Startups Eyeing Southeast Asia: Key Considerations to Ponder Before Expanding (Part 1)

Tuesday, 18/04/2023 20:00 (GTM +7)

The Potentials of the Southeast Asian Market

Despite the world’s economic recession in 2023, Southeast Asia is considered a potential area for startups to expand; there are reasons:

Large market size (680 million people) with an expected growth rate of 4-5 % per year. (*)
The total value of goods in the digital economy is expected to reach $200 billion by 2022, three years earlier than previous predictions. (**)
Strong Internet growth with 20 million new users by 2022, reaching 460 million. (**)

In addition, attending trade agreements will allow Southeast Asia to reach out to Asia, Europe, and North America. The Regional Comprehensive Economic Partnership (RCEP) comes into force, along with the investment facilitation mechanisms and policies recently signed by ASEAN, which are expected to help promote more sustainable FDI in the medium and long term.

In particular, Vietnam is a rising star (Cento Ventures and ESP Capital) and owns the 3rd most dynamic economy in ASEAN, after Singapore and Indonesia, with political stability, a qualified young workforce, infrastructure, digitalization, innovation, and government support.

ITI Fund - Sky Mavis là startup kỳ lân thứ 4 tại Việt Nam - đứng thứ 3 Đông Nam Á về số lượng startup kỳ lân (năm 2022)

Sky Mavis – Vietnamese’s 4th tech unicorn

Venture capital (VC) plays a vital role in this development by startups incubating and accelerating programs. In addition to pumping, VCs also support knowledge, operational activities, and commercial production, contributing to startups reaching international markets and raising Vietnam’s innovative startup ecosystem more exciting, attractive, and quality.

Notices when startups want to expand the market in Southeast Asia

Research the local market

Southeast Asia is a rich and typical cultural history as Indonesia, Thailand, Vietnam, Philippines, and Malaysia… have unique cultural, landscape, economic, and highly diverse politics. Therefore, carefully researching the local market before entering is essential for startups.

Understanding the demographics, environment, regulatory, and competitive landscape of Southeast Asian countries will help startups identify potential challenges and opportunities. There are some ways:

Depth discussion with local experts about the domestic market potentiality.
Gather the latest quality research and government information updates.
Explore domestic customer insights through group interviews.
Study the point market legal.

Expand the partner network in the point market

Partners include suppliers, distributors, related organizations, or even customers. Building and expanding a network can help businesses gain a deeper understanding of the market, identify opportunities, and overcome challenges.

To connect with these partners, there are following ways:

Actively monitor and participate in regional networking events
Be a member of local business associations or organizations
Update information and directly contact potential partners

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