a large chunk of the population not being served, they are the unbanked,” says Alex. “If they don’t have a lot access to finances, per unit cost is higher and they can’t buy in bulk.”

So why are there still so many unbanked (approximately 72% of Southeast Asia to be precise)? Banks simply aren’t interested in them.

And if fintech startups are being mentored by a bank, they end up becoming products of the bank to serve their agendas.

“Over 600 startups that were mentored by a bank and none of them ended up serving the unbanked.”

What other business opportunities exist in Thailand?

“Digital healthcare is a good market for Thailand because the country is a very homogenous market, i.e. everyone wants to be whiter, while in Singapore you have a mix of tan is good, white is good,” says Alex. “Thais are also willing to experiment with treatments.”

“What about not-for-profits startups?” asks an audience member.

Dr. Alex Lin here pulled a Donald Trump (in his own words).

“Global warming is a great cause and I would gladly donate or attend fundraisers for these charities but I would never invest in them because there is no ROI.”

“If you are a startup, you need to think about who is going to pay you and if you can’t survive, you have to figure that part out first.”

‘Solve people’s problems first. Don’t build technology and try to fit it in somewhere.’

 

#EchelonTH2017

Singapore based media site e27 has raised $2.2 million Series A round led by TechTemple Group, the company announced on its website. Other investors include Linear Venture, Convergence Ventures. Venturecraft and Spacemob.

Mainly known as a tech focused media outlet, co-founder and CEO Mohan Belani insists that media is only a small part of what e27 represents.

From day one, e27 has always been an ecosystem builder. We’ve always had a vision of creating products offline and online that would help us achieve that vision. 

The company has launched jobs platforms, a startup and investor database, and a B2B marketplace. e27 is also the company behind the Echelon series of startup and investor conferences. Belani clarifies,

“At this point, the natural direction for us is to weave the online and offline functions in order to create a full-fledged, interactive ecosystem product, not just an uni-directional digital media.”

Bridging the gap between China and Southeast Asia is crucial

China has impressive market opportunities, made up of companies and people who have accomplished what Southeast Asia is currently trying to do. e27 aims to collaborate with its new investors, who are based in China, and provide more know-how towards the landscape, the language, network and professional interest barriers.

Currently, there are mid-sized and growth sized startups in China that are interested in expanding into Southeast Asia. The trend is being led by tech titans such as Tencent, Baidu and Alibaba, who have successfully paved ways into the booming market. e27 wishes to drive the growth of Chinese startups into the region by providing them with the right tools.

Indonesia’s role in driving Southeast Asia’s growth

e27 plans to collaborate with Convergence Ventures, one of the investors from this round, and leverage their strong investment network in Indonesia. This ties in with the company’s goal to facilitate stronger cross-border ties between key players in the region and China.

Jerry Wang, Founder of TechTemple comments,

“China’s rapid development of the internet industry brings important lessons to Southeast Asian entrepreneurs, as well as opportunities for cross-border collaboration. Localisation is also very important, hence investing in e27 would bring a wealth of local knowledge and connections for China.”

A version of this appeared in e27 on July 27. Read the full version here.

The Future of Telcos in Southeast Asia

Source: e27

The future of telcos in Southeast Asia will be impacted by a strong de-concentration process says the experts on stage at Echelon Asia 2016. Ecommerce ventures can reap most of the benefits from this process as long as they are able to leverage new technologies to build innovative telco solutions for the region.

It is way more than launching an app. It is about network effect.

Mittman, Co-founder and Vice President of MyRepublic, went on to explain that the mega trend of the next 10-20 years will be the de-concentration of the telecom industry that has long been one of the most concentrated in the world.

Which is why, according to Karianne Melleby, Vice President and Head Of Digital Partnerships at Telenor, the next step is about forming partnerships, which requires education.

“Our vision is built on the need of the telco to disappear, but in a way that provides services. When you digitalise everything like, for example, ordering food online, it needs to be completely smooth.”

Gupta said that it means leveraging new technologies, like Cloud computing and payment platforms, because entrepreneurs need somebody to meld them together — which is where the telcos can step in.

In order to launch the telco company of the future, three things are required:

  • Regulation
  • Smartphone penetration
  • Demographics

The two latter are already strongly shaping the future of telcos in Southeast Asia. What is lacking is proper regulation, complexity of the market such as different countries and the legal system makes the process slower but recent projects launched by authorities show very encouraging signs.

A version of this appeared in e27 on June 15. Read the full article here