日前举行的“清华五道口金融EMBA&EE 2018新年思想汇”上，清华大学五道口金融EMBA“一带一路”东南亚首期班学生、Mainspring Technology Ltd 公司CEO刘伟瀚以“东南亚有何不同？（How Southeast Asia is Different）”发表主题演讲，介绍了东南亚国家的互联网行业特点，刘伟瀚认为中国初创公司在东南亚开展业务必须学会拥抱东南亚地区的多样性，从中国引入研发人才，并且在参考中国的模式时更要考虑东南亚国家的实际特点。
Good afternoon, it’s a real honor and privilege standing here in front of all of you. I’m from Malaysia originally, but I’ve been living in Beijing for many years. This is really my second home, so thank you for having me speak here today.
Few years ago when I still lived in Beijing, I saw the rapid rise of Internet in China, I was really impressed and I asked myself, can this also happen in Southeast Asia? And if yes, where? Would it be Malaysia, where I’m from?Thailand, Indonesia or the Philippines? I bet it would be Indonesia, for a few reasons.
No.1, it’s a very big country, 2 hundred million people.
No.2, back then, the internet penetration is stillvery low.
And No.3. I happened to speak the language where I grew up.
So, because of that, I started a company with my friend, in Jakarta, a few years ago. Today, we have a 200-people team. We do news and video in all across Southeast Asia, countries like Indonesia, Thailand and so on, Vietnam. We work very close with Jinri Toutiao and we collaborate with them in this region.
Beyond my company and what I do, what is more important is actually the rise of the Internet in Indonesia and Southeast Asia more broadly speaking. That is the one that we are all here today for. If you look at this chart here, all of them just rise within 3 to 4 years. There have been hundreds of and even thousands of new companies emerging in South Asia, just like in China, E-commerce, Fintech, travel, media and so on. Most of the money and companies essentially from Indonesia or Singapore, this makes the vast majority of it.
As a result, venture funding has gone from virtually nothing in a few years, to 8 billion dollars last year actually. This is a mass increase within a few short years. Big giants like Grab and also some interesting new start-ups from the region as well. What some people might not know is that, much of the venture money in Southeast Asia today actually is from China. 90% plus money in Southeast Asia is from China, of course, companies like Ali, Tencent, JD, but also many start-ups now. They go directly to the markets like Bangkok and Jakarta to start their business. So this is a big trend.
It’s not hard to understand. Maybe some of you have been to Southeast Asia, some of you have not, I am from the Belt and Road EMBA class, so half of the class is from Southeast Asia. If we combine the five countries here-Southeast Asia is actually ten countries-If we combine the big five, we have 6 hundred million people, that is roughly half of the size of China, a bit less. If we combine all Internet users in Southeast Asia today, it’s 250 million people, just as the same size as the internet users in United States today.
So it is a big market, it’s also a very young market. If you ask someone, what is the average age in China today, it’s roughly about 37. Southeast Asia is quite a bit younger, like Indonesia, Malaysia and Vietnam, roughly about late 20s or early 30s. Many of these countries are going into the phase now what we called demographic dividend, where there is a lot of people who start to work. They started to generate income. At the same time, they don’t have a lot of dependents, and they don’t have a lot of children or old people to take care of, so this would be a very good period for growth, not only for internet, but GDP in general.
All these you can read from the papers, this is a quick summary. What I really want to share today, just my personal experience, I have been this for 5 to 6 years from now. I have to say it is very different. Why is it different, and what can you do about it? If you are interested in entering the market., one thing that is very different between Southeast Asia and China, is the share of diversity, the different religions, systems, cultures and people. I came here and say I’m from Malaysia. They come and say they are from Thailand, Indonesia. In fact, I’ve never met anyone who say that they are from Southeast Asia, because Southeast Asia is not a country, it’s not a concept, it’s not an economy block like the EU. We don’t share a currency, we don’t share interest rate, or legal framework, there are not many commonalities. If you look at this chart here, I know it’s a lot of colors but this one is what I can tell you. If you take religion for example, you can see that in Malaysia and Indonesia, Islam is the major religion, Philippine is mostly Catholic, and in Thailand, almost everyone is a Buddhist except in the south.
Interms of political systems, it’s democracy in Philippines, Indonesia; British parliament system in Singapore and Malaysia; You’ve got constitutional monarchyin Thailand; you’ve got communism party in Vietnam, so again, very different.
