Report suggests Indian startups should target digital market worth $430 billion in Southeast Asia.
- ByStartupStory | March 6, 2023
The digital economy in Southeast Asia is currently valued at $210 billion and is projected to increase at a compound annual growth rate of 15% to reach $430 billion. This presents an opportunity for Indian startups seeking to expand internationally to consider the Southeast Asian market, as the region’s population of over 650 million people and 70 million small and medium-sized enterprises (SMEs) are becoming more affluent and technologically proficient, resulting in a strong demand for new and innovative products and services.
Redseer Strategy Consultants, a market research firm, believes that “now is the perfect time for companies to consider exploring and expanding into Southeast Asia, given its appealing location and significant growth prospects”.
The region’s economy has shown remarkable progress, reaching a remarkable $3.2 trillion in 2021.
Although conventional categories like e-commerce, travel, ride-hailing, and food technology will play a part in driving the digital economy, a larger portion of the projected $220 billion growth is anticipated to stem from emerging categories such as online content, gaming, agritech, classifieds, and others.
The report also predicts that the digital economy will be fueled by the increasing significance of small and medium-sized enterprises (SMEs), the emergence of new e-commerce ventures, and the presence of concentrated opportunities in urban centres throughout the region.
Although Singapore has traditionally served as an entry point for the Southeast Asian region, the report suggests that emerging markets like Indonesia, the Philippines, and Vietnam offer particularly favourable conditions for digital startups due to their higher spending power and greater digital adoption.
Despite facing macroeconomic challenges, the region is expected to experience a GDP growth rate of approximately 5% in 2023, reinforcing the case for an upcoming period of growth.
Moreover, the report notes that “95% of all registered entities in the region are micro, small, and medium-sized enterprises (MSMEs), representing significant potential for startups and investors looking to enter the Southeast Asian market”.
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