SEA. As the China innovation and capital scene slowed in the past year, attention has rapidly shifted to South-east Asia. In early November, The Mills Fabrica had the pleasure to participate in Green is the New Black’s Conscious Festival in Singapore. We also had the chance to meet with various government teams, investors and startups in the city. Here’s some highlights for us.
Innovation and Techstyle wave growing well
Singapore’s tech ecosystem has grown fast and strong in the past few years with the Singapore government providing strong policy and support. These include providing seed grants (~$100-500K SGD) that startups can apply for, providing funding for corporates to undertake innovation and implement new technologies, to coordinating with different players to go digital (e.g. recent efforts by MAS to get all banks to adopt digital payments/ transfers is one example). In addition, various arms (from SG Innovate to Smart Nation team) of government exists both to invest for Singapore’s strategic needs as well as to implement innovations to take the nation digital. In the field of Techstyle, the government has placed design as a strategic imperative, most recently shifting the Design Council to be under the mandate of the Economic Development Board. In addition, TAFF would also be launching a design incubation programme housed under the new Design Orchard building that will open in January 2019. All these have hence contributed to a vibrant growth in both the innovation and Techstyle ecosystem.
SEA market can benefit from time-machine that China’s development brings
With the good progress, one wonders what’s next. If there’s a way to get some sense of the road ahead, it will be referencing similar trajectories elsewhere. One of our partners put it best by calling China as a time-machine that allows SEA (and other regions) to have a glimpse of development pathways. To that ends, SEA’s scene is now undergoing a transformation similar to China that started with eCommerce and is now transitioning into other mobile-internet services and building out of eCommerce infrastructure like payments and logistics. The difference is that given the lessons from China’s trajectory, the wave of transformation will likely move much quicker. Some nuanced difference remains- for one unlike China, SEA is a myriad of countries each with its own distinct culture and localized difficulties in penetration (compared to scaling up in a more homogenous China). The other challenge is one of income, the average disposable income across most SEA countries today is far lower than what China’s was at back when the tech wave first began. This poses its own challenges and limitations for the system’s growth, for one most SEA markets are still very much cities driven (e.g. a Jakarta market instead of Indonesia market), because when you take into account a certain level of disposable income, most are concentrated in the few leading SEA cities (to the extent that for a lot of startup business, Singapore’s entire revenues might be more than an Indonesia or other countries despite the much larger population size). Over-sizing of market is thus a common fault-line. The other challenge is in market timing, many mature US business models (say rental subscriptions or premium markets) are probably too early for SEA given both the lack of average disposable income and lack of necessary infrastructure like logistics/ delivery. In the Techstyle space, the region still lacks the wider access and ecosystem that Hong Kong has, especially in its connections to brands/ manufacturers. This though is slowly changing with the shift of manufacturers into SEA countries like Vietnam. The next step for us is to continue to study and build upon lessons we can glean from the time-machine we have.
Sustainability from community building: GINB’s Conscious Festival 2018
While that future is certainly exciting to await, another force has already arrived. Being in the midst of GINB’s Conscious Festival 2018 inspired us with the energy of a new movement that GINB is trying to build. Over their 2 days event, thousands gathered to learn about latest sustainability trends and be empowered to take further action in their day-to-day lives. During the event, we participated in a panel about how tech and blockchain can drive sustainability and a general consensus was that the tech itself is not enough and that tech needs to be complemented with a change in consumer mindset. To that ends, GINB is doing good work in bringing the community together and we are excited for Hong Kong’s own edition of the event next April.
(The market of the GINB’s Conscious Festival 2018)
Towards the next chapter- back to HK for us
Though it’s a short trip, this week has shown us the excitement in this region and we look forward to be back. But for now, all eyes is back on Hong Kong as we await our own grand opening in December. Stay tuned- more good stuff to come.