The Alibaba Cloud AsiaForward Startup Day was held on March 24, 2022. As part of the event, KrASIA organized four themed panels by inviting seasoned investors based in Southeast Asia to converse with representatives of notable Chinese startups. The panels covered four significant sectors—fintech, artificial intelligence, robotics, and e-commerce.
Here is a recap of the key points presented during the event.
Spotlight on B2B fintech in Asia
The speakers of the fintech panel were Helen Wong, senior advisor and venture partner of AC Ventures, and Hannah Chen, general manager of overseas asset acquisition at Fuyou Group. Jin Hoo, the co-founder of Fencore, served as moderator.
The panelists agreed that Southeast Asia’s large unbanked population is the key reason behind the visibility of B2C fintech over its B2B counterpart. B2B fintech providers also need to compete with major financial institutions to service enterprise clients. Even so, there is rising investment interest in the B2B2C segment, particularly for startups that target micro-scale businesses. This often leads to access to individuals with lower financial literacy, a segment of consumers that is more difficult to access.
Southeast Asian governments are attempting to foster higher rates of digital inclusion and incubate innovative solutions in the fintech sector. This makes the fintech space more open to private companies disrupting the status quo. Meanwhile, in China, there is intensifying supervision over financial technology.
B2B fintech companies in China and Southeast Asia face the same problem—cash flow management— which is critical as they lack the resources to burn cash for client acquisition in typically long sales cycles.
Navigating Asia’s roadmap for artificial intelligence
The artificial intelligence panel’s speakers were Jeffrey Chi, Asia vice chairman of Vickers Venture Partners, and Logan Xie, senior consultant at Quandashi.
AI is being applied in many facets of business all over the world. An outstanding AI company is one that provides value to its clients. This can be in the form of boosted efficiency or reduced costs.
The panelists spoke about investor interest in AI developers as long as these firms lead to more advanced applications of technology. Even though these companies may not derive any revenue during their R&D phase, investors are willing to cut checks if the risks are managed properly.
In recent years, Chinese companies have been investing more time and capital into the process of developing tech that will yield patents. Patent holders know that their rights to original innovations are protected by law, so they may make contributions that benefit the entire industry, just like when Tesla made an open-source patent pledge in 2014.
Companies that hold patents are also recognized as first-movers who created something unique, with a focus on developing innovations of quality rather than emphasizing the quantity of patent applications.
Reviewing cross-sector developments of e-commerce
The e-commerce panel involved James Tan, managing partner of Quest Ventures, and Zhao Xiaochun, partner at 36Kr Global.
E-commerce is far more than selling merchandise online. Taking the development of China’s e-commerce sector as a reference, it also involves comprehensive capabilities and robust logistics networks. An example is JD.com’s development of its own logistics arm in 2007. JD Logistics has consistently been a strong line of business and went public in 2021.
In comparison, Southeast Asian consumers still do not have access to many conveniences offered by Chinese e-commerce companies, such as same-day fulfillment. The next stages of development of Southeast Asian e-commerce may be shaped by Chinese companies that are expanding into the region, such as Alibaba’s investments and acquisitions.
The intersection of e-commerce and user-generated content in China has led to a more discerning consumer base. This has led brands to invest more in “key opinion consumers”—a term coined by Zhao—as opposed to key opinion leaders with large followings.
Similarly, Southeast Asian consumers are turning away from advertisements, so brands are integrating their products into what appears to be organic content. Many brands that sell products in Southeast Asia are exploring collaborations with local influencers.
How will robots be used in Southeast Asia and China?
To explore business opportunities in the cutting-edge field of robotics, Jeff Lin, senior principal of iGlobe Partners, spoke with Sally Yang, co-founder of Amy Robotics. The panel was moderated by Wong Choon Yue, director of Maju Robotics.
China’s robotics sector is maturing. In 2021, there were 100,000 service robot companies in the country, roughly triple the number recorded in 2019. This has driven down the prices of robots and increased their presence in homes and businesses.
There are other factors that explain this growth. The pandemic has led to demand for robots that can disinfect public spaces. Meanwhile, customers expect more complex products, such as robots that detect human emotions or assist with caring for patients in medical settings. The products on the market have yet to meet these demands, so many firms are developing new solutions to address these needs.
The factors that have led to robot adoption in Southeast Asia are slightly different. A shortage of consistent and skilled labor has led to the deployment of robots in the construction and F&B industries, while the cultivation of Industry 4.0 calls for automation in plants that operate 24 hours a day, seven days a week.
Southeast Asian robotics startups based in Southeast Asia often face more resistance than their counterparts in the United States and China while raising funds. Investors often seek potential portfolio companies that will become segment leaders. This is reflected by the team’s technical capabilities and their projected product-market fit.
These four panels were organized as part of the AsiaForward Startup Day collaboratively organized by Alibaba Cloud and KrASIA.