In fact it’s not just our systems, if you take a look at even the Internet, in China you’ve got one Wechat to rule them all, but in Southeast Asia, just take a look at our messaging systems. In Indonesia you’ve got blackberry, WhatsApp, Line. In Philippines you have Facebook Messenger. In Vietnam you have Vibe, in Thailand you have Line again. Only in Malaysia we use Wechat. So if I am a Thai person, I don’t know how to talk to the Philippines. I have to change to different chatting systems.
Coming back to this point, why does this diversity matter? It matters for two reasons. No.1 is what kind of product do you do as starters, who do you build for? You build for Thailand, or Philippines, who prioritizes as your base case market? That is a big issue. No.2, even if a product can go across the whole region, how do you manage the different teams? That’s a difficult issue for most companies, but as to a start-up, it’s a very challenging issue. This is one of the big differences.
Secondly, maybe even more importantly, people, specifically, about people and talent and R&D. Many of you work in Indonesia, we have stories about how hard it is to hire good R&D, in Indonesia. My first story is last year, we asked a very senior developer to come to interview. The day before he sent us a message saying he will be there at 1 pm next day, but at 2 pm he still doesn’t show up. So we called and asked what’s going on, was there an accident, or why he doesn’t come here to interview. He said I’m sorry, actually I went to your office, but I couldn’t find parking, I circled around, so I left. That was not an unusual story. If you invite 10 people to interview in Indonesia, for example, my experience is that 2 or 3 just won’t show up.
I’ll share some stats, like last year, we looked at 10 thousand CVs. We invited about 4000, but only 3000 showed up, I think we made offers to less than 100 people. So when it goes from CVs to actually hire someone, it’s like 1% rate. As a result, I spend a lot of my time interviewing. In fact, we reserved every Saturday just to interview and hire people. You might be wondering why is it, is it us too picky, or is it because there are too many IT works are in Jakarta and people don’t care, I don’t think so. In fact I would like to share some data about, why is it so much harder to find a talent in Southeast Asia?
Come back to China for example, look at this chart. How many of you know the PISA score? It’s a program for international students assessment. The OECD gives theexam to 500 thousand students across the world. Every 3 years, they rank all the students, in reading, science, and mathematics, by country, basically. This is a result from 2015. If you look at the countries at the top, it’s red. It’s people like China, Japan, Hong Kong, Taiwan, and Singapore, mostly East Asia countries and regions. Where do Southeast Asia countries rank? We’ve got Malaysia maybe ranking at 40, Thailand at 50, and Indonesia No. 10 from the bottom. So as a region, we don’t have much capability in science and math, this is a big handicap for trying to build good R&D capability.
I will go over competition quickly, in China we got BAT, in Southeast Asia, we have FYI, which is Facebook, Youtube and Instagram. As you can see, there are 200 million users, because we do news and video, every day I wake up I was thinking, why should someone use our app and not just use Youtube or Instagram. That’s a big challenge. I think it is true from many start-ups in this region. How do we compete with these companies that are already so large. But at the same time, because they are so large, they are also your friend, you can prove your MVP, initial base, really by learning how to work with Facebook in a very smart way. So anyway, we can see that South East Asia is very different. We’ve got diversity, we’ve got the difference in R&D talent, we’ve got Facebook and Google.
I just want to wrap up today, by summarizing these, what can you really do about this, as a company (startup) from China? No.1 you have to learn to embrace the diversity of the region, you have to accept. The region is very different, but if you want to be successful, you have to be able to scale across all countries. If you are just doing Indonesia and Thailand, it’s subscale, it’s too small. As we know, when it comes to Internet business, you have to get to the scale, if you want to do the scale, you have to do across the region. But that is really hard. First it takes the right product, managing in the right way, but it is worth investment. No. 2, this is very unique to China. As I said before, in Southeast Asia we have a shortage of R&D talent. China has a lot of it. This is an atural strength for Chinese companies going to region, you have product, technology which you can bring into the region and make a huge impact. Last but not least, many friends asking, it is hot in China now. Can we copy a good idea from China to Thailand, Indonesia? I said, it depends, most of the time you cannot, it depends on what you have. One thing we have to accept is that, Southeast Asia is not China. They will never be as big, as rich or as fast exponentially. But it’s a market of 400 million people, if you really invest time, money, and patience, to find what users really need, I think you will find it to be areally exciting market, and also a good place to take vacation.
So anyway, thank you very much, thank you for your time, and happy new year.